PUTRAJAYA: After multiple delays, the million-dollar-question about how Malaysia wants to deploy the 5G infrastructure nationwide was finally answered.

       The government announced yesterday that it will be maintaining the single wholesale network (SWN) model, despite earlier resistance among mobile network operators (MNOs) like Maxis Bhd, Celcom Axiata Bhd, Digi.com Bhd and U-Mobile Sdn Bhd to participate in the model.

       However, in order to appease the MNOs, the government said it will be disposing of the majority stake in Digital Nasional Bhd (DNB), or up to 70% to be exact, to the MNOs.

       This confirmed StarBiz’s earlier report that the government is looking to pare down its stake in DNB to private players, ahead of its previous target of 2024.

       Despite controlling just a minority interest of 30% after the share sale, the Finance Ministry will own a “golden share” in DNB.

       With a golden share in hand, the government would be able to veto strategic decisions made by the board, including overruling the appointment of top management positions. This offers the Finance Ministry the power to exercise its right to exert control of DNB, if needed.

       DNB is the government-owned entity that was entrusted to roll out 5G connectivity across Malaysia on a cost-recovery approach.

       Under the SWN model, 5G spectrum will be allocated exclusively to DNB. The MNOs will pay an upfront wholesale fee to DNB to enjoy the 5G access, which would then be transferred to their respective end-users coupled with some value-added services.

       The decision on the 5G model was jointly announced by Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz and Communications and Multimedia Minister Tan Sri Annuar Musa in a statement yesterday.According to Tengku Zafrul, the decision was made after considering several different models for the national 5G network infrastructure.

       “Ownership, equity value and other aspects related to this proposed equity participation are subject to negotiations between DNB and the telecommunications companies, where the agreement is targeted to be finalised in the near future,” he said.

       Meanwhile, Annuar said that the details of DNB equity interest sale will be finalised by end-June after discussions with the MNOs.

       As for the price to be paid by the MNOs for the stake in DNB, it will be determined by an independent valuer, Tengku Zafrul said.

       Even with the MNOs as shareholders, Tengku Zafrul added that DNB will commit to offer 5G access at less than 20 sen per GB, as promised before.

       When asked whether the shareholding change in DNB will affect the previously signed tenders including with Ericsson, Tengku Zafrul pointed out that the sanctity of the agreements will be upheld.

       Ericsson has entered into an exclusive 10-year partnership with DNB to deliver a nationwide 5G SWN for Malaysia.

       The MNOs had previously lobbied the government to allow the establishment of a second wholesale network, to be run entirely by a consortium of MNOs.

       However, DNB chief executive officer Ralph Marshall has previously warned that there would be “enormous implications” if the government allows dual wholesale networks (DWN) to co-exist.

       Yesterday, PublicInvest Research said in a note that the Finance Ministry estimated a total cost of RM17bil if the 5G implementation is done under the SWN model.

       The cost includes the 5G’s infrastructure and equipment cost of RM12.5bil, and financing and corporate costs, over a 10-year period, of RM4.5bil.

       Meanwhile, it would cost around RM30bil to RM35bil if the country is looking to deploy 5G under the DWN model.

       The research house also noted that although the DWN model comes with a costlier 5G deployment, a more competitive landscape should lead to lower cost in the long run.

       In terms of funding, the Finance Ministry had said the implementation of 5G through DNB would not involve public funds.

       “Hence, if it involves private funds, there could still be risk that DNB may not be able to invest heavily in unprofitable areas,” according to PublicInvest Research.

       In a joint statement issued yesterday by the Finance Ministry and the Communications and Multimedia Ministry, it was said that the public-private partnership in the 5G rollout will simplify DNB’s efforts to achieve 80% population coverage within three years or by 2024.

       Annuar noted that under the previous 4G implementation, it took the country about seven to eight years to reach 80% coverage.

       Currently, DNB is deploying 5G infrastructure in Johor Bahru and they have marked Perak, Penang and Selangor as their upcoming locations.

       Looking ahead, Tengku Zafrul said the rollout of 5G will catalyse the nation’s socio-economic transformation, which will contribute RM650bil over 10 years to the country’s gross domestic product value.

       He also said that the 5G technology will create about 750,000 high-skilled employment opportunities in Malaysia.

       Following the government’s 5G decision yesterday, YTL Communications said it fully supports the move to retain the SWN model and allow MNOs to participate as shareholders in DNB.

       YTL Communications is the owner of Yes and is the first and only telco to offer 5G services using DNB’s network.

       According to YTL Communications managing director Datuk Yeoh Seok Hong, it is now incumbent on all the MNOs to support and accelerate the government’s vision to bring 5G to the entire country by 2024 at the lowest cost to the rakyat.

       “The successful implementation of the 5G network will provide a strong digital backbone for Malaysia and accelerate economic growth as well as the digitisation of the economy.

       “As the first-to-5G in Malaysia, YTL Communications is seeing tremendous excitement and uptake of our 5G services.

       “With average speeds of 600Mbps experienced by users on our service, we are proud to be able to bring world-class services to our customers,” he said in a statement.