Now, Malaysian MP Ong Kian Ming turns attention to telco CEOs, seeking 5G clarity with 9 questions

• Questions to Celcom Axiata, Digi, Maxis, UMobile and YES, but not Unifi Mobile
• Sees value of SWN model led by govt entity that would push for speedier deployment

[Ed Note: Encouraged by the comprehensive replies his earlier 13 questions to Digital Nasional Bhd over Malaysia’s 5G approach, elicited, the Member of Parliament now is asking telco chiefs, directly to clearly explain their stand. The telcos have been using proxies to wage their battle against the government’s 5G approach so far.

Note Ong left out Telekom Malaysia’s Unifi Mobile as it is considered the smallest of the 6 main mobile operators with around 2.3 million subscribers.]

Open Letter to the Chairmen and CEOs of MAXIS, CELCOM (AXIATA), DIGI, UMOBILE & YES (YTL COMMUNICATIONS) on the 5G rollout in Malaysia.

Dear leaders of the Mobile Network Operators (MNOs) in Malaysia,

No doubt most of you would have read the very comprehensive reply by the CEO of Digital Nasional Berhad (DNB), Ralph Marshall, to my list of 15 questions on the 5G rollout in Malaysia that was released over the weekend. Having gone through Mr Marshall’s reply, I want to take the opportunity to raise a list of questions on the 5G rollout to the MNOs so that the industry as a whole as well as individual players can have the opportunity to publicly address areas of concern. My questions are the following:

1) The CEO of DNB as well as the Minister of Finance, Tengku Zafrul, have publicly stated that the MNOs failed to coordinate among themselves to come up with a workable ownership structure for a consortium-led Single Wholesale Network (SWN) for the 5G rollout. Is this an accurate depiction of the chronology behind the discussion to establish a consortium-led SWN entity and the subsequent establishment of DNB which would take up 100% ownership and responsibility of the 5G rollout?

2) The argument which DNB and the MOF makes is very convincing from an economics standpoint which is that it is much more cost effective for a single entity to rollout 5G given the high infrastructure costs involved. It would make much more sense, argues DNB and MOF, for there to be one multi-lane highway built for the purposes of 5G rollout where different lanes can be shared by the MNOs at a lower cost compared to each MNO building and owning their own highways. Some industry experts seem to agree with the arguments made by DNB and MOF. What is the industry’s response to this argument?

3) The CEO of DNB uses the example of how it took the MNOs 8 years to 94% coverage for 4G (with many rural areas still not having access to 4G) to illustrate the possibility that the 5G rollout will also be similarly delayed because of the “demand” led model used by the industry. At the same time, the use of the Universal Service Provider (USP) fund to rollout telco coverage to the rural areas has also experienced many delays. How would the MNOs respond to the statement that they would want to delay the 5G rollout in order to “sweat” value from their current and future 4G assets?

4) As a public policy maker that is interested in narrowing the urban-rural divide and as a former Deputy Minister for International Trade and Industry (MITI), I can see the attractiveness of a SWN model led by a government entity that would push for speedier deployment of 5G into the semi-urban and rural areas despite the initial lack of demand. The rapid deployment of 5G, coupled with the existing plans to rollout 4G in a complimentary manner by the MNOs will provide the impetus for jobs and investments to flow to lower cost semi-urban and rural areas in different parts of the country which would lead to an increased demand for 5G coverage and services. Would the industry players agree with this point of view?

5) The CEO of DNB has stated that the “Reference Access Offer” (RAO) that will be given to the MNOs for access to the 5G SWN network will be “very transparent” covering pricing, terms and conditions and the catalogue of other services being provided. What kind of transparency and flexibility are the MNOs asking for in terms of the pricing and access structure of this RAO? For example, would the industry want to have some element of review for the pricing structure every X number of years? Would some industry players want to have the option of delaying or limiting their take up of the 5G spectrum and bandwidth until 5G demand is sufficiently profitable?

6) One of the key arguments put forth by DNB is that the MNOs should focus on competing based on service offerings rather than the speed and connectivity of their network under 5G as data and data access are increasingly being commoditised. From my own understanding, there has been little innovation especially in terms of value-added services for the SMEs and the manufacturing sector. If the MNOs are freed up from having to focus on the 5G rollout and are “forced” to compete based on service offerings, wouldn’t this lead to a more innovative mobile telco landscape, for businesses as well as individual consumers?

7) Last year, DNB claimed that it would have 500 5G enabled sites by the end of 2021 for “delivery” to the MNOs as proof that it can deliver on its promise of a speedy 5G rollout plan. At the same time, DNB’s CEO points to the regularly reporting and updating on the progress of its 5G rollout plan on its website.5 Is the industry satisfied with the progress which DNB has made with regards to the rollout of 5G infrastructure? Are there any areas of possible concern which policy makers should know about vis-à-vis the current deployment of the 5G network thus far under DNB?

8) Does the industry see any upsides in having DNB rollout the 5G network initially and giving an option for MNOs to buy stakes in DNB after a significant portion of the 5G network has been rolled out, let’s say by 2024? Would this lessen the concerns on the part of the MNOs that DNB would “abuse” its position as a monopoly and put unreasonable charges on the industry players for access to the 5G network?

9) Would DNB be more “acceptable” to the MNOs if it had more autonomy and a more “arm’s length” relationship with the Government of Malaysia to avoid possible conflicts of interest within the GoM, as recommended in this 5G evaluation report by DT Economics?

10) Would the MNOs prefer a Dual Wholesale Model (DWN) compared to the current SWN model with another entity building and rolling out another 5G network? If so, what would be the proposed ownership structure and responsibilities of this DWN model? For example, would a consortium-led entity be allowed to complement / compete against DNB for the 5G rollout or would the ownership structure of DNB be changed so that there are TWO non-government entities given the responsibility of rolling out 5G in Malaysa?

Dr. Ong Kian Ming, Member of Parliament for Bangi and Assistant Political Education Director for the Democratic Action Party (DAP)