THE  single wholesale network model is a monopoly.  We do not need more studies to know that monopolies are generally not well-run but are instead deeply inefficient. 

Monopolies not only drive up prices, they also reduce productivity and often destroy most of the industry’s profits. 

Monopolists typically increase prices by using political machinery to limit the output of competing products, usually by blocking low-cost substitutes. By limiting supply of competing products, the monopolist drives up demand for its own. Thus, the monopolist actually produces more of its own product than it would in a competitive market but because production of the substitutes is restricted, total output falls.

The blocking of low-cost substitutes particularly harms the poor or people with fewer financial resources who might not be able to afford the monopolist’s product. Thus, monopolies drive the poor out of many markets.

Even though Digital Nasional Bhd doesn’t produce the service, which will be provided by the mobile network operators (MNO), as the only company providing infrastructure, it – and the MNOs – can increase their prices above competitive levels, leading to reduced output.

In this case, the monopoly comprises DNB and many subgroups comprising the MNOs. It is the interplay among these groups that leads to low productivity and the elimination of substitutes. Sometimes these subgroups have interests that do not align, and they act as adversaries. Sometimes their interests align well, and they act as allies.

These subgroups are well aware of DNB’s political power and thereby discouraged from developing substitutes. 

As allies, the MNOs will lobby DNB to use its political clout to lobby for protection from foreign competition. This will hurt the Malaysian consumer.

Competition is the key if the government wishes to make 5G available in every part of the country. 
It is undeniable that competition can yield lower costs and prices, better quality, more choices and variety, more innovation and greater efficiency and productivity.

Would the Malaysian Anti-Competition Commission care to weigh in on the argument that DNB would destroy competition in a market already adequately served? – April 22, 2022.

* FLK reads The Malaysian Insight.

* 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.