Malaysia telcos agree to stakes in 5G vehicle as foreign players ‘knock on our door’

All six main mobile network operators (MNOs) have agreed to take up equity in a state-controlled 5G wholesale provider, with an access agreement the final step in ending years of delays that set Malaysia behind regional peers in offering the technology.

Finance Minister Tengku Zafrul Aziz said finalising terms that outline issues such as network quality, dispute resolution and most crucially cost was targeted for the end of the month.

The deal to take up a stake in Digital Nasional Berhad (DNB) also requires shareholders to be 5G access seekers, they must also buy 5G capacity from DNB, and the minister warned that foreign players were “knocking on our doors” to participate.

“All the key terms were finalized last Monday (Aug 8). One or two came very, very last minute, and only because they realized if I don’t come in, my competition is there,” Datuk Seri Zafrul said.

Zafrul admitted “I cannot say I’m confident” that the access agreement would be finalized by Aug 31, given the delays previously experienced in dealing with the MNOs. He added that he understood they would “want the best deal”.

However, he warned that “it’s very hard not to allow (foreign firms) because they are queuing up”, indicating interest had come from places such as India, Hong Kong and Singapore.

“But we have to give these guys an opportunity to be the main players because they have invested so much. But I have another group (of policymakers) who feel that it’s time to open up also because this is the reason prices are so high, because we are protecting CDMU, so maybe there’s some truth in it,” Zafrul said.

He was referring to the big four MNOs; Celcom, DiGi, Maxis and U Mobile. They previously insisted on holding a controlling 51 per cent stake in DNB. A substantial stake in DiGi is owned by Norwegian telecoms group Telenor.

The other two telcos engaged in acquiring a DNB stake are Yes and state-controlled Telekom Malaysia. Zafrul added that “whoever wants to sign can sign first”, indicating that out of the six MNOs, those amenable to terms could begin providing 5G to consumers before competitors. Yes has already rolled out 5G on a free trial basis.

Prime Minister Ismail Sabri Yaakob and Communications and Multimedia Minister Annuar Musa are among those pushing hard to roll out the technology as soon as possible, to narrow the gap with regional competitors such as Singapore and Thailand, which have already deployed the super-fast next-generation mobile network.

Malaysia believes 5G technology will create RM650 billion (S$199 billion) in economic value and 750,000 jobs by 2030.

SOURCE: NEWS AGENCIES