A credible approach to the 5G rollout

GIVEN that the cabinet is expected to deliberate and decide this week on the way forward for a credible rollout of 5G in Malaysia, it is time to detail specific paths that can be taken to resolve this issue once and for all.  

It will benefit many to move away from the proven failure of Single Wholesale Network (SWN) to the more successful Multiple Wholesale Network (MWN) globally. 

If DNB becomes fully owned by major Malaysian Mobile Network Operators (MNOs), this will ensure 80% coverage of populated areas (Copa) by end of 2023. MNOs will maximise efficiencies by leveraging on existing assets, expertise, and partner ecosystems to improve public affordability. 

Specific waypoints 

1. MNOs should hold 100% equity in Digital Nasional Berhad (DNB). Shareholders will have equal and fair rights consistent with the Companies Act. 

2. Government should divest shares in DNB to MNOs – relieving government from the burden of operating and funding DNB. Government will also recover all capital invested in DNB. No golden share is required as the government has oversight and can regulate the industry via MCMC. 

3. Spectrum in DNB i.e., 700Mhz and 3500Mhz should be converted to spectrum assignment. MNOs will be committed to invest as there is stability of operations. This will also boost foreign investors’ confidence in the industry, exciting KLSE whilst providing additional monies to government coffers. Government should consider waving upfront spectrum costs as well as postponing annual fees to cushion the burden MNOs will inherit from DNB and therefore provide more financial power to invest in network improvement and cost reduction for the benefit of consumers. 

4. Government should immediately reinstate technology neutrality to help expedite 5G coverage to 80% and to improve network efficiency and customer experience. 

Implementation plan

1. MNOs must commit to continue DNB rollout without delays, providing the assurance of achieving 80% Copa by end of 2023 by leveraging on their existing asset base (e.g. sites, fibre). 

2. MNOs should provide equal and non-discriminatory access to everybody. 

3. Rural 5G coverage should be improved using MNOs’ existing spectrum (via technology neutrality) and assets as well as using the 700Mhz spectrum more efficiently.   

4. National high-speed broadband should be enhanced to fully cover rural areas, leveraging on available innovative satellite broadband systems and making use of coverage spectrums i.e., sub 1 GHZ bands like 700 MHZ. 

5. MNOs who acquire an interest in DNB must accept stringent conditions that will be determined by the MCMC in terms of service quality and coverage, with punitive fines for failure to perform. 

Execution timeline 

1. Due diligence should be conducted for the second quarter of 2023 and implementation plans should be provided to the government.  

2. MNO teams should be mobilised to ensure continuous rollout.  

3. By the end of 2023 or earlier, 80% Copa should be achieved. 

4. Once 50% of data traffic is on 5G, a transition to Multiple Wholesale Network should be ensured for increased network resiliency and improved customer experience, while driving innovation through infrastructure-based competition. 

Benefits to the government

1. Relieves funding commitments and burdens in addition to complete cost recovery. 

2. Additional monies to coffers from spectrum assignments, hence a sustainable cashflow. 

3. Revenue from 100% of taxes and duties instead of 65%. 

4. MNOs to take full responsibility for execution and ensure achievement of Copa by end of 2023 or earlier. 

5. Innovation driven through competition, mitigating further brain drain.  

Benefits to the public 

1. Attaining 80% Copa by end of 2023 leveraging on DNB and MNO capabilities, resources and existing assets, including but not limited to sites, fibre, etc.  

2. Attaining national high-speed broadband to 100% rural coverage using innovative satellite broadband systems consistent with end-user requirements and usage patterns. 

3. Improvement in rural 5G coverage using MNOs existing spectrum through technology neutrality and assets, riding on 700MHz spectrum more efficiently (Fixed Wireless Access). 

4. Complementing 5G rollout with current 4G services to maximise efficiencies, drive down costs, and improve experiences. 

5. Improved affordability of 5G services. 

Let us get clever in drawing wisdom from the best global experiences! – April 17, 2023.  

* Dr Rais Hussin is president and CEO of independent think tank EMIR Research. 

* 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.

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