Questions Over Second 5g Network

---

 
From Ong Kian Ming
I have been consistent in raising policy questions related to the Single Wholesale Network (SWN) model under Digital Nasional Berhad (DNB), a 100% government-owned entity then, when I was still an MP in 2022.
I asked 15 questions to the then CEO of DNB, Ralph Marshall, on the SWN model, to which he replied.
I also issued a list of questions to the mobile network operators (MNOs) , most of whom were not in favour of the SWN model, as seen in the joint reply of Celcom, Digi, U Mobile, and Maxis.
GSMA, an industry association representing mobile network operators, issued a longer and more technical reply to my questions on the SWN model, while Greg Coombs of Cognitio Consultants published a reply that largely supported the model.
I have also been consistent in calling for an open and transparent tender process for the second 5G network and a proper evaluation of the impact of a second network on the operational performance and financial condition of DNB.
The Malaysian Communications and Multimedia Commission (MCMC) issued a statement on Nov 1 announcing U Mobile as the MNO in charge of implementing the second 5G network. This was followed by a longer statement on Nov 6, which tried to explain the rationale of this selection.
I direct the following questions on the award of the second 5G network to MCMC, the communications minister, the digital minister, and the finance minister:
Questions to MCMC
1. Is MCMC willing to publicly disclose the terms of the tender for the second 5G network that was issued to the MNOs in June 2024 via the Applicant Information Package (AIP) for the 700 MhZ and 3.5GHz frequencies? This is necessary so that industry experts, policy makers and interested members of the public can properly evaluate the terms and conditions of this “beauty contest”.
2. Is MCMC willing to publicly disclose their “scoring method” under which U Mobile was judged to have provided the best bid for the second 5G network? This scoring method should include evaluations of detailed business plans for (i) network design (ii) rollout and planned coverage (iii) service requirements (iv) enterprise and industry development, and (v) finance and funding.
For each of the categories listed above, there should have been detailed assessments and scoring for the:
i. Network Design category
Evaluation of the detailed network design for full-pledged 5G capabilities, including but not limited to, 5G SA.Commitment of the number of sites that can be connected via fiber optics.Provision of network security commitments.ii. Rollout and Planned Coverage category
Strategy and timeline for nationwide 5G deployment, including the timeline for 5G nationwide Coverage of Populated Areas (COPA) to reach parity with existing 4G nationwide COPA.Demonstrate capacity and capability in network and infrastructure sharing with the existing 5G network (including passive and active network/ infra elements).Plans and numbers for inbuilding coverage.Commitment to use local vendors.iii. Service Requirements category
For wholesale business, to provide indicative prices which are equal or better than DNB, demonstrating the types/categories of service and bandwidth. Wholesale prices must be in the winning participant’s RAO (Reference Access Offer) and be offered on an equal basis (non-discriminatory) to all licensees.If offering retail prices, prices should be reasonable and not impose a burden to consumers.iv. Enterprise & Industry Development category
 Plans to roll out enterprise solutions, including in priority verticals such as manufacturing, oil & gas, agriculture & aquaculture, plantation, education, tourism, transportation & automotive, healthcare and smart cities.To provide plans to promote R&D, applications, sustainable technology, SME, and others.v. Financial & Funding category
Proposed funding mechanism.Is MCMC willing to confirm that copies of the tender/AIP documents and specifications were given to the digital ministry and the finance ministry for their perusal, especially for these ministries to evaluate the possible impact for the second 5G network on the operational and financial sustainability of DNB?3. Is MCMC willing to disclose the KPIs which U Mobile has to meet as part of its second 5G rollout? For example, DNB was given the target of reaching 80% COPA by 2024, which it reached in early 2024.
4. Can MCMC explain why U Mobile was given the option of working with the other MNOs for the rollout of the second 5G network? Was this part of U Mobile’s 5G proposal and does this indicate financial constraints faced by U Mobile in terms of the financial expenditure needed for the second 5G rollout as indicated by certain analysts?
5. What processes will MCMC put in place to ensure that the award of the network provision contract for the second 5G network is done transparently? For example, in a briefing to MPs in July 2021, DNB disclosed the process by which EY, a consultancy, went through to evaluate the tenders by network equipment providers, which was ultimately won by Ericsson.
Questions for the communications minister
1. Will the ministry organise a briefing session by MCMC for government backbenchers as well as to the opposition MPs on why U Mobile was chosen to implement the second 5G network and to show the detailed proposal by U Mobile with regards to its 5G rollout plan and also its financial proposal? For example, in DNB’s briefing to the opposition MPs in July 2021, a timeline showing three phases of deployment of 5G coverage was shown and this was the timeline which DNB exceeded by reaching 80% of COPA in early 2024.
2. Will the ministry explain the need for U Mobile to pare its foreign shareholding stake from the 48.3% currently owned by Straits Mobile Investments, which is owned by Singapore’s Temasek Holdings, to 20%? Is this a requirement which is part of the appointment of U Mobile as the owner of the second 5G network? Fahmi Fadzil, the communications minister, had already explained in Parliament that the shareholding of U Mobile is currently in line with the government’s policy that holders of individual Network Facility Provider (NFP) and Network Service Provider (NSP) licences cannot exceed 49%. How does reducing this shareholding to 20% help U Mobile with its 5G deployment? If the valuation of U Mobile increases because of its 5G appointment, wouldn’t the sale of the 29% stake owned by Straits Mobile largely benefit the foreign shareholder?
Questions for the digital minister
There have been recent complaints about the 5G service under DNB as more and more subscribers start to shift over to the 5G network with their new smartphones. In a recent Ookla report, the following was stated:
“Despite initially achieving some of the fastest 5G speeds in the region, Malaysia, with its unique 5G deployment strategy through a nationwide single wholesale network, has experienced a decline in speed as 5G services and availability have increased.
“Overall, the country’s 5G download speed has fallen from 506.96 Mbps in Q2 2023 to 387.39 Mbps in Q2 2024, as 5G service increased significantly from 9.4% in Q2 2023 to 26.5% in Q2 2024.
“The 100 MHz C-band spectrum allocated to the SWN provider, shared among five 5G providers, appears constrained as 5G service and availability increase, leading to declining median speeds.
“GSMA Intelligence data estimates that the adoption of 5G technology in Malaysia was 10.1% in Q2 2023 and increased to 37.0% in Q2 2024. The rapid adoption of 5G technology is impacting performance and will continue to do so as adoption rates increase and traffic demand per connection rises. This underscores the importance of ongoing spectrum management to maintain high-performance 5G networks and effectively address the increasing demands and new 5G use cases.”
1. How will you work together with the digital ministry and MCMC to ensure that DNB’s operational performance in terms of 5G speeds can be maintained, if not increased, and that the rollout of enterprise solutions under DNB’s spectrum will continue especially under Malaysia’s chairmanship of Asean in 2025, as you stated in a speech in June 2024?
2. Are there plans for DNB to transition fully to a 100% MNO-owned entity so that it can compete fairly with U Mobile once the second 5G network is rolled out to a high enough area of coverage? How will this impact the push by the government for greater 5G deployment, especially in the enterprise solutions space? And how will this affect the rollout of 5G coverage to the rural areas?
Question for the finance minister
1. How will you ensure that the rollout of the second 5G network will not impact the financial sustainability of DNB, especially if one or more of the MNOs decides at a future date to leave the DNB 5G network for U Mobile’s 5G network? Will the government have to “write off” some of DNB’s existing debts as part of the condition to sell DNB fully to one or more of the MNOs?
Without a clear and coherent policy on the part of the relevant ministries and the regulator, the gains we have made in the 5G space can easily be lost. - FMT
Ong Kian Ming is the Selangor DAP treasurer and a former deputy minister for the then international trade and industry ministry.
The views expressed are those of the writer and do not necessarily reflect those of MMKtT.

---