AFTER Digital Nasional Bhd (DNB) CEO Ralph Marshall’s explanation on the implementation of Malaysia’s 5G roll-out, DAP lawmaker Dr Ong Kian Ming now wants the heads of telecommunication companies to answer more questions arising from Marshall’s answers. 

In an open statement to Maxis, Celcom, Digi, U Mobile and Yes, the Bangi MP said the argument from DNB and the Ministry of Finance (MOF) for a single entity to roll out 5G given the high infrastructure costs involved was convincing.

But he asked the mobile network operators (MNO) if the contention that the MNOs had failed to work together to come up with a workable ownership structure for a consortium-led single wholesale network (SWN) for the 5G roll-out was accurate.

“Is this an accurate depiction of the chronology behind the discussion to establish a consortium-led SWN entity and the subsequent establishment of DNB which would take up 100% ownership and responsibility of the 5G roll-out?” Ong asked in a statement today.

He also said the MNOs should issue their own response to DNB and MOF’s argument that a “one multi-lane highway built for the purposes of 5G roll-out where different lanes can be shared by the MNOs at a lower cost compared to each MNO building and owning their own highways”.

On Saturday, Marshall wrote a long response to Ong’s questions on the 5G roll-out, which in short, said the consortium-led SWN model would ensure that the roll-out was faster and cheaper, as Malaysia was already behind its 5G roll-out compared to other countries.

Following Marshall’s letter, Ong also asked today for the MNOs to respond to the statement that the companies would want to delay the 5G roll-out in order to “sweat” value from their current and future 4G assets.

Below are additional questions raised by Ong to the telco companies:

• As a public policymaker who is interested in narrowing the urban-rural divide and as a former deputy trade and industry minister, I can see the attractiveness of a SWN model led by a government entity that would push for speedier deployment of 5G into the semi-urban and rural areas despite the initial lack of demand. The rapid deployment of 5G, coupled with the existing plans to roll out 4G in a complimentary manner by the MNOs will provide the impetus for jobs and investments to flow to lower-cost semi-urban and rural areas in different parts of the country, which would lead to an increased demand for 5G coverage and services. Would the industry players agree with this point of view?

• The CEO of DNB has stated that the “reference access offer” (RAO) that will be given to the MNOs for access to the 5G SWN network will be “very transparent” covering pricing, terms and conditions, and the catalogue of other services being provided. What kind of transparency and flexibility are the MNOs asking for in terms of the pricing and access structure of this RAO? For example, would the industry want to have some element of review for the pricing structure every X number of years? Would some industry players want to have the option of delaying or limiting their take-up of the 5G spectrum and bandwidth until 5G demand is sufficiently profitable?

• One of the key arguments put forth by DNB is that the MNOs should focus on competing based on service offerings rather than the speed and connectivity of their network under 5G as data and data access are increasingly being commoditised. From my own understanding, there has been little innovation, especially in terms of value-added services for the SMEs and the manufacturing sector. If the MNOs are freed up from having to focus on the 5G roll-out and are “forced” to compete based on service offerings, wouldn’t this lead to a more innovative mobile telco landscape, for businesses as well as individual consumers?

• Last year, DNB claimed that it would have 500 5G-enabled sites by the end of 2021 for “delivery” to the MNOs as proof that it can deliver on its promise of a speedy 5G roll-out plan. At the same time, DNB’s CEO points to the regularly reporting and updating on the progress of its 5G rollout plan on its website.5 Is the industry satisfied with the progress which DNB has made with regards to the rollout of 5G infrastructure? Are there any areas of possible concern which policy makers should know about vis-à-vis the current deployment of the 5G network thus far under DNB?

• Does the industry see any upsides to having DNB roll out the 5G network initially and giving an option for MNOs to buy stakes in DNB after a significant portion of the 5G network has been rolled out, let’s say by 2024? Would this lessen the concerns on the part of the MNOs that DNB would “abuse” its position as a monopoly and put unreasonable charges on the industry players for access to the 5G network?

• Would DNB be more “acceptable” to the MNOs if it had more autonomy and a more “arm’s length” relationship with the government of Malaysia to avoid possible conflicts of interest within the government, as recommended in the 5G evaluation report by DT Economics?

• Would the MNOs prefer a dual wholesale model (DWN) compared to the current SWN model with another entity building and rolling out another 5G network? If so, what would be the proposed ownership structure and responsibilities of this DWN model? For example, would a consortium-led entity be allowed to complement/compete against DNB for the 5G roll-out or would the ownership structure of DNB be changed so that there are TWO non-government entities given the responsibility of rolling out 5G in Malaysia? – February 14, 2022.