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Tuesday, June 28, 2022

Decision on 5G model next month

PETALING JAYA: The dynamics of the telecommunications (telecoms) industry will change should the government alter its approach on the development of 5G to allow the private sector telecommunication companies (telcos) to build and own 5G networks after abandoning the single wholesale model.

The government surprised the industry yesterday by casting doubt over the single wholesale model as the answer for the 5G network rollout.

Communications and Multimedia Minister Tan Sri Annuar Musa said the government was reconsidering the single wholesale model for the rollout of the 5G network.

It is doing so after receiving feedback from telcos and industry players and, a decision will be made in January.

He said the telcos have continued to question the government over the proposed 5G rollout model.

Annuar Musa speaking to the media yesterday

This comes nine months after it gave its blessings to have a single 5G wholesale network instead of allowing telecoms players to build their own 5G networks.

The purpose of the single wholesale network was to avoid the duplication of resources and to ensure capital expenditure efficiency.What prompted the government to review the decision was the disgruntled industry over the single model announced in February.

Politicians, industry players and experts have continued to question the motive behind the creation of a single network entity when globally, the norm is to have at least two networks for the 5G rollout.

“(What was announced yesterday) is news to us. We are still trying to digest what the minister had said,’’ an executive said.

StarBiz sought the views of Celcom Axiata Bhd, Digi.com Bhd, Maxis Bhd, Telekom Malaysia Bhd, U Mobile, Digital Nasional Bhd (DNB) and even the industry regulator on the minister’s comment. DNB did not respond to queries.

In February, the government favoured a single wholesale network over giving out the spectrum to all telecoms players.

DNB digital rolloutDNB digital rollout

It was decided then that its wholly-owned company DNB would roll out 5G on a wholesale model.

Any player can offer 5G services by riding on DNB’s 5G network.

Although DNB has ambitious rollout plans, the telco players have yet to sign any commercial or technical agreements for wholesale access because of several issues.

“At this point, discussions are still ongoing, be it technical or commercial.

“No one party has signed a long-term contract for wholesale access from DNB apart from only doing 5G trials,’’ said a source.

DNB has to meet certain conditions before players can sign any agreement for wholesale access.

However, going by what the minister had announced, experts believed there is still time for a review as these are still early days of the 5G deployment.

“What we are facing is a multi-faceted situation as many parties are involved: all wanting the best.

“Whatever the outcome of the government” decision, it will have an impact on the industry, the consumers, its competitiveness in the region and efficiency.

“But there are some considerations to ponder before making a final decision the second time around,’’ a telco executive said.

He asked if the single wholesale model is preferred, would the government commit to upgrades when new generation technologies such as 6G and 7G come into play?

“Any decision to not allow the players to roll out their own 5G networks is a setback for them. It erodes their value and some have foreign investors as shareholders.

“Malaysia is on a continuous drive to get new foreign investments and how it decides on existing investments is being watched very closely,’’ he said.

The executive felt that the delays could be seen as a setback to the country’s competitiveness compared with its peers, which opted to have more than one player instead of a single network model.

“There are a lot of pros and cons to the current model.

“What the government needs to do is find the most efficient way and the middle ground.

“Perhaps, the most efficient and effective way would be to build together. As when they build together, it would be a lot cheaper, more efficient and there will be less value lost,’’ the expert said.


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