Maxis must clarify 5G partnership with Huawei

12 May 2022 - The Malaysian Insight

IN February 2019, Maxis announced it has signed an MOU with its long-term network partner, Huawei to cooperate in full-fledged 5G trials. Following this, Maxis commenced the first 5G live trials in the country, where it recorded close to 3Gbps download speeds.

Then in October 2019, Maxis announced that it has signed an agreement with Huawei for the provisioning of 5G network services in Malaysia. As part of the agreement, Huawei will be supplying 4G/LTE and 5G radio equipment and services to Maxis. 

In February 2021, the government announced that to speed up 5G deployment in the country, government-owned entity, Digital Nasional Berhad (DNB) will receive 5G spectra as well as build, operate and lease 5G infrastructure to new and existing telcos by the end of the same year.

In July 2021, DNB announced Ericsson will undertake the design and build of the national 5G network at a total cost of US$2.6 (RM11.4) billion. The contract includes the design and development of the end-to-end 5G network comprising core, radio access and transport network, operation and business support systems and managed services. Separately, Ericsson said it will undertake capacity building and innovation programmes to support local vendor development and participation, as well as to boost 5G adoption and developing use cases to accelerate industry participation.

A year later in March, the government announced that mobile network operators (MNOs) will be offered up to 70% of equity in DNB.

As recently as last week, the communications and multimedia minister said only two MNOs have agreed to take up equity in DNB while the rest, including Maxis, have yet to respond to the offer.

As Ericsson will be building the core network, would Maxis be using Huawei equipment outside the core network? 

It is important that the Maxis board explain to the public how it intends to mix and match its contractual commitments with Huawei and Ericsson.

Huawei has made it known that its radio gear will not interoperate with non-Huawei equipment. 

If Maxis is to participate in the equity of DNB, what are the potential incompatibilities between its Huawei, and Ericsson’s equipment?

Does the technology deployed with Huawei equipment needs to be replaced? If yes, what are the additional costs for replacement?

Unlike in the United States, where the government reimburses telecom carriers for removing existing equipment made by Chinese vendors such as Huawei and ZTE, there is no such programme in the country to help Maxis.

Already it is projected that MNOs may have to pay upfront wholesale charges to DNB while 5G income will be limited for at least the next three years.

The commercial launch of 5G was on December 15, 2021. The target population coverage is to reach 39% by end-2022, 73% the following year and 86% by 2024. How does this rollout plan fit into Maxis’ capital expenditure plan for the next four years?

Does the Maxis board plan to reveal its final decision for adoption in the interests of its shareholders? Given that the company is listed on Bursa Malaysia, governance and transparency are required and its key performance metrics should be scrutinised by the investing public and its institutional shareholders.

Maxis does not call itself Malaysia’s leading network for nothing.

Leadership is about preparing for what’s next.

Is 5G a race that Maxis aims to win? – May 12, 2022.


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