The government of Malaysia is poised to make a critical decision in the short term about the role of Digital Nasional Berhad (DNB), a state-backed 5G wholesale provider, according to local press reports. Digital and Communications Minister Fahmi Fadzil stated that the government had yet to decide the role of DNB, and that they would need to consider several factors, not just from a monopoly point of view.
DNB was established by the previous Malaysian government as a special-purpose vehicle to deploy and manage Malaysia's 5G network. Last year, former Prime Minister Muhyiddin Yassin launched an initiative for a state-owned vehicle to own all 5G spectrum, allowing various carriers to provide mobile services across Malaysia in a wholesale/MVNO arrangement. After this plan was unveiled, the country's telcos raised concerns about a single state company owning all spectrum frequencies.
Celcom Axiata, Digi Telecommunications, Telekom Malaysia, U Mobile, and YTL Communications are local carriers that are already offering retail 5G services available to their subscribers after signing their respective 5G access agreements with DNB in October 2021. However, the new Malaysian government announced that it would review the rollout of the national 5G network. The new prime minister cited a lack of transparency in the plan as the reason for the review.
According to a recent report by Singaporean investment bank UOB-Kay Hian, DNB could potentially select a second vendor for its 5G network. The report revealed that DNB is not exclusively committed to Ericsson, which was selected in July 2021 to build DNB's national 5G network. The report also suggested that a provision related to the introduction of a second network provider could be included in the contract, which would allow vendors such as Nokia, Huawei, or ZTE to participate in DNB's 5G rollout plans.
DNB has announced that its 5G network has achieved nearly 50% coverage of populated areas, with about 3,900 sites at the end of 2022. The company aims to reach its target of 80% coverage of the country's populated areas by the end of 2024, and its 5G network currently reaches about 15 million people, with full deployment expected to reach 30 million.
The decision on the role of DNB in Malaysia's 5G network will undoubtedly have a significant impact on the country's telecommunications industry. Many factors must be considered, such as the potential for a monopoly in the market and the inclusion of additional network providers. It remains to be seen what the Malaysian government's decision will be, and the telecommunications industry in the country and beyond eagerly awaits the outcome.
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