Back on Track for Wider Coverage: Malaysia's 5G Journey

Telecom Business Review | Thursday, October 27, 2022

The government-owned 5G agency, Digital Nasional Berhad (DNB), has finally reached an agreement with four mobile carriers in Malaysia, namely Celcom, Digi, YTL, and TM, to acquire 65 per cent of the company.

FREMONT, CA: 5G is far superior to 4G, although 6G may eventually displace it. This describes how technology evolves. Businesses that have invested in 4G want to make a profit before updating the technology. Lower-frequency spectrum, like that at 700 MHz, has a wider reach but moves more slowly. Very little coverage is provided by high-frequency spectrum (such that at 28GHz), but it is faster.

To provide service inside a room, they might need a small base station because high-frequency spectrum can scarcely pass through concrete walls. A spectrum with a medium frequency (like 3.5GHz) lies in the middle. The terrain, structures, and trees all have a significant role in determining the coverage area of any wireless system.

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When using the low-frequency spectrum, a region can be covered by a single tower or pole, while the high-frequency spectrum requires many towers or poles. Every pole or tower needs a power source. The cost of electricity for these operators will consequently skyrocket.

An essential component of the digital economy is 5G. A state-controlled 5G single wholesale network by Digital Nasional Berhad (DNB), owned by the Malaysian Ministry of Finance, was founded in March 2021 to deploy 5G infrastructure and extend 5G as a wholesale network to materialise 5G. The path to 5G has been challenging, though, since it's been challenging for all parties involved to agree on how the technology will be implemented across the nation.

The four major operators in Malaysia—Maxis, Celcom Axiata, U Mobile, and Digi—pushed for two wholesale networks earlier in this year's negotiations with the Malaysian Communication and Multimedia Commission (MCMC) over terms for the nation's wholesale 5G network.

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The operators together rejected the government's plan to acquire at least a 51 per cent interest in DNB, citing initial difficulties with 5G pricing for consumers and businesses. However, the government stuck to its original deadline of August 31. It considers a shared network will be more economical and speed up infrastructure construction. Contrarily, some market participants believe that this robs operators of the advantage of differentiating their services to compete.

All six of the nation's mobile operators eventually consented to the 5G deal after some early hesitancy, though Maxis and U Mobile later decided to reverse their positions. Although all six mobile operators have decided to proceed, the MCMC anticipates difficulties with state-level rollouts due to local authorities' excessive bureaucracy.

Malaysia's 5G rollout had reached 27 per cent by the second quarter. MCMC's Chief Operating Officer, Datuk Mohd Ali Hanafiah Mohd Yunus, remarked that there is still room for improvement when it comes to fulfilling the demands of local councils and states for resolving bureaucracy concerns, even though this shows the progress made in terms of 5G service coverage.

Even the 5G contract should be returned to MCMC, according to Deputy Minister of Communications and Multimedia Datuk Zahidi Zainul Abidin, because telecoms have not sided with the government. For telecoms to be told to install transmitters in appropriate areas, Zahidi also urged the general public to notify MCMC if a location had inadequate internet service.

“While DNB lacks the power to compel them or condemn them for not doing so,” said Zahidi. “They at MCMC can only ask them or implore them to place these transmitters to boost the strength of the transmitters.” To direct these telecoms to follow their orders because they have an Act to compel them to do so, they maintained urging the House to return the 5G rollout project to the MCMC.

By 2025, Malaysia will have 6.2 million IoT connections, nearly doubling from just 3.9 million connections in 2020, predicts IDC. As noted in the report by IDC, “IoT alone will create large IP traffic, which further underscores the need for additional backhaul capacity to serve both 5G cell sites as well as fixed aggregation at factories, stadiums, and various government and smart city locations.”

With plans to roll out 5G to other cities by the end of 2024, Malaysia is reportedly hoping to expand around 80 per cent of the 5G network coverage in populated cities by the end of this year, including Kuala Lumpur, Cyberjaya, and Putrajaya. MCMC defines populated areas as places where there are at least 20 individuals per square kilometre.

According to recent research by Opensignal, among 11 cities in the Asia Pacific, Kuala Lumpur has the second-highest 5G download speed, at 376.6 Mbps, trailing only Seoul, which has a 5G download speed of 453.1 Mbps. According to the survey, the reason for Kuala Lumpur's high rating is that DNB has a lighter 5G network load compared to other Asia-Pacific cities because YTL Communications' 5G is the first and only operator offering commercial 5G services in Kluang, Malaysia.

By 2025, Malaysia is anticipated to have 2.1 million 5G customers, or an estimated penetration of 6.6 5G subscribers per 100 persons, according to the Malaysian Investment Development Authority. It is anticipated that 5G will boost Malaysia's GDP by around RM5.3 billion.

According to Mohd Ali Hanafiah, the nation is on track for Phase 1, which runs from 2020 to 2025, with Phase 2 set for the end of 2022 to 2025. As 5G adoption rises, Malaysia hopes to outline plans for the public and commercial sectors to offer its citizens greater broadband quality and wider coverage.

The project's first phase will cost an estimated RM28 billion in investments. To close the digital divide, 60 per cent of the costs will be financed by the private sector, with the other 40 per cent coming from the government through the Universal Service Provision (USP) budget.

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