Country profile: Malaysia

Malaysia’s unique approach to 5G has taken another step forward. In October 2024 the Malaysian government announced the award of its second open access 5G network to the country’s smallest MNO, U Mobile. Digital Nasional Berhad (DNB) will continue to operate the first open access network as it has since May 2023. Four MNOs - Maxis, U Mobile, YTL and CelcomDigi – have taken an equal 16.28% share in DNB, leaving the Ministry of Finance with an approximate 35% stake in DNB). With two networks rolling out 5G TowerXchange expects to see lease up increase across the networks of the towercos active in Malaysia, following the depressed levels of co-location over the last years.

The country is home to a competitive MNO market, led by multinational MNOs Maxis and Celcom Digi; the latter was formed following a merger between Telenor and Axiata’s businesses in the country. As summarised at TowerXchange’s Meetup Asia 2023 by Malaysia’s Minister of Communications, Fahmi Fadzil, policy in Malaysia is driven by digital transformation, facilitated by 5G densification and plans for complete 4G coverage across the country. The tower industry is seen as a key enabler of cutting-edge high speed connectivity in densely populated urban hubs as well as closing the huge remaining rural infrastructure gap, said Fadzil.

The country’s largest tower, EDOTCO, has pursued a policy of rolling up state backed towercos in recent years, and DigitalBridge backed towerco EdgePoint Infrastructure has begun following suit after commencing operations in late 2020.

Service provider OCK own approximately 500 towers in the country, and other non-state backed towercos include Tele-flow, Naza Communications and Omnix.

EDOTCO’s has been active on the M&A front with the acquisition of local towerco Touch Mindscape. The acquisition boosted EDOTCO’s tower count by around 1,000 sites (89% of which are ground based towers) and they also acquired approximately 750km of fibre.

DigitalBridge backed EdgePoint Infrastructure, headed by former EDOTCO CEO, Suresh Sidhu, entered the Malaysian market in February 2021 with the acquisition of small local player GTP Network. EdgePoint bolstered their position in June with the acquisition of slightly larger towerco, Asiaspace.

In 2021, Umobile was rumoured to be considering both an IPO, and a sale of its 1,400 sites for a sum of around 500 million ringgit (US$120 million). However, neither transaction occurred. It is now rumoured that U Mobile will move forward with an IPO of at least RM10b (US$223mn) in 2025. Winning the second 5G network contract will increase U Mobile’s capex and therefore may also lead to a renewed interest in selling its towers.

Operators in Malaysia still own over 16,000 sites in Malaysia. Many of these sites are managed by the operators themselves, but Malaysia is also one of EDOTCO’s largest managed sites markets, and the towerco collects a fee to manage 13,268 telecom towers in the market.

While The Malaysian Communications and Multimedia Commission (MCMC) has offered well-defined guidelines at a national level, regulatory complexity exists at a state level. State backed towercos are solely responsible for permitting and building towers in certain states, which makes it challenging for national players such as EDOTCO.

Whilst it is a mature industry, the tower market is still growing with 1,000-2,000 new structures, including street level furniture, being put up every year. The government owned Jendela scheme has been responsible for funding around 2,000 new 4G towers since September 2020, mainly in rural areas that lack commercial viability.

The scheme was refreshed in the March 2023 budget by the new government and will be expanded to provide digital connectivity in 47 industrial areas and nearly 3,700 schools with a budget of RM 750 million.

Growth is being driven by operators needing to support current 4G requirements, as well as meet the constantly growing demand for higher capacity and speed as data usage increases. Most of the growth opportunities for towercos come in the form of infill solutions.

Operational complexity in Malaysia is low, with towercos primarily focusing on the land and structure, while responsibility for power remains with MNOs. Load issues mean that battery deployment is widespread, but grid reliability is generally solid, especially in urban areas. Less populated states of Sarawak and Sabah are where the vast majority of Diesel Gensets in the country can be found.