VOLUNTARY network sharing agreements provide a viable alternative for Malaysia’s mobile sector to thrive as opposed to a mandated 5G single wholesale networks (SWNs) landscape.
This is because SWNs can reduce innovation due to lesser incentives for network deployment and the potential increase in complexity to deliver innovative solutions, particularly in the enterprise segment, according to GSMA Intelligence.
“Competing network providers have greater scope for product differentiation by offering a better service than their competitors (eg. faster speeds and higher reliability) which can deliver significant benefits to consumers in the longer term,” GSMA Intelligence said in a report entitled Single Wholesale Networks and Network Sharing: Sharpening Discussions on the 5G Repercussions.
“This is derived from innovation (including innovation to increase efficiency and reduce costs), greater choice, and stronger incentives for price competition.”
While Malaysia has a thriving mobile sector, the current 5G roll-out plan remains unproven, according to GSMA Intelligence’s head of Asia Pacific Julian Gorman.
“Malaysia’s existing licensing framework provides a competitive dynamic with a landscape of four national mobile network operators (MNOs) as well as mobile virtual network operators (MVNOs) that has resulted in significant growth and innovation in mobile applications and services over the years,” he observed.
“Malaysian operators made significant investments in their 5G capabilities in anticipation of regulators making 5G spectrum available to switch on their networks.”
There are now 172 live 5G networks in 68 countries worldwide – the technology is ready and can be deployed rapidly. As noted earlier in September, GSMA remains concerned with the unproven SWN model for 5G that will threaten Malaysia’s digital competitiveness.
“Despite a clear history of the risks associated with monopoly service provision, some policymakers in the 4G era have started to consider that a move to a SWN could achieve greater coverage compared to models that rely on traditional network deployment,” recalled Gorman. “This has not been the case.”
In fact, there has been numerous evidence that SWNs have not been successful in delivering the “better and cheaper” services that were promised. Only three SWNs are currently operational, in Mexico, Belarus and Rwanda. Each face distinct challenges, including roll-out speed, service quality and profitability.
The SWN in Mexico sought bankruptcy protection earlier in the year. Three other major projects in Russia, Kenya and South Africa were all abandoned after impacting digitalisation efforts in these countries.
“GSMA believes that a pragmatic approach is needed by all parties to ensure that Digital Nasional Bhd (DNB) delivers the next generation connectivity that Malaysia needs,” asserted Gorman.
“In Ericsson, DNB has an established partner with a proven track record of delivering best-in-class 5G services. The political determination to launch DNB can’t be denied, however there is a lack of clarity on DNB’s mandate and the regulatory framework under which it will be governed.”
To mitigate the risks of DNB as identified in an independent report commissioned by GSMA, three measures are needed:
- Clarity of DNB’s mandate and regular monitoring of its performance against its strategic objectives;
- Introduce a fit-for-purpose wholesale regulatory regime at the same time as the DNB starts its commercial operations; and
- Retain flexibility to allow alternative delivery options for 5G networks and services in Malaysia.
“In the three months since the publication of the report, there has been some progress in the above areas but still more needs to be done for Malaysia’s ambitions to become a regional 5G leader to become a reality,” added Gorman. – Dec 10, 2021
