WHILE Digital Nasional Bhd (DNB) and the Finance Ministry (MoF) struggle to coerce the local telcos to buy into its Single Wholesale Network (SWN), Malaysia has cut a lonely figure in its SWN approach to 5G roll-out.
That the existing Reference Access Offer (RAO) terms by DNB are “not commercially viable” and likely to lead to higher customer costs and slower adoption rates is precisely a key contention point between local telcos and state-owned 5G agency apart from their refusal to become a “passive shareholder” with restrictive terms, according to EMIR Research.
“And if the RAO terms are not commercially viable even for the local telcos who operates in a ringgit Malaysia environment, margins for the foreign telcos could be further squeezed due to a very weak ringgit, making it absolutely not clear how this can be translated into a lower prices for Malaysian consumers,” opined the think tank’s CEO Dr Rais Hussin.
“Nevertheless, the deadline is here and gone. And two of Malaysia’s largest telcos have just reportedly declined to take up stake in DNB even though they are still open to continue discussing how to make ‘not commercially viable’ RAO, commercially viable.”
Rais was referring to a Reuters report yesterday (Aug 31) that telcos Maxis Bhd and U Mobile Sdn Bhd are not keen to to take up stakes in DNB – a setback that could further delay the Malaysia’s roll-out of 5G technology.
“Here lies another problem, DNB and the Finance Ministry (MOF) have reportedly dished out another dateline. ie Sept for the access agreement for the local telcos,” he further contended.
“This is despite the absence of regulatory framework for the 5G Access Agreement the Malaysian Communications and Multimedia Commission (MCMC) has yet to release the framework covering areas like Service Level Agreement (SLA) and pricing. Apparently it will be ready only in December 2022. Sign first, framework later.”
Rais further expects this issue to trigger other local and foreign telcos – including those who have stake in local carriers – to question the reasons for such a refusal.
“No foreign telco or investor will sign up for DNB equity under present conditions unless MOF underwrites the risks,” he pointed out.
“It is important to note logically that the four telcos that signed up earlier to take up the stake will have to revert to their respective boards as it was previously at RM200 mil per telco equity investment instead of RM300 mil now given two telcos have reportedly declined (given the total offer of equity investment at RM1.2 bil for 70%).”
“Forget not Telenor with a substantial shareholding (49%) in Digi.Com Bhd who is known for their good governance and integrity with impeccable transparency will start asking serious questions,” added Rais.
On this note, Rais reminded the authorities that foreign telcos have higher standards of governance and integrity with wholesome transparency and cannot be dictated by whims or fancies of political masters or unreasonable deadlines.
“They normally have higher and stringent levels of due diligence and what more if they are from a developed nation. Unless it is ‘North Korea Telecoms’,” he stressed. “So, the DNB saga will be a never-ending story with never-ending deadlines. 6G is in trials now, and even before the waves of 5G settles in Malaysia, 6G will start its roll-out elsewhere.” – Sept 1, 2022
