KUALA LUMPUR: Malaysia's telecommunications industry has seen quite an eventful year in 2024 as the country progresses toward deploying its second 5G network.
This comes on the heels of achieving over 80 per cent coverage of populated areas (CoPA).
As of the end of October, the country’s 5G coverage of populated areas reached 82.1 per cent, an increase from 80.2 per cent the previous year, reflecting the focused efforts of Digital Nasional Bhd (DNB).
Meanwhile, internet coverage in populated areas improved to 98.38 per cent, up from 97.07 per cent in 2023.
While there is exciting news and positive developments surrounding the second 5G network, the telecommunications industry as a whole appears to have moved at a slower pace this year.
GlobalData Technology principal analyst Alfie Amir observed that overall, the progress of Malaysia's telecommunications sector has been relatively slow compared to other markets, including its neighbouring countries.
Prime Minister Datuk Seri Anwar Ibrahim had recently expressed his frustration with the second 5G network delays.
Second 5G network to U Mobile
On Nov 1, the government, via the Malaysian Communications and Multimedia Commission (MCMC), finally announced that the second 5G network in Malaysia will be implemented by U Mobile Sdn Bhd.
This decision followed a detailed technical and commercial evaluation to select the mobile network operator (MNO) for the project.
Commenting on the decision, Communications Minister Fahmi Fadzil explained that the selection of the second 5G network provider was based on various factors, including the MNO’s business and technical plans, customer satisfaction and complaint records, and performance in executing other infrastructure projects.
This also included contributions to the Universal Service Provision (USP) projects, such as JENDELA Phase One and the 4G upgrade initiative, which align with MCMC’s commitment to improving user experience and service quality.
Meanwhile, Alfie posited that the selection of U Mobile for the second network operator is unlikely to significantly impact the overall telecom (telecommunications) market in Malaysia, as other operators are already offering 5G services via the first network.
"For U Mobile, deploying its own 5G infrastructure offers several benefits, including greater control over infrastructure, partnerships, innovation labs, coverage, 5G features, and integration with existing systems.
"This could enable the company to gain a competitive edge in both enterprise and consumer segments," he said.
However, he said deploying 5G is a capital expenditure (capex)-intensive process, which could strain U Mobile's financials, especially as the company is not particularly strong in the enterprise and industrial segments.
Frankly, DNB still leads the 5G landscape
In April, DNB appointed five new board members comprising senior leaders from the telecommunications and technology industries.
This followed the share subscription agreements (SSAs) signed between DNB, the Ministry of Finance Incorporated, and five MNOs on Dec 1, 2023.
The new board members include Datuk Kamal Khalid (CelcomDigi’s Infranation Sdn Bhd), Uthaya Kumar K Vivekananda (Maxis Broadband Sdn Bhd), Chang Yit Fei and Tan Kok Leong (U Mobile Sdn Bhd), Nik Azli Abu Zahar and Mohamed Tajul Mohamed Sultan (Telekom Malaysia Bhd
), and Datuk Seri Yeoh Seok Hong and Datuk Dr Fadhlullah Suhaimi Abdul Malek (YTL Power International Bhd).
In June, DNB announced the completion of SSAs with four MNOs -- CelcomDigi Bhd (via Infranation Sdn Bhd), Maxis Broadband Sdn Bhd, U Mobile Sdn Bhd, and YTL Communications Sdn Bhd (via YTL Power International Bhd).
However, in August, DNB terminated its SSA with Telekom Malaysia Bhd (TM) after TM’s request and appeal for an extension of the "conditions precedent longstop date" were rejected.
The longstop date for TM was August 21, 2024, to obtain shareholder approval as per its governance requirements, but it failed to adhere to the timeline.
Outlook for 2025
Looking ahead, Alfie opined that despite growing competition, telecom operators will likely explore opportunities in the enterprise segment to drive top-line revenue.
"Telecom operators should move from development to deployment stages, leveraging infrastructure to offer network-based solutions rather than diversifying into non-network services,” he said.
Operators are also expected to slow down their transformation efforts and focus on network-based solutions instead of pursuing broader information technology (IT) provider roles.
"In addition, the 5G landscape and innovation in Malaysia will remain complex. While the dual wholesale network model has benefits, innovation and service differentiation will continue to challenge telecom operators.
"This includes network slicing capabilities for private 5G, coverage differentiation, network automation, artificial intelligence, and environmental, social and governance considerations," he added. - Bernama
