On 19 February 2021, the Prime Minister of Malaysia announced at the launch of the MyDigital and the Malaysia Digital Economy Blueprint that Malaysia's 5G spectrum will be rolled out in stages from end-2021. At the same time, the Prime Minister announced that the provision of 5G infrastructure in the country will be led by Digital Nasional Bhd ("SPV"), a special purpose vehicle wholly-owned by the Malaysian Government and regulated by the Malaysian Communications and Multimedia Commission ("MCMC"). The SPV will be allocated the appropriate 5G spectrum and will build, own and manage the 5G infrastructure and lease spectrum to telecos that wish to provide 5G services.
We previously wrote about the 5G implementation efforts in Malaysia in our article, Jumping Back onto the 5G Bandwagon, which can be read here. A brief summary of the previous 5G implementation efforts in Malaysia is set out as follows:
  • In 2019, initiatives to implement 5G in Malaysia began with MCMC initiating a public inquiry on the allocation of spectrum bands for mobile broadband service in Malaysia for the 700MHz, 2300MHz and 2600MHZ. The Final Report by MCMC indicated that the award mechanism for the allocation of the spectrum bands would be through a tender process.
  • In Q1 of 2020, MCMC unexpectedly issued an Official Ministerial Directive to award the 703 MHz to 743 MHz and 758 MHz to 798 MHz to five companies. This Directive was reversed in June 2020.
  • In August 2020, it was announced that the initial plan to introduce 5G in 2020 will be deferred to end 2022 or 2023 as the Government introduced the new Jalinan Digital Negara (JENDELA) plan to improve existing 4G networks and coverage as well as a 3G sunset in preparation for the implementation of 5G.
Thus, the latest announcement by the Prime Minister comes as a surprise to the stakeholders in the industry. Whilst the acceleration of the 5G rollout from 2022 or 2023 to end-2021 is lauded, the introduction of the SPV as the only entity that will be allocated 5G spectrum and build and own the 5G infrastructure contradicts MCMC's earlier recommendation that 5G spectrum band be allocated through a tender process to a consortium or individual licensees.
The details of the SPV remain unclear but based on a media statement issued by MCMC on 24 February 2021, the 5G spectrum will be provided to the SPV who will build the network and offer capacity via wholesale. According to the Government, this structure will remove the burden of costly and duplicative investments in 5G networks by the private sector, thereby enabling 5G services to be offered to consumers at reasonable prices and telco companies to divert their financial resources to improve 4G coverage and quality.
According to the media reports, the approach adopted by the Malaysian Government in implementing 5G has not been adopted elsewhere in relation to 5G rollouts. While the Government's rationale for adopting this approach appears to make sense, it remains to be seen whether this novel approach will achieve the desired objectives of a cost efficient and reliable network.
In the meantime, the Government has moved with admirable '5G' speed in launching the SPV by announcing the appointment of a telco veteran as the chief executive officer as well as the members of the board of directors of the SPV.
Will this latest development be the final destination for Malaysia's route to 5G implementation, or just another stopover?

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