PETALING JAYA: Malaysia will make the switch to a dual wholesale network (DWN) model for 5G, potentially by early next year, after 5G coverage reaches 80% of the country’s populated areas by the end ofthis year.

The decision to maintain status quo and continue with the single wholesale network (SWN) model, where Digital Nasional Bhd (DNB) will continue to roll out the 5G network infrastructure in the country until the targeted coverage is achieved, comes after five months since the announcement of the 5G rollout review by the government.

This is also known as “Phase 1” of the government’s plan to transition to a 5G DWN model, as unveiled at a press conference yesterday in Putrajaya.

Communications and Digital Minister Fahmi Fadzil said “Phase 2” will commence following the achievement of “Phase 1”, where Malaysia will move towards a DWN model. Under this phase, a separate entity, presently dubbed “Entity B”, will be tasked to develop the nation’s second 5G spectrum network.

“Currently, the rollout of the 5G network has reached 57.8% from 54.7% at the end of February. This means there is 22.2% left or another 2,000 sites more (to achieve the 80%). I think it is doable,” he said at the media briefing yesterday.

He also added the shift towards DWN will be carried out according to conditions which are in line with global standards, (offering) multiple networks for the people, as well as industries that are target groups for the use of 5G.

Industry concerns over pricing and transparency, as well as worries of a single government-run network would result in a nationalised monopoly, have caused the country’s 5G rollout by DNB to be delayed several times.

In March 2022, recommendation by major carriers for a second 5G provider was rejected by the previous government.

Prime Minister Datuk Seri Anwar Ibrahim had announced a review of a plan for a state-owned 5G network in December last year, with the reason that it was not formulated transparently by the former administration.

“This model also takes into account the sustainability of the telecommunications industry ecosystem in Malaysia, thus ending elements of monopoly that are often associated with DNB,” Fahmi said.

He added the move is also in line with the main principles outlined in the Prime Minister’s speech for Budget 2023, in that the transition gives way for the full participation of service providers without affecting existing 5G subscriptions that are priced at an affordable rate to the people.

On what other conditions will have to be met for the rollout of the DWN model, other than the 80% coverage of populated areas, Fahmi said reasonable pricing was one of the crucial things to be considered.

“The wholesale price that has been prepared by DNB will be the basic yardstick for the wholesale price for Entity B.

“If what has been mentioned before the wholesale price per gigabyte for DNB is 12 or 13 sen, then this will also be the basis for Entity B,” he said.

Fahmi stated that Entity B will also be an open tender process, much like the 5G contract awarded to Swedish company Ericsson by DNB in July 2021 to build a state-owned 5G network in the country.

“The government is not involved in any contractual matters.

“But we are concerned about the sanctity of the contract which is why we have chosen this model.

“So the contractual obligations as to what was signed between DNB and Ericsson stands. We will honour that,” he said.

Following the deal, the local authorities had called for a probe into the contract, given news reports had said the telecommunication company (telco) had allegedly breached pacts and had compliance issues in a deal in Iraq in 2019.

Addressing reports on Huawei’s efforts to lobby for a role in building 5G networks in Malaysia, he stressed that the government maintains a neutral stand on these matters.

“I have said in Parliament that we will entertain no lobby, whether in the country or out of Malaysia; whether by the local or foreign press.

“The government is agnostic to any of these matters because to some extent they are commercial in nature,” he said.

Meanwhile, telcos have generally welcomed the move by Putrajaya.

U Mobile welcomed the government’s decision to shift to dual 5G networks as early as January 2024.

“We share the belief that the upcoming shift in 5G network model would increase efficiencies and also encourage greater adoption for both consumers and enterprises.

“Apart from that, dual 5G networks will also heighten market competition, leading to better network infrastructure performance and the raising of customer service levels,” the telco said in a statement yesterday.

Maxis Bhd, meanwhile, stated it looked forward to playing a more direct role in the country’s 5G implementation in Phase 2 of the second network rollout by leveraging its expertise, resources and existing infrastructure.

Meanwhile, in a filing with Bursa Malaysia, CelcomDigi Bhd announced that both Digi Telecommunications Sdn Bhd (Digi) and Celcom Mobile had terminated their respective earlier share subscription agreements (SSA) with DNB effective immediately, as the long stop date to fulfil all the conditions precedent under the SSA had lapsed.

Digi had in October last year entered into a conditional SSA with DNB for the proposed subscription of 100,000 new ordinary shares in DNB for RM100,000 and 178.5 million rights to allotment of DNB shares for RM178.47mil.