COMMUNICATIONS and Digital Minister Fahmi Fadzil is keen on scrutinising the development of 5G.

This includes the business model, contract, coverage, cost and speed of the single wholesale network (SWN).

In the revised Budget 2023, the prime minister wanted the country to fully participate in 5G development.

So far, Maxis is the only telco that hasn’t signed the 5G access agreement. Fahmi is supposed to submit the implementation policy to the cabinet by the first quarter of 2023, but has not announced the details.

Digital Nasional Bhd (DNB), a special-purpose vehicle company, was established in 2021 to drive the development of 5G infrastructure in Malaysia.

DNB’s original plan was to offer a 70% stake to the six mobile network operators (MNOs), who were initially allowed to take an 11.67% stake each under the Share Subscription Agreement.

The government owns 35% of the company, with the remaining 65% split among Celcom Axiata Bhd (12.5%), Digi Telecommunications Sdn Bhd (12.5%), YTL Communications Sdn Bhd (20%) and Telekom Malaysia Bhd (20%). Maxis and UMobile have not joined the SWN.

The other issue is 5G access agreements. Five of the six MNOs in Malaysia, with a combined subscriber base of well over 20 million – Celcom Axiata, Digi Telecommunications, Telekom Malaysia, U Mobile and YTL Communications – have launched 5G services to their customers.

The only telco that hasn’t launched 5G is Maxis, which is likely to wait for the government to announce the rollout before discussing the access agreement.

In terms of coverage, the government will accelerate 5G coverage to 80% by the end of 2023.

SWN cost advantage

With shared infrastructure instead of different telcos building their own for their 5G spectrum, costs will definitely be lower.

The cost of 5G through DNB will be between RM0.13 and RM0.15 per gigabyte (GB), while it would likely be RM0.25 per GB if telcos build their 5G network individually (assuming two to three 5G networks are deployed).

For comparison, the cost of 4G in Malaysia reached RM0.45-0.55 per GB in 2021.

Capped 5G charges by telcos is RM1 per GB compared with RM2 per GB for 4G in Malaysia.

The 5G network is significantly faster than the average 4G (394Mbps vs 35Mbps download speed)

Dual model less likely

Fahmi in March said the government will honour the contract, suggesting it is unlikely to dismantle the current SWN model.

However, the dual-network model would occur if the network is split in two (DNB and non-DNB 5G network).

The charges will intuitively be higher, but private telcos will still be able to optimise their costs based on traffic demands and managing commercial segments.

In any case, Maxis is unlikely to build its own 5G network due to cost factors.

The importance of PPPs

The SWN model for building shared infrastructure has demonstrated the importance of public-private partnerships. In this case, national interest and business opportunity coexist.

Technology is constantly evolving, and there is no choice but to remain still or increase competitiveness.

The government can leverage this by attracting technology-related investments, as business adoption of 5G drives demand for them. Cost optimisation will benefit telcos and households alike.

The economics of upgrading existing infrastructure become an issue. In this case, the government needs to step in to align all telcos and achieve maximum cost efficiency in the interest of national development. – April 17, 2023.

* Nick Tan Beng Teong graduated with Bachelor of Economics at University of Malaya. A member of Agora Society, Tan believes in policy reforms in order to build a better nation.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.