NEGOTIATIONS are on-going amid looming risks of further delays among mobile network operators (MNOs), Digital Nasional Bhd (DNB) and the Malaysian Communications and Multimedia Commission (MCMC) to reach an agreement by 1Q CY2022.
However, large MNOs are not in a rush to sign up for Digital Nasional’s 5G single wholesale network (SWN) as they prefer certainty on pricing and quality of service which in turn provide them with certainty in terms of service quality to their subscribers.
“While various concerns are being discussed between Digital Nasional and the MNOs, we gathered that Digital Nasional has been increasingly accommodating to the MNOs’ requests,” Kenanga Research analyst Lim Khai Xhiang pointed out in a telco sector update.
“While there’s hope that the relevant parties (MNOs, Digital Nasional and MCMC) could reach a common ground and sign agreements in 1Q CY2022, we remain cautious and believe there may be further delays.”
Compared to regional peers in Southeast Asia and East Asia, Kenanga Research deemed Malaysia as a laggard in the 5G roll-out with most regional economies having already launched 5G in 2019 and 2020.
“That said, YES and unifi mobile last week became the first two operators to sign on to Digital Nasional’s single wholesale network with YES now advertising its 5G package as Malaysia’s first,” observed the research house.
“Despite unifi and YES making the first move, the large MNOs (Celcom, DiGi, Maxis and Umobile) are not in a rush to jump onto Digital Nasional’s SWN.”
Contrary to its initial assumption that unifi and YES’ first move will start the clock ticking for the large MNOs, Kenanga Research said its recent channel checks found that MNOs do not feel pressured to sign up for the SWN model for two reasons:.
- Without quality of service (QoS) guarantee in a service level agreement, MNOs are concerned that potentially poor 5G connections at the start (from SWN’s network) could fall short of telcos’ QoS promises.
- Poor coverage in the initial phase of the network poses a risk to the MNOs’ reputation, especially on QoS as they are careful to not charge subscribers for service on a network over which they have little control.
Above all else, Kenanga Research also expects 5G adoption in Malaysia to “likely be slow” for two reasons:
- Only circa 10% of total mobile subscribers use unifi mobile and YES with little incentive for other users to switch over given users’ expectations of patchy 5G connections. Hence, there is likely minimal churn in the coming months if unifi mobile and YES remain as the only two operators with 5G services.
- Certain smartphones, namely the popular Apple iPhones are not yet compatible with Digital Nasional’s 5G network as there needs to be device certification and software update from the device manufacturers to enable connection to Digital Nasional’s 5G network. – Dec 24, 2021
