Malaysia plans to set up second 5G network from 2024: Sources

KUALA LUMPUR/SINGAPORE – Malaysia plans to introduce a second 5G network from 2024, four sources told Reuters, in the latest policy shake-up aimed at dismantling monopolies and promoting competition by Prime Minister Anwar Ibrahim’s six-month-old administration.

Malaysia’s 5G roll-out by state agency Digital Nasional Berhad (DNB) has seen repeated delays since its launch in December 2021 because of industry concerns over pricing and transparency, as well as worries that a single government-run network would result in a nationalised monopoly.

Since taking office in November 2022, Datuk Seri Anwar has ordered reviews of billions of dollars in government projects as he looks to strengthen governance and minimise wasteful spending.

He has also vowed to boost competition to ensure better services for the public.

Mr Anwar’s government is now planning to introduce a second 5G network from January 2024 to challenge DNB’s lock on the market, four sources familiar with discussions told Reuters, declining to be identified due to the sensitivity of the matter.

Communications and Digital Minister Fahmi Fadzil said the government has yet to decide on the 5G roll-out.

“Right now, we are still in the process of review. We have had discussions with all related and relevant parties,” he told reporters on Sunday. 

“We have not come to a decision yet. So, we have to wait for the announcement when it happens,” he added.

He said the Cabinet would deliberate on the matter on Wednesday.

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

DNB deployed its network in late 2021 with the participation of two telecommunications firms on a trial basis.

After months of protracted talks, all but one of the country’s five mobile operators agreed in October to use DNB’s network, opening 5G services to more customers.

The roll-out came under scrutiny again, however, after Mr Anwar took office in November and announced a review of the 5G plan, saying it had not been formulated transparently by the previous administration.

DNB denied that claim.

The plan for a second network will be contingent on DNB and mobile operators ensuring that 5G network coverage reaches the government’s target of 80 per cent of the country’s populated areas by the end of 2023, the sources said.

Four Malaysian telco firms – Maxis, U Mobile, Telekom Malaysia and YTL Communications – did not immediately respond to requests for comment.

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DNB and a fifth firm, CelcomDigi, declined to comment.

CelcomDigi directed further queries to the government.

Mr Fahmi said last week that 5G network coverage had reached 55 per cent in populated areas.

DNB has said a single network would reduce costs, improve efficiency and accelerate the building of infrastructure.

It was not clear how the proposal for a second 5G network would affect DNB’s existing agreements with its development partner Swedish telecoms giant Ericsson and other mobile operators.

Three carriers – CelcomDigi, Telekom and YTL – agreed in 2022 to take up a collective 65 per cent stake in the agency, with the government holding the remaining 35 per cent.

Two major mobile operators – Maxis and U Mobile – declined to take up equity in DNB, Reuters reported.

U Mobile later joined other telco firms in signing up to access DNB’s 5G network.

Maxis has said it will wait until the government review of DNB is completed.