The Malaysia Communications and Multimedia Commission (MCMC) has awarded the opportunity to build the country’s second 5G network to Malaysia’s third largest operator, U Mobile, drawing to a close a two-year long process.
MCMC has instructed U Mobile to work with the nation’s other mobile operators, including those involved in bidding for the network rollout opportunity, CelcomDigi and Maxis, to deliver 5G-Advanced services to consumers. The MCMC will oversee the delivery of the rollout.
CelcomDigi and Maxis have not taken the news favourably and both are questioning how and why the MCMC came to its decision. Both CelecomDigi and Maxis said in separate statements that it will consider options moving forward, but also added that it will continue to offer existing 5G services to the rakyat (the Malaysian general public).
Malaysia’s three-year long 5G network saga ends
Five MNOs were originally in contest to run a dual network with the government-owned Digital Nasional Berhad (DNB), but YTL declined to participate, while Telekom Malaysia was disqualified after declining to stake in DNB in August. It therefore left U Mobile, CelcomDigi and Maxis who each took a minority stake in the DNB to compete for running the country’s second 5G network.
In March 2021, Digital National Berhad (DNB) was established to be Malaysia’s single wholesale 5G network operator, mandated to rollout Malaysia’s 5G network and infrastructure across the whole nation. The single network strategy was created to lower cost to deploy 5G infrastructure, provide consumers with high average speeds, and efficiently spread coverage. Operators, however, pushed back on the government's plans as it felt that it should be tasked by operators to build its 5G infrastructure and pointed to other countries' failures with a single wholesale network model. It also came to the opinion that DNB would eventually gain complete market leverage for 5G deployment.
After many back and forth disputes, major telcos finally agreed to sign up to DNB’s 5G network in October 2022 in 10-year access deals and launched commercial services.
The negotiations caused delays in 5G rollouts commencing in Malaysia. It wasn't until May 2023 that Prime Minister Anwar Ibrahim announced the transition from a single wholesale model to a dual-network model. After months of negotiations a deal was reach with Malaysia’s MNOs to between them acquire a 70% stake in DNB.
U Mobile’s 5G network rollout
U Mobile will reduce its foreign majority shareholding to 20%, ensuring greater Malaysian control and inviting participation from local investors. It also intends to work with technology providers including Huawei, and the DNB to optimise the 5G experience for users.
The company issued a statement, saying: “Our continuous investment in network expansion has allowed us to be the first in the country to provide unlimited data. U Mobile is committed to replicating our success for years to come.”
Maxis and CelcomDigi issued statements of their disappointment in losing out to U Mobile. In a statement, Maxis said: “Maxis notes the Malaysian Communications and Multimedia Commission’s (MCMC) selection of the mobile network operator to build and operate the nation’s second 5G network, a critical component in Malaysia’s communications infrastructure and development plan. We will engage with MCMC to understand the rationale for their decision and we will consider our options after discussions with all stakeholders.”
CelcomDigi said: “We believe we have presented a compelling technical and commercial proposal to build the second 5G network, leveraging on our financial standing and track record of investing in and deploying large-scale mobile networks, and delivering affordable, high-quality services to the rakyat. This included the ability to commence nationwide rollout almost immediately after spectrum award, to build a 5G network that will match the population coverage of our 4G and 4G+ network within the shortest time possible.
“Our priority remains to ensure that our customers have affordable access to a competitive, robust, and efficient 5G network. We will discuss with various stakeholders to consider several viable options ahead of us, to the benefit of our customers and shareholders,” the company concluded.
