Establish independent entity to build, lease fibre to telcos for 5G

 

From Mohamed Awang Lah

It has been three years since 5G was launched in April 2019. It was quite a big event. Since then, progress has been rather slow. Digital Nasional Bhd (DNB) was later established to implement a single wholesale network for 5G.

A reference access offer has since been made by DNB. Looking at the proposed bandwidth price, it is quite steep, compared with the mandatory standard on access pricing as determined by the Malaysian Communications and Multimedia Commission (MCMC). However, it is not my intention here to comment on the controversies surrounding this as many articles have been written about it.

We must get back to the basic issue – the digital gaps – in rural areas and in many parts of towns and cities. We can partially resolve it with 4G or 5G. But many people erroneously think that wireless services can resolve broadband problems. In fact, all high-speed wireless services require fixed-link connectivity and fibre optic links are unavoidable. In the past, we made a multibillion ringgit mistake by assuming that the wireless service could stand on its own.

Our broadband problem today is primarily due to lack of fibre connectivity in many parts of the country. In the areas where plenty of fibre exists, they are exclusive to the owners who lease bandwidth to competitors. Leasing of the actual fibre is not done.

The term “fibre” means dark or unlighted fibre. With the right equipment, the bandwidth which can be delivered through a single strand (similar in size to our hair) of fibre can be almost unlimited. A fibre cable can bundle many strands – 12, 24, 48, 96, 144, 192, etc. A few cables can be laid in a single duct and multiple ducts can be buried in a single trench. A link needs only one or two strands. As an example, a 144-strand cable can provide at least 72 links, and each link can transmit data at speeds of multiple gigabits or terabits per second or higher, depending on the transmission equipment.

Fibre connectivity (and towers) is expensive to build. Hence these must be shared by telcos, including mobile network operators. However, fair sharing can only be offered by an independent third party. This is the crux of the issue. There should not be any conflict of interest between the lessee and lessor; they should not compete against each other.

It is therefore necessary to establish an independent entity (heavily regulated) to build and lease fibre to telcos for 4G, 5G, FTTx, WiFi and other services.

With fibre, existing 4G services can be significantly improved while 5G services are being rolled out. Fibre can also be used to offer fibre-to-the-premises (FTTP) service for fixed broadband to residential, commercial and office premises. Other services such as CCTV can also ride on the same fibre network.

All telcos can compete in the retail market (by using technology of their choice) in cities, towns and villages. Fibre routes should be within a half kilometre from any premises in populated areas. Rural people can then enjoy similar services as people in cities; and they can participate in digital economy activities. In this way, digital gaps will be wiped out.

Who should pay for the construction of fibre? I think USP (Universal Service Provision) funding should be sufficient over a five-to-ten year period. All telcos have been contributing 6% of their annual revenue to this fund. Once fibres are in place in all populated areas, USP contribution can be reduced and eventually abolished. The entity that builds and operates the fibre network can be self-financing based on the cost-plus model. Excess revenue can be used to expand the coverage to new areas. The fibre leasing rate can be gradually reduced as the volume increases.

The government needs to impose new policies. For instance, whenever a road is built or upgraded, the ducts for fibre must be included. Ducts should also be laid to cross highways and roads at strategic locations. It will be very costly to dig the road later.

A truly universal service can then be realised and high-speed broadband can be considered as a given, like electricity and water supply. With lower cost of infrastructure and more competition, consumers can have more choices and enjoy better quality services at lower cost. - FMT

Mohamed Awang Lah has been involved in internet services since its inception in the mid-1980s. Prior to retirement, he was the CEO of JARING Communications Sdn Bhd.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.