KUALA LUMPUR – Some of the country’s biggest telecommunications companies have made a new bid to create another network for a 5G roll-out, in essence, a move to bring back the dual wholesale network (DWN) previously rejected by the government.
Major mobile operators are keen to test the resolve of the newly minted government on the 5G roll-out plan initiated by previous administrations via state-owned Digital Nasional Bhd (DNB), industry sources say.
They said the telcos might have made the formal approach for their own 5G network, perhaps sensing that the new government might look kindly on their request.
The sources said at least four major telcos – Celcom, Digi, Maxis, and U Mobile, collectively known in the industry as the “CDMU” – have backed the bid for a second network.
Of the four, Celcom and Digi had signed both access agreements as well as subscriptions for shares in DNB last October. U Mobile signed only for access, while Maxis has not signed on for either.
YTL Communications Sdn Bhd (YES) and Telekom Malaysia Bhd (TM) had also executed share subscription agreements (SSAs) to take up equity stakes in DNB last October. However, it is understood that there is an exit clause.
The CDMU are the same telcos which previously joined forces as an informal consortium to resist the single wholesale network, calling for the government to allow for a DWN instead.
It is believed that the desire for a second network has to do with having access to their own 5G spectrum. The current deal with DNB would see the telcos as virtual network operators buying access to the 5G network and not owning any spectrum.
“The MNOs (mobile network operators) that made the request for the DWN model are seeking greater autonomy over the 5G spectrum, meaning that they wish to install and manage their own infrastructure around the country instead of depending on the government,” one source told The Vibes recently.
“But this model, if implemented, could be at the expense of rural and less populated areas that may not receive 5G connectivity as the major telcos may not see them as profitable areas.
“The telcos feel that if they do not control the 5G spectrum, they would exist as mobile virtual network operators.”
This revelation comes days after Communications and Digital Minister Fahmi Fadzil said on February 21 that the cabinet would discuss the country’s 5G roll-out plan by the end of March. This would include the role of DNB.
Fahmi did not mention whether the discussions so far have involved the DWN model, but said the views and concerns of all relevant stakeholders will be considered, apart from contractual obligations.
Previously, when in the opposition, Prime Minister Datuk Seri Anwar Ibrahim and Fahmi had expressed reservations about the DNB project.
In January, after assuming office, Fahmi said DNB’s introduction and implementation of 5G will be announced by the end of March, with added features.
Previously, the telcos had initially wanted a dual network environment by setting up their own 5G infrastructure to complement DNB’s. The government insisted on a single network that all telcos should subscribe to.
In return, the telcos were offered the opportunity to buy stakes in DNB, culminating in four MNOs executing SSAs to take up equity stakes in DNB last October.
The telcos – Celcom Axiata Bhd, Digi Telecommunications Sdn Bhd, YES, and TM – took up 65% of equity in DNB.
Celcom and Digi each took up 12.5%, and YES and TM took 20% each. The government retained the golden share of 35%, which grants it various rights and privileges and covers areas such as ownership, sale, or transfer of shares.
DNB previously noted that under the terms of the SSA and the agreed governance structure between the parties, no single MNO can hold more than a 20% shareholding in DNB.
In the event of a merger between the MNOs, the merged entity cannot hold more than a 25% shareholding in DNB.
In May last year, then finance minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz 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 currently offer 4G connection at RM2 per GB to consumers. – The Vibes, February 24, 2023
