KUALA LUMPUR – Local telecommunication companies, which have been waging war against the government’s 5G plan, have banded together to propose the setting up of two networks to be owned by them in place of the current proposal.
A paper by the telcos is expected to be presented to the government next week and discussed by the cabinet soon after, in which the government’s Digital Nasional Bhd (DNB) will be replaced by two consortia made up of the nation’s major telcos.
Following protests by the telcos to the DNB plan, the government has given itself by the end of January to decide whether to stick to the current plan.
Industry sources said the two proposed networks will be made up of shareholders Maxis Bhd and U Mobile Sdn Bhd on one side, and Celcom Axiata Bhd, Digi and Telekom Malaysia Bhd on the other. The current DNB will be phased out and its assets and fledgling network absorbed by the two groups.
The telcos have been objecting to the idea of DNB’s single wholesale network (SWN) system, suggesting it would be a monopoly, and have enlisted the support of heavyweight politicians who suggest that the project’s lack of transparency could result in yet another financial scandal.
Despite the initial stumbling blocks, with some major telcos refusing to sign up, Telekom Malaysia and YTL Communications have nevertheless entered into agreements with DNB to roll out their 5G services.
Putrajaya is planning to roll out the nation’s 5G network through the SWN method, in which the telcos will subscribe to access offered by DNB, the government’s special purpose vehicle for the project.
DNB appointed Ericsson (Malaysia) Sdn Bhd to design and build the nation’s network infrastructure, expected to cost RM11 billion, via a tender process in March. It planned to have 80% national coverage by 2024. It will operate on a cost recovery formula, and funding will largely come from the sales of 5G access to telcos.
Sources said the telcos claim that their counter-proposal will shorten delivery by a year, and with available infrastructure, cost could also be reduced.
However, because they are profit-oriented, the telcos’ proposal may see them more focused on lucrative centres, perhaps carving the country into regions to be divided between the two networks.
Should Putrajaya assent to this counter-proposal, Sabah and Sarawak as well as other rural areas in Malaysia may yet again bear the brunt of the technology divide and lose out in terms of 5G connectivity.
Their less attractive commercial potential will likely see less investments from the two consortia, unlike DNB, which is mandated to deliver the same level and quality nationwide.
Under the counter-offer to Putrajaya, rural areas deemed unprofitable for the 5G roll-out will see the telcos tapping into the multi-billion Universal Service Provision (USP) fund to finance the project, a source said.
USP is managed by the Malaysian Communications and Multimedia Commission and aims to provide access to basic telephony and internet services throughout the country, with a focus on rural areas and areas deemed not commercially viable for the telcos.
DNB has also provided a guarantee that 5G access will be sold at less than 20 sen per GB to telcos. Consumers are currently charged up to RM2 per GB by the telcos for 4G access. – The Vibes, December 31, 2021
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