THE government has promised cheaper internet rates after the 5G network is rolled out by Digital Nasional Bhd (DNB), said Finance Minister Tengku Zafrul Tengku Abdul Aziz.

“The future costs will be much cheaper as DNB will charge telecommunication companies (telcos) less than 20 sen per gigabyte of data,” he told Parliament during Minister’s Question Time session today.

According to Tengku Zafrul, telcos will only have to pay RM3.5-RM4 billion over 10 years instead of RM1 billion per annum for the 4G network.

“This is 50% savings for telcos and allows them to offer internet at a lower price. 

“The DNG model will force companies to compete on pricing and services, because they don’t have to fork out huge sums to set up the network,” he added.

He said that telcos currently pay 40-55 sen per gigabyte of data.

DNB will set the pricing for telcos, while the Malaysian Communications and Multimedia Commission (MCMC) gives the final approval, Tengku Zafrul said.

“The MCMC, as the governing body, will ensure a fair price for all as it is not profit orientated.

“I’m told that the process of setting the 5G prices is being finalised and will be much cheaper than the 4G network,” he added.

Tengku Zafrul was responding to Lukanisman Awang Sauni (Sibuti-GPS), who asked the government to respond to allegations that telcos did not want to register with DNB to use 5G because the price offered by DNB, which is seen as operating as a monopoly was too high.

The minister said that the government is aware of the challenges experienced by other countries using the “single wholesale network” approach and has taken steps to ensure that there are no mistakes in Malaysia. 

He said that telcos were concerned about this model because they want to maintain their market share, particularly the profit margins.

“However, the DNB model will encourage telcos to compete using DNB’s infrastructure. More important, Malaysians will enjoy internet speed of up to 100 times faster at a reasonable price. Telcos can also maintain their profits,” said Tengku Zafrul.

He likened the DNB model to having “a single mega highway for all instead of several smaller roads”.

Critics have called for a review of the decision to appoint DNB to operate the 5G network following a report that telcos did not want to sign up due to transparency and pricing issues.

Meanwhile, DNB has already signed a contract with Ericsson Malaysia for RM11 billion to build the 5G infrastructure. DNB is wholly owned by MOF Inc. 

Other criticisms of the DNB model is the lack of transparency on how it will pay Ericsson for the project as it is not taking on any debts. – November 25, 2021.