Opinion

Reluctance of MNOs gives opportunity for new player – Zainul Arifin

Smaller firm signing up with DNB could prompt mobile network operators to stop stalling

Updated 1 year ago · Published on 24 Apr 2022 8:00AM

Reluctance of MNOs gives opportunity for new player – Zainul Arifin
In general, the MNOs are less keen to venture into 5G at the moment after spending billions over the years on 4G; in investors’ parlance, they want to “sweat” as much as possible their investments before embarking on new ones. – AFP pic, April 24, 2022

by Zainul Arifin

GIVEN the prolonged saga of the nation’s 5G story – we are a regional laggard who should have been using the services for a couple of years, already – perhaps some companies, other than the major mobile operators, should sign up quickly with Digital Nasional Bhd given the extremely tiring foot-dragging by the former.

There is clearly a general reluctance from the four major mobile network operators (MNOs) over the government’s plan for the implementation of the next leap in mobile communication. They are clearly not keen to let DNB build the 5G network, and for them to subscribe to its service.

So perhaps a new player, even the small bit ones currently offering mobile services by buying access from the MNOs, could sign up with DNB and quickly offer 5G services. With aggressive marketing, they could get a head start and steal a march on the MNOs, and steal a chunk of their business, too.

Perhaps the threat to their dominance and someone potentially eating their breakfast could prompt them to get on with the programme, double quick time.

In general, the MNOs are less keen to venture into 5G at the moment after spending billions over the years on 4G; in investors’ parlance, they want to “sweat” as much as possible their investments before embarking on new ones.

Thus, if the MNOs were to be left to their own devices, the 5G would still be a twinkle in our eyes, and they would continue to promote their services to being “5G Ready”, while you and I know its 4G with lipstick, with deteriorating quality, to boot.

For instance, our data consumption grew by 35% year-on-year between 2019 and 2021 due to the pandemic. With 60% of our internet usage being via handheld devices, some major telcos saw a 40% decline in download speed, for instance.

While the MNOs participated in DNB’s 5G tests, only YTL Communications and TM Bhd signed up to subscribe to its service.

4G is fine and good, but we are talking about the next generation of mobile telephony in 5G, which would transform what we do with the technology, from quick downloads all the way perhaps to transforming entertainment, education and commerce. – Pixabay pic, April 24, 2022
4G is fine and good, but we are talking about the next generation of mobile telephony in 5G, which would transform what we do with the technology, from quick downloads all the way perhaps to transforming entertainment, education and commerce. – Pixabay pic, April 24, 2022

The MNOs’ determined rearguard action against the DNB plan included getting prominent politicians to talk of job losses and of an impending scandal a la 1MDB, a suggestion that was both lazy and mischievous, I would think.

As a compromise, the government offered the MNOs up to 70% of DNB, but the roll-out plan must remain.

It should be a win-win thing, right? Yet, the MNOs gave a tepid thumbs up, with a lot of we-want-more-details types of statements from them.

They added that the norms of mergers and acquisitions should follow any investment in DNB. Presumably, this should include board and executive representations, which could influence how the project would be implemented.

The protestations continued with the release of a Reference Access Offer (RAO), a document that in a nutshell specifies the prices, terms and conditions for the subscription to DNB’s 5G services. The four telcos expressed dissatisfaction with the offer, which they said could affect their services to the consumers.

I am not technically qualified to evaluate the RAO, but I sort of understand posturing. Having a very public denouncement of a document prepared by the industry regulator, which is the Malaysian Communication and Multimedia Commission (MCMC), does not give a good impression of the telcos.

A private consultation without the need to publicise to the world their disagreement, especially when they had been very public against the very idea of DNB, suggested a continued resistance to the cause.

At the same time, some MNOs have recently been talking up the 4G services. They talk, for instance, of improving coverage to underserved areas – now whose fault is that to begin with following, when all these years their emphasis were on commercially viable areas and leaving folks in rural areas having to climb trees to get a bar of signal?

The 70% investment offer in DNB is a major concession by the government to acknowledge the contributions of the telcos over the years. – The Vibes file pic, April 24, 2022
The 70% investment offer in DNB is a major concession by the government to acknowledge the contributions of the telcos over the years. – The Vibes file pic, April 24, 2022

To be fair, 4G is fine and good, but we are talking about the next generation of mobile telephony in 5G, which would transform what we do with the technology, from quick downloads all the way perhaps to transforming entertainment, education and commerce.

The MCMC reported recently that the current 4G speed has improved to 40.13 Megabits per second (Mbps). This is great news, but YTL Communications reports that the average speed for its 5G speed stands at 600 Mbps!

Most importantly, perhaps, it would make the mundane phone calls better. Hands up, how many of us are having bad to worse experiences trying to make calls these days.

The 70% investment offer in DNB is also a major concession by the government to acknowledge the contributions of the telcos over the years.

Yet, why do I think it is a checkmate for them? With the government sticking to the single network and its roll-out plan, the telcos’ options are perhaps to invest in DNB and sign up for its services, or be left with decade-old technology that will be both inferior and wanting. And new players can emerge to rival them, too. The MNOs’ continued foot-dragging could end up being their doing.

On a side note, I am rather surprised that some of those heading government-linked telcos could openly oppose the DNB plan, which is promoted by their bosses in the Finance as well as the Communication and Multimedia ministries. In local parlance, this is akin to “lawan taukeh”.

The government bent backwards and offered telcos up to 70% in DNB, which from the outside looks rather good considering it is someone who tried to derail the government’s plan. Do they want the government to be on its knees, too? – The Vibes, April 24, 2022

Zainul Arifin Mohammed Isa is a veteran newsman with more than 35 years in the business. He is CEO at PETRA News

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