Commercial interests, geopolitics collide over future of Malaysia's 5G

Wrangling over control of a second network is threatening to derail state-led first network

- Shannon Teoh

Political and commercial wrangling over control of a second 5G network is threatening to derail the government-led first network that is already nearing 80 per cent coverage of populated areas in Malaysia.

Not only are major telcos jostling over who gets a potentially lucrative deal to spearhead a second wholesale network for the next-generation mobile service, but Prime Minister Anwar Ibrahim has also openly backed Chinese giant Huawei to be the equipment provider for it.

Official and industry sources told The Straits Times that plans by the top mobile network operators (MNOs) to eventually abandon the state-led Digital Nasional Berhad (DNB) in favour of building the second network would impact the financial viability of the first 5G network.

This would further delay plans to have near-blanket – or more than 90 per cent – national access to faster mobile data, as well as the implementation of cutting-edge enterprise solutions.

The battle to control what stakeholders call Entity B comes after the Anwar administration decided in May to depart from a single wholesale network (SWN) model and allow a second provider to enter the fray after DNB reaches 80 per cent coverage of populated areas, which is on track for end-2023.

Ostensibly, a second provider is supposed to complement DNB and provide competition.

But all signs are pointing to MNOs wanting Entity B to pivot to densely populated areas, thus reducing their average costs while controlling crucial spectrum bands over which mobile data services are transmitted.

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The focus on Entity B has stalled negotiations on an agreed equity participation in DNB by the five top players – CelcomDigi, Maxis, uMobile, Yes and Telekom Malaysia – denying the government vehicle an injection of new funds.