Appointing U Mobile as the second operator of the 5G network in Malaysia has raised several issues. The “one service provider” model was agreed upon, signed, and sealed in March 2021. And abandoned in May 2023. U Mobile’s award was announced 17 months later Nov 1, 2024.
U Mobile was launched in 2007 as Malaysia’s fourth-largest telco (before CelcomDigi merger). At the moment, its 4G network has over 9,000 sites nationwide and is said to have over 9 million subscribers in 2023.
As a comparison, Malaysia’s largest mobile telco, CelcomDigi, currently has nearly 25,000 sites post-merger. The telco is currently undergoing an integration and modernisation exercise aimed at providing a combined 18,000 5G-ready sites by the end of 2025. CelcomDigi currently has 20.2 million subscribers based on its Q2 2024 report.
Meanwhile, Maxis recently revealed it has over 11,000 sites as mentioned in its response to the second 5G network bid. The green telco currently has the second most mobile users in Malaysia with over 12.7 million subscribers according to their Q2 2024 report.
According to a recent report by Macquarie Research, CelcomDigi and Maxis dominate when it comes to revenue share for the Malaysian mobile market. Among the trio, CelcomDigi holds an estimated 50%, followed by Maxis at 37% and U Mobile at 13%.
Shareholders and shareholding as reported by SSM is shown in the Table below:
CelcomDigi and Maxis were forerunners in the second 5G network race as both telcos have invested heavily to modernise their existing 4G network to be 5G-ready in the past few years. All they needed was the 700MHz and 3500MHz spectrum to provide 5G coverage using its existing infrastructure.
Ever wondered why telecommunication companies fought tooth and nail against establishing a single network provider for 5G services and lobbied strongly against DNB as the sole provider of such services?
The magic word is spectrum, the frequency band for transmission which in Malaysia is given totally free of charge to the telcos. These are worth billions and because they are given free, telcos can make quite a bundle from them.
In the US, telcos paid US$81 billion for 5G spectrum in 2021, yes, a whopping RM356 billion, but here in Malaysia, we are giving it away for free- for free! In Malaysia, a former minister estimated it could be worth between RM6 billion and RM15 billion!
That’s why a single wholesale network was proposed as the model for Malaysia so that 5G costs to the consumer were the lowest possible. DNB got the contract and was to roll out the services for all. And yes, it got the spectrum for free.
There are three options the government has in terms of this 5G contract:
1. Retract the award
2. Revise the new award of 5G to a consortium
3. Keep the status quo
Option 3 has no logic, no rhyme or reason! But remember this is Malaysia!
References:
Comment I 5G: Spectrum value, the Singapore link and other issues, P. Gunasegaram, Malaysiakini, 12 November 2024
Who owns U Mobile and how did it beat CelcomDigi and Maxis for second 5G network? Alexander Wong, https://soyacincau.com, 4 November 2024
No comments:
Post a Comment