5G rollout: Govt should not be involved in business, Johari says

A BN MP has criticised the government for getting involved in business, calling it “misplaced” as it should be focused on managing the country.

Citing the 5G rollout issue as an example, Johari Abdul Ghani said the government could have engaged telecommunication companies (telcos) directly instead of setting up Digital Nasional Berhad (DNB) – special purpose vehicle (SPV) parked under the Finance Ministry.

"That should be the government’s role instead of going into business. The government (should) focus on running the country and collecting taxes.

"When the government starts to do business, that is where a lot of problems arise," the Titiwangsa MP was quoted as saying in an interview with Free Malaysia Today (FMT).

"We (Malaysia) set up a company to deal with the telcos (but) they do not have confidence in the government entity.

This, Johari added, resulted in the lack of buy-ins from the industry players as the rollout progress reached around 40 percent.

Titiwangsa MP Johari Abdul Ghani

"In Thailand, when the government decided to implement 5G, they did not set up a 5G entity (SPV). As a result, their rollout was fast and smooth," said the former second finance minister.

Johari then cautioned that the government would not be able to recover its investment of around RM16.5 billion on the 5G infrastructure, involving 80 percent coverage, if the 5G rollout fails.

"But if you give it to the private sector, they know how to handle it, (then) we just need to make sure we control the mechanism to ensure it benefits the government and rakyat," he said.

Johari noted that by leasing out the spectrum to existing network providers, he said the government could generate an estimated revenue between RM5 billion and RM6 billion.

"These network providers will then further invest in a demand-driven network rollout, which would not only be faster than DNB but also reach communities and industries that need 5G first," he said.

Johari added that the private sector's deployment of 5G would create more job opportunities through its economic multiplier effects.

DNB was set up by Putrajaya to build and own Malaysia’s 5G network infrastructure.

However, detractors have previously questioned the need for the government to get involved in the telecommunications sector and expressed concerns about the cost of such an endeavour.

Putrajaya is currently reviewing the RM11 billion 5G network contract awarded by DNB to Swedish telecommunications giant, Ericsson, by the previous administration.

To date, five mobile network operators - U Mobile Sdn Bhd, Celcom Axiata Bhd and Digi Telecommunications Sdn Bhd (which later merged into CelcomDigi), Telekom Malaysia Bhd and YTL Communications Sdn Bhd - have inked 5G agreements with DNB on Oct 30 last year to provide 5G services in the country.

However, Maxis Berhad, the country's second-largest telco with around 20 million subscribers, has not joined DNB's 5G network programme as of yet. - Mkini