KUALA LUMPUR – At least 40 million mobile broadband subscriptions are facing further delays in receiving 5G connectivity as major telecommunications companies grapple over a commercial agreement with Finance Ministry-owned special-purpose vehicle Digital Nasional Bhd (DNB).
The Reference Access Offer (RAO) agreement, which details the pricing, terms and conditions, and a catalogue of services offered by DNB for the 5G network, has recently been a bone of contention among the mobile network operators (MNOs), particularly the four telco giants Celcom, Digi, Maxis and U Mobile, informally known as the CDMU.
The reluctance of the telcos to sign the RAO is also hampering DNB’s target of achieving 80% population coverage by the end of 2024, and 90% coverage by 2027.
An industry insider had also predicted that at least 15% of the Malaysian population would have been enjoying 5G speeds by the end of April if the major MNOs had jumped on DNB’s Klang Valley pilot project last December.
The industry insider, who declined to be named, noted the figure on the number of subscriptions affected was based on estimates in the Malaysian Communications and Multimedia Commission’s (MCMC) industry performance report 2020, which was released mid-last year.
Collectively, the CDMU commands about 85% of the relative market share (RMS) of a total of 43.72 million mobile cellular and broadband subscriptions, according to figures from the fourth quarter of 2020.
A total of 30.15 million of the subscriptions are prepaid accounts, while the remaining 13.57 million accounts use postpaid services.
Maxis has the highest RMS among the four major telco players at 28.2% (12.33 million accounts), followed by Digi’s 22.8% (9.97 million) and Celcom’s 18.3% (8 million).
U Mobile has the smallest RMS among the big four with 16.4% (7.17 million), while other smaller industry players collectively have only 15% (6.25 million) of overall subscriptions.
Meanwhile, users of Telekom Malaysia and YES in selected areas in Putrajaya, Cyberjaya and Kuala Lumpur are currently able to enjoy 5G connectivity due to DNB’s no-cost commercial trials which started last December.
In March, Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz announced the government’s decision to implement a single wholesale network (SWN) for the national 5G roll-out, with the telcos being given the opportunity to own up to a 70% stake in DNB.
The minister also said DNB had been instructed to keep the wholesale price of the 5G network at below 20 sen per gigabyte (GB). On average, the major telcos, which opposed the SWN, currently offer 4G connection at RM2 per GB to consumers.
In early April, the CDMU issued a joint statement saying the RAO agreement did not address certain concerns and issues raised, including their ability to offer affordable and quality 5G services.
“The series of joint statements in the past suggest the four largest MNOs are moving together on the 5G roll-out even though they had initially opposed an SWN due to monopoly concerns,” said the insider.
Ironically, it seems as though the competitors are acting as a single entity, hence a sort-of cartel, so to speak.”
In late April, MCMC chief operating officer Datuk Mohd Ali Hanafiah Mohd Yunus said recent concerns raised by the telcos regarding the RAO would be sorted out within several weeks.
Meanwhile, Bangi MP Ong Kian Ming said the inability of the CDMU to agree on the proposed RAO should not be used as an excuse to delay the continued roll-out of 5G networking and infrastructure, which is currently being carried out by DNB.
He said, however, that initial disagreements with the telcos over the RAO were “not surprising” given the unprecedented SWN system that has not likely been implemented anywhere else in the world.
“This is the first time that something like this is being proposed in Malaysia, and in the world perhaps, whereby a SWN that is 100% owned by the government is serving a small group of private sector players in the telco sector that has been used to getting its way in the market for the past few decades,” he told The Vibes.
“This is where a capable regulatory, in this case MCMC, has to step in to mediate the differences between DNB and the private telco players to establish a baseline for negotiation and decision making that will be accepted by all sides.”
He said due to the highly technical nature of the RAO, it is important not to allow the final decision to be subject to political lobbying by any side.
Instead, Ong said the matter should be settled on concrete grounds based on facts and figures.
“MCMC should call in independent experts, including from other countries, to verify the RAO proposal put forth by DNB if it needs a few other sources of verification,” he said. – The Vibes, May 3, 2022
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