The planned 5G rollout in Malaysia has overcome its most recent challenge. Despite their reservations, the four major telecommunications companies (telcos) have agreed to move forward with the government’s plan for a single wholesale network (SWN) to supply all the industry players. Before reaching an agreement with the Malaysian government, the companies—Celcom Axiata Berhad (Bhd), DiGi Telecommunications, Maxis Bhd, and U Mobile Sdn Bhd—had initially rejected a wholesale pricing agreement. 

The majority of disagreements between the telcos and the government revolved around money, a lack of process transparency, and the fear of a monopoly. Yet, they all agreed on the importance of having 5G in Malaysia. 5G technology promises to bring faster internet speeds, greater network bandwidth, and low latency—query delays on a network—all of which will boost startups, save them money, and enable them to surf the web and collaborate in real-time.

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5G in Malaysia: Challenges and obstacles

Ericsson, a Swedish-based Information and Communication Technology (ICT) company built Malaysia’s 5G network after defeating Chinese firm Huawei. Given that the country is friendly with China, awarding them the contract was dubbed a contentious decision. Ericsson, on the other hand, defended itself, highlighting that it emerged first in 5G technical capabilities, project financing, and socioeconomic factors.

According to Reuters, the completed 5G network became a point of debate after Digital Nasional Berhad (DNB), the state agency in charge of 5G, announced that it would only offer a single wholesale network rather than providing carriers with a spectrum. Telcos, on the other hand, wanted a second 5G network to be made available in order to prevent the state agency from becoming a monopoly, boost competition in the industry, and keep prices from skyrocketing.

According to GSMA Intelligence, failing to assign spectrums and opting for the SWN route deprived carriers of competitive advantage by limiting their ability to differentiate their services from others. The Malaysian government believed that a shared network would be less expensive and would accelerate infrastructure development, but the telcos demanded a better deal.

Government initiatives and partnerships

According to Reuters, a solution has been found, as the Malaysian government intends to give up a 70% equity stake in DNB to the four telcos while retaining 30%. The government is also sticking to the SWN plan in order to ensure better control over the process and accelerate the development of the 5G infrastructure. The telcos applauded the government’s decision and stated that they were now ready to work on further details of the deal.

DNB also decided to extend the pilot programme that provided carriers with free 5G services. It was supposed to end in April, but it has been extended until the end of June. The deal was accepted by Telekom Malaysia Bhd and YTL Communications. They are now offering 5G services to customers in Cyberjaya, Kuala Lumpur, and Putrajaya.

The government and Ericsson have maintained their partnership, with the company providing the Network Operations Centre (NOC) to monitor, support, and manage the 5G network.

Impact on the tech startup ecosystem

By 2025, Malaysia should have about an 18% share of 5G mobile connections, and the smartphone penetration rate as a share of the population will stand at 89.48%. The continued adoption of technology sets the nation on the right track for future success. It encourages the formation of tech startups to address the country’s various challenges.

Deploying 5G will ensure startup affordability, accessibility, and cybersecurity, allowing them to thrive. Furthermore, collaboration at various levels is required to boost ecosystems and innovation. According to the Business Technology Report 2021, Malaysia was eager to adopt new technologies, with 95.9% of the public using new digital payment services. Employers did not shy away from incorporating cloud technology and video conferencing software into their companies. When using a 5G-capable device, these moves will be faster and more affordable.

The country’s skilled digital tech talent shortage is attributed to a lack of adequate 5G infrastructure. 5G adoption will necessitate tech-savvy employees and CEOs guiding startups through the process of integrating the new technology into their businesses. Regardless, the addition of 5G ensures Malaysia’s ability to keep up with regional Southeast Asian nations and gives the country a competitive edge globally.

The collaboration between the government and the top telcos will help in the establishment and maintenance of 5G in Malaysia. The new technology has the potential to drastically change how Malaysians live their daily lives and conduct their businesses. 5G will enable companies to innovate new solutions in a variety of industries by bringing faster browsing speeds and device connections.

Even though the 5G rollout in Malaysia did not go as planned, what is important is that the major players—the government, the telcos, and other stakeholders—are working together to make 5G use a reality in the country.