Do 5G Signals Transmit Confusion?

It began in 2021 when the-then government decided on a Single Wholesale Network (SWN) model for 5G. This led to the creation of DNB as the sole provider responsible for rolling out the 5G network across the country.

It was premised on the idea that with a SWN, telcos in Malaysia needn’t duplicate their 5G infrastructure investments and instead compete on their services, all with the idea that it would jumpstart Malaysia’s foray into 5G and lead the country into becoming more competitive.

It was a weak idea, as telcos do rely on their own networks to form their competitive advantages. Furthermore, the billions that the major telcos had spent on their 3G and 4G networks meant that they needed to top up those networks with 5G equipment in order to garner their total return on investment.

 

Source: https://www.wikidata.org

As it stands now, Maxis Bhd, CelcomDigi Bhd, YTL Communications Sdn Bhd and U Mobile each hold a 16.3% stake in DNB. Following the MCMC’s announcement, it wasn’t clear if U Mobile was being awarded the 5G spectrum directly or that it needs to find consortium partners.

MCMC has since clarified that U Mobile itself will be assigned the 5G spectrum for the deployment and that it will be charged the relevant fees in accordance with current laws. MCMC also said that the second 5G network will be fully funded by the private sector.

The big telcos CelcomDigi and Maxis, who themselves are rivals, have a common plight now.

U Mobile did not mention Maxis as a possible collaboration partner. That could stem from a recent failed deal. In July, it was speculated that Maxis was in talks to buy U Mobile. Bloomberg reported that U Mobile’s owners were seeking a valuation of more than RM10bil. That hefty price tag may have killed the deal. It isn’t clear yet if CelcomDigi has initiated any serious discussion with U Mobile.

Telco officials in the country are still trying to seek clarity on this: how did U Mobile fare better than them in the selection criteria for the second 5G network award?

The idea of a second 5G network, as explained by the MCMC is because it “encourages competition, strengthens industry resilience and enables Malaysians to enjoy high-speed connectivity at affordable prices”. Isn’t this BS?

For U Mobile, it will need to build a network at a competitive price. It would also have to do so quickly, considering that DNB’s network already has significant coverage. What if U Mobile builds it and no one comes? This is why U Mobile is interested in some form of partnership with CelcomDigi or Maxis!

Going forward, a lot of how the 5G infrastructure rolls out will depend on how the MCMC plays its role. If the government’s rationale for having the second 5G network is to ensure that there will be competition, then it needs to ensure that there will not be any collusion between U Mobile and DNB in the future. Being a duopoly, there will always be that fear and if such unfair practices happen, it will be yet another backstep for Malaysia’s telecommunications sector.

Reference:

5G saga transmits mixed signals, Risen Jayaseelan, The Star, 9 November 2024