Malaysia's move to award prized 5G spectrum to U Mobile sparks debate

U Mobile's win ahead of larger rivals sets tongues wagging over its ownership

- Shannon Teoh

KUALA LUMPUR - Malaysia's shock pick of the smallest of its three main mobile operators to award its prized 5G spectrum has sparked debate, with Communications Minister Fahmi Fadzil forced to defend the decision in Parliament on Nov 7.

On Nov 1, U Mobile was announced as the winner of the restricted tender to build a second 5G network ahead of market leader CelcomDigi and Maxis, both of which have more subscribers and transmission sites, as well as higher revenue.

The decision immediately set tongues wagging over U Mobile's ownership, both local and foreign. Malaysia's King, Sultan Ibrahim Iskandar of Johor, as well as Singapore's investment company Temasek, holds substantial stakes in the company, which is chaired by local magnate and Berjaya Group founder Vincent Tan.

The country's roll-out of the high-speed telecommunications network has been mired in controversy and delays since 2018, with various frameworks meeting resistance from the industry as well as consumers.

Prime Minister Anwar Ibrahim's administration finally decided in 2023 to move away from a cheaper single wholesale network (SWN) framework proposed in 2018 when his Pakatan Harapan was in power.

Instead of relying solely on the state-run Digital Nasional Berhad (DNB) set up by the Muhyiddin Yassin administration in 2021, Malaysia will have a dual wholesale network (DWN) with DNB also being majority-owned by private telecommunications companies.

U Mobile will thus have to build up a second network in competition with DNB, which already covers 82 per cent of Malaysia.

Mr Fahmi has insisted that the government's decision was based on merit, but this assertion is clouded by the fact that little is known about the tender specifications, even among corporates and financial executives The Straits Times spoke to in the telecommunications sector.