Former Bangi MP and former Deputy Minister for International Trade and Industry (MITI), Dr Ong Kian Ming, has called upon the government including the Malaysian Communications Multimedia Commission (MCMC), the Communications Minister and the Digital Minister, to disclose more details on how U Mobile was selected to build Malaysia’s second 5G network. He released a statement with several questions which touched on the terms of the tender process as well as the scoring method to determine the winner for the second 5G network which will compete with Digital Nasional Berhad (DNB).
Malaysia’s recent announcement that U Mobile is the winner of the second 5G network tender has raised concerns, especially when it has fewer sites and subscribers and lower revenue compared to other contenders.
Will MCMC disclose terms and conditions of second 5G network tender?
In his statement, he asked if the MCMC are willing to publicly disclose the terms of the tender for the second 5G network that was issued to the MNOs via the Applicant Information Package (AIP). He said this was necessary to enable industry experts, policy makers and members of the public to properly evaluate the terms and conditions of the “beauty contest”.
He also asked the MCMC if they were willing to disclose their “scoring method,” under which U Mobile was judged to have provided the best bid for the second 5G network. He said the scoring method should include evaluations of detailed business plans covering network design, rollout and planned coverage, service requirements, enterprise and industry development and finance and funding.
The former MP also asked if the MCMC had provided copies of the tender/AIP documents and specifications to the Ministry of Digital and the Ministry of Finance for their perusal to evaluate the possible impact of the second 5G network on the operational and financial sustainability of DNB.
He also requests if the MCMC could disclose the KPI that U Mobile has to meet as part of its second 5G network rollout as DNB was given the target to achieve 80% 5G population coverage by 2024 (eventually expedited to the end of 2023).
Dr Ong also queried the regulator on why U Mobile was given the option to work with other telcos for the rollout of the second 5G network. He asked if this was part of U Mobile’s second 5G network proposal and if was this an indication of financial constraints faced by the telco in terms of financial expenditure needed for the second 5G rollout.
Was U Mobile required to reduce foreign shareholding to 20%?
Communications Minister Fahmi Fadzil elaborated MCMC’s explanation of why U Mobile was picked for the second 5G network during Parliament yesterday. Addressing concerns that U Mobile is half-owned by Singapore’s Straits Mobile Investment Pte Ltd, he said no shareholding conditions were breached by the telco. He also emphasised that he was not involved in the evaluation process of the second 5G network which was conducted independently by the MCMC.
Dr. Ong asks Fahmi if his ministry will organise a briefing session for government backbenchers and opposition MPs on why U Mobile was chosen to implement the second 5G network and also show the detailed proposal by the telco with regards to its 5G rollout plan and financial proposal.
He also wants Fahmi to explain the need for U Mobile to reduce its foreign shareholding from 48.3% to 20%, and whether this was a requirement as part of their appointment for the second 5G network.
How does the government ensure DNB can operate sustainably?
In his questions to Digital Minister Gobind Singh, he highlighted there were recent complaints about DNB’s 5G services as more subscribers started to migrate to the 5G network. He asked the Digital Minister how his ministry and MCMC ensure that DNB’s operational performance can be maintained with just 100MHz of 3.5GHz spectrum.
On top of that, he also asked if there are plans for DNB to be transformed into a fully 100% MNO-owned entity so that it can compete fairly with U Mobile once the second 5G network has covered enough areas. He further asked how would the approach impact 5G deployment for enterprise solutions as well as increasing coverage in rural areas.
The DAP MP also posed several questions to Finance Ministers Anwar Ibrahim and Amir Hamzah Azizan on how the government will ensure that the rollout of the second 5G network will not impact the financial sustainability of DNB if one or more telcos decide to leave DNB to support U Mobile’s new 5G network. He also wants to know if the government will have to “write-off” some of DNB’s existing debts as part of the condition of selling DNB fully to one or more of the MNOs.
He emphasised that without a clear and coherent policy on the part of the relevant ministries and the regulator, the gains Malaysia have made in the 5G space can easily be lost.
At the moment, four telcos – CelcomDigi, Maxis, U Mobile and YTL, cumulatively own 65% of DNB, and the remaining 35% is owned by the government via MoF Inc along with a special share. As part of the transition from a Single Wholesale Network to Dual Network, the telco appointed for the second network will have to divest is interest in DNB to focus on establishing the second network.
On Wednesday, MCMC explained why U Mobile was picked for the second 5G network. The regulator said the winner was decided while considering multiple factors which include business and technical plans, consumer complaints and satisfaction records, and its performance in carrying out other infrastructure initiatives.
However, the statement left many critical questions unanswered. CelcomDigi and Maxis were seen as the forerunners in the second 5G network race as they have more sites, more subscribers and higher revenue compared to U Mobile.
Both CelcomDigi and Maxis have iterated that they have presented a comprehensive proposal for the second 5G network bid, and could have rolled out 5G quicker than DNB using their existing 5G-ready infrastructure.
