As 5G rollout plan drags on, Gov’t urged to reveal details of DNB deal with 4 telcos

A PKR leader has sought clarification from the Government over the new share distribution between Digital Nasional Bhd (DNB) and four mobile network operators (MNOs) for the national 5G rollout plan before the deal is signed.

On Tuesday (Sept 20), Putrajaya said it hoped the access agreement with local telco providers Celcom Axiata Bhd, Digi Telecommunications Sdn Bhd, Telekom Malaysia Bhd and YTL Communications Sdn Bhd (YES) could be finalised and signed by the end of the month.

This after Maxis Bhd and U Mobile Sdn Bhd pulled out of the Government’s 5G rollout as they were not keen on being minority shareholders in the DNB, the country’s new and sole 5G operator.

PKR Central Leadership Council member G. Manivanan said Malaysians, as the end-users of the rollout, have the right to know the essence and details of the agreement, adding that it is an “untested and unproven” mechanism approach.

As such, the former Kapar MP expressed hope that the Government, through the Finance Ministry, as well as DNB, will answer his five questions on the access agreement.

G. Manivanan
G. Manivanan

They are:

  1. What is the price model and network access plan agreed upon between DNB and the four telcos?
  2. How much is the equity holding between DNB and the four telcos, and who is the majority equity holder in the 5G project?
  3. To what extent is the role, influence and investment control of the four telcos in this 5G project?
  4. Will DNB charge a fee or payment from telcos for 5G access or spectrum allocation?
  5. What is the content of DNB’s Reference Access Offer (RAO) letter that should have set the price, service commitment and other details for the 5G wholesale model?

Manivanan noted that discussions and agreements between DNB and the local telecommunications companies have been delayed several times – from May 2022 to June to July, and now September, “for reasons known only to those involved”.

“Therefore, I am demanding answers to my questions and urge the Government to be transparent on the essence and details of the agreement between DNB and the four telcos before it is sealed.”

“Single Wholesale Network method”

The national 5G rollout plan is based on the Single Wholesale Network (SWN) method, with the full implementation mandate given to DNB, a company owned by the Finance Ministry that was established in March 2021.

As such, DNB is the sole contractor that monopolises this project, whereas the telecommunications companies act as wholesalers offering 5G services to the end-users.

Manivanan noted that other countries take a different approach, where the right to develop the 5G spectrum is auctioned to telecommunications companies, thus creating competition and generating revenue for the Government.

He lamented that the rollout will involve large funds from taxpayers, who will also ultimately end up paying for the service.

Last month, Reuters reported that Maxis and U Mobile would be pulling out of the Government’s 5G rollout plan as they were not keen on being minority shareholders in the DNB – the latest snag in the project.

In November 2021, the national 5G rollout plan made headlines when Reuters reported that none of Malaysia’s major mobile carriers had agreed to the plan.

It reported telcos as hesitating to accept DNB’s proposed pricing plan, under which they would supposedly end up paying more than they would if they rolled out 5G on their own.

In an apparent move to appease the telcos, the Government eventually offered to sell 70% of DNB to mobile operators, with the Government to hold the remaining 30% of stakes in DNB through a planned injection of RM500 mil by the Finance Ministry.

To date, however, the sale has yet to be finalised.

In July 2022, Parliament was told that coverage of Malaysia’s 5G plan had reached 27%. – Sept 22, 2022


Main photo credit: Malay Mail

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