KUALA LUMPUR – Opposition politician Ong Kian Ming has rubbished claims that mobile network operators (MNOs) will lose incentives to compete at the retail level should the government adopt a single wholesale network (SWN) for the country’s 5G network roll-out.
Seeing the warning by the telcos as “veiled threats”, the Bangi MP suggested that MNOs can still compete in “many other ways”, such as providing value-added services and applications to customers.
Ong, who is a former deputy international trade and industry minister and DAP assistant political education director, said this in light of answers issued to him by Groupe Speciale Mobile Association (GSMA) Asia Pacific, the umbrella group representing mobile operators and industry stakeholders.
“With the exception of Axiata via Boost, I have not seen many value-added services, which the MNOs have used to compete against one another,” he told The Vibes.
“There is ample room for value-added competition, which has yet to happen.”
The government is expected to make a final decision on whether all telcos will use the SWN system, on March 11.
Ong had sent 10 questions to the major MNOs – Axiata-owned Celcom, Digi, Maxis, and U Mobile – on February 14. In response, the GSMA issued a six-page statement, among others, arguing that SWNs have poor track records of successful implementation.
On February 21, Ong told radio station BFM89.9 that the MNOs had placed profits above the welfare of the customers and are unlikely to roll out the technology rapidly, as their implementation is based on demand from certain areas in the country.
He said he is “very disappointed” with answers provided by the MNOs and GSMA.
Although the SWN offered by the Finance Ministry-owned Digital Nasional Bhd (DNB) had more risks, Ong said the roll-out would be faster, especially to the rural and underserved areas.
So far, only service providers YES and Unifi Mobile have taken up DNB’s offer for 5G services as part of a pilot project in Kuala Lumpur, Cyberjaya, and Putrajaya, which began in mid-December.
He also said he is satisfied with the 21-page response given by DNB, following questions he sent earlier, and that the answers provided by DNB chief executive Augustus Ralph Marshall were “unprecedented” for a government-owned company.
Ong’s remarks echo a United Nations adviser’s belief that Malaysia will be better off with a 5G broadband spectrum provided by a SWN, as other models for its roll-out would be “confusing” for stakeholders and consumers in the country.
He added that the telcos were not willing to engage the public on the issues that are raised.
.@DNB_Official issued a 21-page response to my 15 questions on the 5G rollout. The telcos are asking to establish a Dual Wholesale Network (DWN) model and they have issued a 20-line statement to my 10 questions to them.
— Ong Kian Ming ?? (@imokman) February 18, 2022
Who is being more transparent here?#5Grollout pic.twitter.com/4vqkntiwfg
‘Veiled threats’
Despite their opposition to the SWN proposed by the government, citing concerns over competition, innovation, and monopolisation, the telcos have formed a consortium that wants to operate a secondary 5G network.
On February 18, Celcom, Digi, Maxis and U Mobile issued a joint statement saying they were ready to invest and see the dual wholesale network (DWN) model as a “feasible option” that leverages the capabilities of MNOs and their existing resources.
However, the telcos did not elaborate on the DWN proposal.
Meanwhile, GSMA’s response warns the MNOs of ending up with “stranded assets”, which would no longer allow them to earn economic returns, leading to “significant inefficiencies” at the detriment of consumers.
It added that it is unclear how the government and regulator will ensure that DNB has incurred an “efficient” level of costs to deploy 5G.
“In the long term, end users may lose out due to reduced innovation.”
Brett Haan, an adviser to the United Nations and Brazil’s Economics Ministry on 5G strategy and policy, said although mobile network operators have raised several concerns, including the domino effect of failures due to a single source, the private telecommunications companies can also view the model as a basic utility for the people.
Aside from the MNOs and GSMA, other opponents of the SWN system have launched a petition on Change.org claiming that 50,000 jobs could be lost in the telecommunications sector should the government decide to go with DNB for the 5G rollout.
However, public opinion on the matter seems divided as another petition on the same website has called for the government to turn down the telcos’ proposal to introduce the DWN model.
Analysts had earlier suggested that it is not possible for the DWN mooted by MNOs to match DNB’s 20 sen or less per gigabyte guarantee.
This is because DNB, as a government-run company, operates on a non-profit basis, allowing it to sell data almost at cost price.
Ong told The Vibes that MNOs may say they are competing at the retail level, but 4G coverage among all of them, even in urban areas such as the Klang Valley, is still not “comprehensive” nor of high quality.
“If they want to compete, they should start by showing the effects of competition on the provision of 4G coverage.”
He said the idea behind 5G is that enterprise solutions and usage will drive demand.
“This is where MNOs should start to pivot and focus on rather than to roll-out their own 5G network that may compete with one another.
“Smart manufacturing, smart cities, telemedicine, smart campuses – these are all areas where new sources of revenue and also new services and applications can and should be rolled out by the MNOs.”
Meanwhile, the Federation of Malaysian Consumers’ Associations chief executive Saravanan Thambirajah said the concerns raised by MNOs over the competition in the sector are valid and need to be addressed.
He said this is because consumers may have to ensure longer waiting periods for breakdowns to be addressed as their service provider would need to take infrastructure-related issues to DNB if the 5G services are provided by the government-owned company.
However, he added that smaller mobile virtual network operators, such as TuneTalk and redONE – which ride on the infrastructure of larger telco providers – may not be able to keep up with the bigger companies.
“If the telcos own their own 5G infrastructure, they can set different profit margins whereby in urban areas they can offer premium rates, and charge differently in rural areas.
“But the smaller players will lose out a lot. So, there won’t be competitiveness down there.”
Saravanan in early February indicated Malaysia’s lower-income groups would be further left behind in the digital divide if access requirements to 5G broadband are financially higher than the current 4G spectrum.
He said this is why MNOs must offer the cheapest rates and packages possible, as the majority of Malaysians are wage-earners who are struggling with the rising cost of living.
Malaysian Muslim Consumers’ Association chief activist Datuk Nadzim Johan echoed Saravanan’s view, saying the government must put the needs of consumers before the telcos, as the latter raked in billions in profits annually, while the consumers tend to be “oppressed” and are at the mercy of the services provided, whether good or bad.
“The government must ensure that the reasons behind (telcos) wanting to build their own (5G) lines are not based on greed.” – The Vibes, March 3, 2022
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