Government to maintain SWN model for 5G rollout, offer 70% stake in DNB to other telcos

PUTRAJAYA (March 16): Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz said on Wednesday (March 16) the Malaysian government via Digital Nasional Bhd (DNB) will maintain the single wholesale network (SWN) model in the country’s planned rollout of the fifth generation (5G) mobile telecommunication network and at the same time, offer 70%-ownership in DNB to mobile network operators (MNOs) in the country in a move which demonstrates the government’s firm stance on policy continuity.

“(DNB) Equity stake offering to be completed by end of June (2022), brought forward from 2024 to encourage public private partnership in 5G rollout,” Tengku Zafrul said.

“After considering several different models for the national 5G network infrastructure, the government has decided to maintain the implementation of being supply-driven and based on cost recovery through the SWN,” he said.

Govt targets 80% national coverage in three years: Annuar

Also present was Communications and Multimedia Minister Datuk Seri Annuar Musa, who said the decision was made following a series of engagements with the stakeholders, including parliamentarians.

Annuar said some of the factors behind the decision included the need to achieve 80% national coverage for 5G within the span of three years.

He also said the rollout must be expedited to ensure the country remains competitive with its regional neighbours as it was a necessity for future investors.

“I wish to explain that the view that DNB is monopolising (the rollout) is no longer raised as the government is giving the opportunity for 70% ownership of DNB shares to be bought by the (MNO) companies,” Annuar said.

“This makes DNB a joint-effort between the government and the private sector.”

Annuar said the government had initially wanted to offer MNO’s opportunity to buy stakes in DNB by 2024, but the process would be expedited. He added that the process could begin as early as June this year.

The telcos had opposed the proposed SWN model, citing concerns over competition, innovation, and monopolisation, leading to them forming a consortium that wants to operate a secondary 5G network.

However, Annuar said the government’s current decision on SWN with stakes for MNOs was well-received by the telcos.

The announcement today marks the end of the months-long impasse on whether DNB will set up the nation’s 5G infrastructure, or whether the country will see a dual wholesale network (DWN) proposed by the telcos.

On February 18, Celcom, Digi, Maxis and U Mobile issued a joint statement saying they were ready to invest and see the DWN model as a “feasible option” that leverages the capabilities of mobile network operators (MNOs) and their existing resources.

In December, service providers YES and Unifi Mobile took up DNB’s offer for 5G services as part of a pilot project in Kuala Lumpur, Cyberjaya, and Putrajaya, which began in mid-December.

Annuar said that under the SWN model, Malaysia’s 5G spectrum will be allocated exclusively to the government’s wholly-owned company Digital Nasional.

He said telecommunication companies will subsequently enter into commercial negotiations with Digital Nasional on further allocation of the 5G spectrum.

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