The 5G rollout – many questions over lack of regulatory framework

 

The government’s special purpose vehicle Digital Nasional Berhad said it is on track to launch 5G in Kuala Lumpur, Putrajaya and Cyberjaya by December.

PETALING JAYA: With the rollout of Malaysia’s 5G network slated to begin in stages by the end of the year, questions have been raised about the speed at which the government has pressed forward with its plans and whether a lack of a regulatory framework will dent investor confidence.

A research brief drawn up by UK-based GSMA Intelligence has highlighted concerns not only with the much-discussed single wholesale network model, but also surrounding the governance of the special purpose vehicle tasked with managing the country’s entire 5G network, Digital Nasional Berhad (DNB).

Regulated by the Malaysian Communication and Multimedia Commission (MCMC), DNB said yesterday it was on track to launch 5G in Kuala Lumpur, Putrajaya and Cyberjaya by December, with 80% of the country to be covered by 2024.

However, according to GSMA’s report, “Malaysia’s initial 5G deployment will occur prior to the full development of the regulatory framework that will govern DNB.”

As the “rules of the game” have yet to be established, despite DNB already appointing Ericsson (M) Sdn Bhd to build and maintain the network in a RM11 billion deal, GSMA’s head of Asia Pacific Julian Gorman said questions still loom about how the network will be regulated.

The speed of the rollout is some cause for concern, he said, as planning and building such a large-scale project requires a lot of time and industry consultation.

“Good procurement vendor management takes time, you need to make clear the specifications for what is needed so the vendor can define what it needs to do,” he said, noting that DNB was announced in February, the tender launched in mid-April, and Ericsson selected in early July.

He said the process of merely drawing up the necessary contracts would typically take six to nine months, far longer than the less than three months it took DNB to award the tender to Ericsson.

Additionally, he said the speed at which the project has progressed calls into question the level of stakeholder input into both Ericsson’s appointment and the specifications of the network the Swedish telecommunications giant is set to build, as each of DNB’s biggest customers, like Maxis, Celcom and Digi, would have different requests for their markets.

If DNB’s output is not satisfactory, and these operators do not adopt 5G as quickly as perhaps expected, he expects DNB’s cashflow and industry innovation in Malaysia to be hampered. - FMT