In November 2018, the Malaysian Communications and Multimedia Commission (MCMC) established a National 5G Task Force, comprising members from the private sector, Ministries, and agencies representing the demand and supply side of the ecosystem to study and recommend a holistic strategy for the deployment of 5G in Malaysia.
On 1 July 2019, MCMC embarked on a Public Inquiry ("PI"), where it received 15 written submissions from various parties at the end of the PI period on 30 August 2019.
A report of the PI was published on 29 September 2019.
Using the justification that they have the most extensive fibre coverage nationwide with more than 540,000 km fibre and core capacity, which will serve as the necessary backbone to the 5G network, Telekom Malaysia proposed for them to be appointed as a fully converged National Telecommunications Infrastructure Provider for 5G (InfraCo) who will provide all service providers with the equal and fair opportunity to use its network through regulated Open Access Wholesale Service arrangements on the basis in their response to the PI from MCMC.
In Dec 2019, the 5G Task Force presented its final report titled `5G Key Challenges and 5G Nationwide Implementation Plan' to MCMC and the Minister of Communications and Multimedia.
In the report, the 5G Taskforce said MCMC is considering the allocation of the 700 MHz and 3.5 GHz bands to a single entity, i.e. a consortium comprising multiple licensees, instead of allocating these bands to individual licensees.
MCMC said this approach would lower capital expenditure, where costs and duplication of infrastructure would be minimized as the consortium could leverage and optimize the current resources owned and operated by the relevant licensees.
Malaysian Institute of Economic Research (MIER) was also appointed to assess and provide input to MCMC on the impact of 5G technology and services on the country's productivity and economic growth.
In their report, MIER projected that 5 G-related economic activities are estimated to contribute an additional RM12.7 billion to the GDP between 2021 and 2025, wherein 2025 alone, the contribution of 5G to the Malaysian GDP is expected to reach RM5.3 billion and continuously rise in subsequent years.
On 1 January 2020, MCMC, in a press release, reaffirmed the report by the 5G task force, saying they are considering the implementation and rollout of 5G in the country to be allocated to a single entity comprising a consortium formed by multiple licensees instead of individual licensees.
Immediately after that, in Feb 2020, Telekom Malaysia reportedly said they were in talks with other telecommunication companies following the indication given by MCMC that they are considering a plan to form a consortium to implement the 5G spectrum.
However, instead, in a notice dated 15 May 2020 and posted on the commission's website, a document - labelled as Minister Directive No. 4 for 2020 on the MCMC's site - outlined the decision by the then Communications and Multimedia Minister to award the 700 MHz 5G spectrum to Axiata Group Bhd, Digi.Com Bhd, Maxis Bhd, Telekom Malaysia Bhd and Altel Communications individually which took everyone in the industry by surprise.
In June 2020, the said notice was cancelled by the then Minister for communications and multimedia.
In July 2020, the then Deputy Communications and Multimedia Minister was quoted to have said that the decision on whether the 700 MHz spectrum would be allocated to a consortium or individual licensees was still under discussion.
Forward to Feb 2021, the then Communications and Multimedia Minister, in an interview, was quoted to have said a Government of Malaysia Special Purpose Vehicle (GOMSPV) will be set up and wholly owned and maintained by the Finance Ministry, regulated by the Malaysian Communications and Multimedia Commission (MCMC) in partnership with Telekom Malaysia Bhd (TM) and Huawei Technologies Co., Ltd to offer 5G as a wholesale network service which is made available to other telecommunication companies by end-2021.
In March 2021, the government, through the Finance Minister, announced that a Special Purpose Vehicle (SPV) entity under the Ministry of Finance called Digital Nasional Berhad (DNB) will own the spectrum licences and will build out the physical network infrastructure and offer the network as wholesale to the telcos will be created.
According to this news report of 19 April 2021, 8 companies, i.e. Ericsson, Huawei, ZTE, Cisco, NEC, Nokia, Samsung and FiberHome, an information and communications technology network products and solutions provider in China, were invited by DNB to participate in the tender for the 5G infrastructure.
In July 2021, the government announced that from the four vendors who submitted their bids, Ericsson, whose bid was around RM700 million lower than the total cost of ownership of the next closest bid, was selected to design and build the 5G infrastructure.
In April 2023, following a statement by PM10 in Dec 2022, which said the present government would call for a review of DNB's 5G single wholesale network model, it was revealed that the EU and US envoys to Malaysia sent a representation to the government of Malaysia warning the country not to allow Huawei to build out our 5G network infrastructure, claiming it might undermine national security and close the doors to other investors.
Suppose the EU and US envoys are capable and issued a warning in today's environment. In that case, it is not a surprise if they also issued a similar warning to the government in April 2021 during the tender exercise for the 5G.
Given the speed with which Digital Nasional Berhad was formed – March 2021 – and an invitation was issued within one month after that in April 2021 to invite eight companies to participate in the tender to Ericsson being chosen in July 2021, a short four months when a project of such size, i.e. RM11 billion usually will take no less than a year to start and materialize in this country - the 5G taskforce alone took 13 months to prepare and issue their report and recommendation to the government - it does spark concern amongst the public whether that process and the decision to award the project to Ericsson was `forced upon' the country by countries in the EU and the US.
Did the then government give any `weightings' when evaluating the tender to the fact that 4 of the telcos had signed an MOU / Agreement to collaborate and work on 5G with Huawei and ZTE - Telekom, Maxis and Celcom signed MOU and Collaboration Agreement with Huawei while Digi went with ZTE - all in 2019 before the government even decided to form DNB to undertake the implementation and rollout of 5G?
The decision to partner with Huawei on a cybersecurity lab with the country's sole cybersecurity agency in February 2021 lends further credence and speculation on whether the EU and US envoys leaned on the country in ensuring that Huawei was not awarded the contract.
Did the government consider that Ericsson was charged twice and pleaded in a case brought by the US authorities before they were invited to participate in the tender in April 2021?
In the 1st instance, in a report in July 2019, the company reportedly agreed to pay $1.2 billion (€1.09 billion) to resolve a bribery case brought by US authorities where the company admitted to a campaign of corruption that began in 2013 across Djibouti, China, Vietnam, Indonesia and Kuwait, in an attempt to strengthen its position in the telecommunications industry.
Then in March 2023, the company again agreed to pay more than $206 million for breaking and violating the 2019 agreement by failing to provide documents and information the agency needed for its investigation and to bring charges against individuals accused of misconduct.
Both instances should already have disqualified them from participating in the tender exercise in April 2021.
With the revelation of the warning by the EU and US envoys recently and the admission by Ericsson that it conducted a campaign of corruption across several countries, maybe PM10 or Minister Fahmi should let the public know whether the decision to award the contract in July 2021 was made under pressure or the influence of foreign powers.
As the Communications and Digital Minister said in response to the warning from the EU and US envoys, Malaysia is a sovereign country whose government makes decisions based on what they think is best for the country.
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The User Content (as defined on Newswav Terms of Use) above including the views expressed and media (pictures, videos, citations etc) were submitted & posted by the author. Newswav is solely an aggregation platform that hosts the User Content. If you have any questions about the content, copyright or other issues of the work, please contact Newswav.
