Potential risks surrounding Malaysia’s 5G rollout, claims group

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PETALING JAYA: Several potential risks have been raised surrounding the governance of the special purpose vehicle tasked with managing the country’s sole 5G network, Digital Nasional Bhd (DNB).


UK-based GSMA Intelligence said in a report commissioned by DT Economics that most of the risks were related to lack of regulatory frameworks, monopoly and pricing as well as lack of clarity in policy objectives.

DT Economic representative Lara Stoimenova said there was an unclear approach to the pricing.

“When allocating spectrum to DNB, it is important that the government implements an approach which minimises potential competitive distortions between different mobile services,” she said at a webinar titled “Advancing Digital Malaysia” organised by GSMA yesterday.

“As a monopoly network operator, DNB would have the incentive and ability to use its position for its own commercial advantage. This would be particularly the case when negotiating wholesale access prices.”

Stoimenova said there was an unclear approach to network resilience and DNB had yet to set out how to minimise key project-related execution risks, including financing to ensure the upfront cash required to build the network and funding to ensure the long-term maintenance and operation of the network requirements.

She said DNB did not have a clear policy objective and mandate, and urged the government to clarify the company’s strategic priorities, including its role and responsibilities.

“There is a risk that, in the absence of regulation, the level of quality offered on the DNB network does not fulfil the requirements of end-users.

“This risk is particularly important in the context of the innovative applications that 5G is expected to provide in the enterprise sector, some with critical service delivery requirements,” she said.


Stoimenova said that following the key potential risks identified, DT recommended the Malaysian Communications and Multimedia Commission (MCMC) continue to conduct detailed public consultations with all stakeholders, namely industry players, consumers and civil society, to identify concerns and outline workable solutions for the 5G network.

The rollout of Malaysia’s 5G network is slated to begin in stages by the end of the year, with the launch in Kuala Lumpur, Putrajaya and Cyberjaya by December, with 80% of the country to be covered by 2024.

Meanwhile, in a statement, GSMA urged the government to consider the findings of the report to ensure the smooth rollout of 5G and quick take-up.

These included clarifying DNB’s purpose and allowing for periodic reviews of its scope, developing a comprehensive regulatory framework to govern DNB and considering alternative 5G delivery systems should the current plan run into roadblocks.

“A pragmatic approach is necessary by all parties to ensure DNB delivers the next-generation connectivity that Malaysia needs,” said Julian Gorman, GSMA’s head of Asia Pacific.

“Malaysia has a thriving mobile economy and a growing digital sector, but the Single Wholesale Network (SWN) model proposal risks that.”

He said entrusting the rights to 5G to a single entity could be detrimental to consumers, companies and Malaysia’s broader digitalisation ambitions.