5G deployment Malaysia

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Dual network model: A boost to 5G deployment in Malaysia?

  • The Malaysian government has announced that a dual network model will now be adopted for the 5G rollout in the country in 2024.
  • The dual network model will only be offered after DNB’s coverage reaches 80% of populated areas, with Huawei and Nokia possible infrastructure providers. 
  • Malaysia had previously been deploying 5G via a single wholesale network through DNB and Ericsson. 

The whole world knows about 5G deployment in Malaysia. Since the technology was first announced, the country has witnessed several governments take over, each advocating something different about the network.

In fact, for those who remember, Malaysia was actually one of the first countries in the region to look into the network when it was initially announced. Several telco providers and private organizations were already prepared to work with 5G infrastructure providers on network trials and use cases in some parts of the country.

DNB’s 5G deployment in Malaysia

However, things took a turn when governments changed and Digital Nasional Berhad (DNB) was born. A special-purpose vehicle to deploy and manage the country’s 5G network, DNB signed a 10-year partnership with tech company Ericsson. Ericsson was to provide end-to-end 5G, comprising core, radio access (RAN) and transport, operations and business support systems (OSS/BSS) and managed services for the delivery of a nationwide 5G single wholesale network (SWN) for Malaysia.

This was where things got complicated. Almost all the telco companies were not in favor of a SWN and were initially opposed to what DNB had to offer. Despite this, DNB continued with the deployment of the network and 5G in Malaysia was officially launched in December 2021, with YTL Communications Sdn Bhd (YES) being the first telco company in the country to offer 5G services to consumers.

The remaining telco companies in Malaysia were still not happy and this delayed the network deployment again. A few months later, the government (under a different Prime Minister) announced that it will retain the SWN for national 5G deployment and will also offer telco companies the opportunity to subscribe to equity stakes in DNB.

A deadline was set for telcos to take up the offer. But the telcos were still not satisfied with the offer. After several extensions, four Mobile Network Operators (MNOs) – Celcom Axiata Bhd, Digi Telecommunications Sdn Bhd, YES, and Telekom Malaysia Bhd (TM) executed share subscription agreements (SSAs) to take up equity stakes in DNB.

The SSAs give effect to the MNOs’ subscription of 65% equity in DNB. The Government will retain the other 35% and hold a Golden Share. The Golden Share grants various rights and privileges and covers areas such as ownership, sale, or transfer of shares on the part of the Government. Two other telcos, Maxis and U Mobile did not take up the equity stakes.

5G in Malaysia

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A dual network model

After that, Malaysia had its general election and the government changed again. This time, the new government assured of a full review of the network. After a few months, the government has finally come up with a decision that a dual network model will now be adopted for the 5G rollout in Malaysia in 2024.

However, the dual network model will only be offered after DNB’s coverage reaches 80% of populated areas. DNB announced in January 2023 that Malaysia’s 5G network has already achieved almost 50% coverage of populated areas and is ahead of its target.

The announcement was well accepted by all the telco providers in the country. Following the announcement, CelcomDigi (following their merger) released a statement stating that both Digi and Celcom have terminated their previous respective SSA signed in November 2022 with DNB.

“As per the Government’s announcement, the earlier process to subscribe to Equity in DNB through the respective SSA is rendered void. The termination of the respective SSA will clear the path for CelcomDigi to participate in any new process, including Equity participation, together with the industry,” the statement said.

CelcomDigi also welcomed the opportunity to play a more active and direct role in the country’s 5G implementation, leveraging on their experience and resources, existing widest 4G network, and supply chain and partner ecosystem to support the Government’s 5G ambitions, as they look to bring the best 5G solutions and offerings to Malaysian consumers and businesses.

Meanwhile, Maxis is most likely the biggest winner of the announcement. In a statement, Maxis stated that it recognizes the importance of efficiently rolling out 5G and the economic benefits it will bring to all Malaysians.

“Maxis looks forward to providing 5G-related products and services to its customers soon, with a focus on affordability and adoption. The rollout of the second network is expected to commence under phase two, in which Maxis looks forward to playing a more direct role in the country’s 5G implementation leveraging its expertise, resources and existing infrastructure,” said Maxis.

Despite not being part of DNB’s 5G deployment, Maxis had already been developing multi-industry 5G use cases with major players for commercial use through its 5G Alliance. The company has also expanded its 5G international roaming services to more countries and has rolled out a range of 5G devices to its customers since last year.

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The return of Huawei and Nokia?

With the announcement of a dual network model, there has been talk that the telco companies would now be looking to work with Huawei again in deploying 5G in Malaysia. Given the partnerships the telcos had with the Chinese technology company in the past, it makes sense for them to continue working together in 5G as well.

For example, in January 2020, Maxis and Huawei signed an MoU to explore and collaborate on a TechCity Program in Kuala Lumpur. Both companies were supposed to work together to deliver 4G and 5G capacity solutions in 5G network design, deployment and operating efficiencies, as well as the setup of a 5G Innovation Lab to develop and bring new 5G use cases for various industries to commercialization when the new 5G spectrum is made available.

In July 2020, Celcom Axiata Berhad, Sunway Berhad and Huawei also signed a MoU to explore Malaysia’s first tripartite collaboration towards advancing smart township solutions encompassing IoT and AI with 5G connectivity.

However, working with Huawei on 5G deployment has also brought about some concerns. According to a report by the Financial Times, both the European Union and the US have warned Malaysia of national security and foreign investment risks if they were to allow Huawei to bid for a role in the country’s 5G infrastructure.

Malaysia’s communications and digital minister Fahmi Fadzil has brushed off concerns by the US and EU amid purported interest from Huawei for a role in the country’s 5G rollout.

“It’s important for us to stress that as a sovereign nation, Malaysia and the Malaysian government have the right and power to decide on our own policies without interference by others,” said the minister.

Apart from Huawei, Nokia would also be looking at how it can get a chance to be part of Malaysia’s 5G journey. Nokia had also initially submitted a bid to work with the government in 5G deployment but lost out to Ericsson.

For now, Ericsson’s role in 5G deployment in Malaysia is still ongoing with DNB. It will be interesting to see who eventually will be part of the deployment and how it will benefit both consumers and enterprises.

Whatever it will be, the telco companies have got their wish and it is now up to them in executing the delivery of the network to their customers. Either way, 5G is about to get a lot more traction in Malaysia.