MCMC: Cost concerns of DNB 5G access offer to telcos to be settled in a week or two

21 Apr 2022 - Soya Cincau

It has been more than a month since the Malaysian government decided to continue its 5G deployment through Digital Nasional Berhad (DNB) as single wholesale network (SWN). However, the stalemate between DNB and the telcos has yet to be resolved as the big four including Celcom, Digi, Maxis and U Mobile have recently raised concerns that the Reference Access Offer (RAO)_ for 5G access in its current form will not enable affordable and quality 5G services for the rakyat and businesses in Malaysia.

MCMC defends Single Wholesale Model for 5G

During an online forum organised by IDEAS titled “The future of 5G: Benefits and Challenges in Deployment”, the Malaysian Communications and Multimedia Commission (MCMC) defended the government’s decision to retain the SWN model. MCMC COO Dato Mohd Ali Hanafiah Mohd Yunus said the proposed Dual Wholesale Network (DWN) by the telcos will introduce unfavourable set of challenges.

He said this would result in duplication of investments in infrastructure and two networks will translate to higher wholesale charges. As with any wholesale setup, the economies of scale will come into play, segmenting wholesale is bound to create imbalance and would leave one prominent wholesale network controlling the market, which is what we don’t want to have.

Ali Hanafiah reminded that the spectrum is finite and with the SWN model, there’s no need to split it for specific service providers and this would ensure end-users will be able to get a similar quality of experience of the available spectrum subject to the respective terms and conditions of service of the respective telcos. In the SWN model, he added that DNB’s plan to reduce the risk of the digital divide with a supply-driven rollout may also bring consequential benefits through the expansion of fibre network and readiness of passive infrastructure.

MCMC claims two networks don’t mean no single point of failure

He also said the redundancy aspect that was said to be offered by a DWN could be seen as misleading. He said having two wholesale networks doesn’t mean there’s no single point of failure as the wholesale networks are independent of each other. Network reliability and security are better managed through proper network design which the requirement has been imposed on DNB.

Based on feedback by Mobile Network Operators (MNO), service innovation happens at the network core and under the current SWN, he said the MNOs have no restrictions to leverage on their network cores. They have been allowed and approved to roll out and establish their own core networks. This approach also has the benefit of providing service continuity, in the unwanted event that DNB’s 5G network suffers an outage, the existing 4G network should be able to provide network services and would avoid total disruption.

He shared there were proposals to split DWN between ubran and rural areas. However, he said, reliable 5G connectivity should not be differenciated by urban and rural areas, even more so for 5G, where it is beyond connectivity and is expected to impact various industries or verticals that are not confined by locations.

Ali Hanafiah also said besides having supply-driven approach, DNB is also committed to catering to demand by planning its rollout in consultation with all licensee. DNB does intend to take a supply-driven approach to deploy in areas that are not financially viable but would be ready for 5G services for the period to come. He said the approach was shown to be viable and successful in the previous government-led HSBB deployment which started in 2008. As of 31st December 2021, there are 6.8 million premises passed by fibre out of total of 9 million premises in the country, as the result of supply-led deployment.

GSMA Head of Public Policy for APAC, Jeanette Whyte said, with the SWN model, effectively, full fleged telcos with their own spectrum are now Mobile Virtual Network Operators (MVNO). This means the telcos are very much reliant on the services DNB provides and this is why there’s a need for a robust regulatory framework. It is the role of the regulator to ensure the framework is clear, transparent, mandatory pricing is available and everyone can reach an agreement.

She also said RAO negotiations have not concluded yet and there’s a lot of work that needs to be done. She is hopeful that this can be achieved but it requires all parties to work together to find a solution, however, it needs to be a solution that works for all operators so that they can provide solutions for consumers.

Jeanette emphasised that discussions need to be open and transparent, and to ensure that it’s fair for everybody. At the moment, Malaysia’s 5G rollout is being delayed compared to other countries such as South Korea which has started in 2019.

When MCMC was asked if a feasibility study was done before deciding on the SWN model, Ali Hanafiah said the single-entity approach for 5G was proposed after the release of the National 5G Task Force Report at the end of 2019. He said the current SWN is closely related to the approach but the difference is that the SWN is owned by the government instead of a consortium led by telcos and other licensees.

RAO concerns expected to be addressed soon

With regards to the RAO, he said there’s an instrument called the Mandatory Standard Access Pricing (MSAP) which is revised in a 3-year cycle. The last version was released in 2018 which unfortunately didn’t cover 5G. For the time being, there’s the RAO which is something that will be referred to between the MNOs and DNB.

The MCMC COO said they are coming towards the tail-end in finalising the RAO as there are some matters in regards to cost that needs to be ironed out. This is expected to be settled in a week or two.

When it comes to the quality of 5G services, there’s another tool called the Mandatory Standatd of Quality of Services (MSQoS). However, the latest version that was released in 2021 does not cover 5G. According to the MSQoS document, the current standard for wireless broadband access service is a network latency of not more than 150ms and download speed of not less than 2.5Mbps for 90% of the time. For fixed wireless access, the download speed shall not be less than 25Mbps, 90% of the time. The MCMC aims to revise the MSQoS covering 5G services by Q3 or Q4 this year.


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