Malaysia's 5G deadlocked again as talks with DNB break down

Malaysia's national 5G plan has once again stalled, with talks on investment and industry structure going nowhere.

Operators have been negotiating with the government-backed DNB for four months, but have made no progress toward agreeing on any investment in the wholesaler, Singapore-based Channel News Asia (CNA) has reported.

The parties are stuck on basic issues, such as the multiple audits into DNB that were due to be completed in January, and the appointment of directors to represent telcos on the DNB board.

An official from the Finance Ministry, the government agency behind the DNB, told CNA that "nothing is moving because telcos are starting to have doubts on the path forward."

The operators had been unhappy with the single 5G wholesale network scheme since it was introduced. A year ago the government finally agreed to allow a second network once the DNB network had passed 80% population coverage.

Negotiations on whether the five MNOs – Maxis, Telekom Malaysia, CelcomDigi, UMobile and YTL – should invest in DNB or the second network began after DNB passed its coverage target in December.

'A quiet rethink'

Ironically it appears that after several years of opposing the single network, operators seem to be having a change of heart.

CNA quoted a board member of state-controlled Telekom Malaysia saying 5G is in a holding pattern "because there is a quiet rethink whether having a second network is the way forward."

A Maxis executive was quoted as making similar remarks. Both TM and Maxis have since claimed the comments do not reflect the company positions.

Even if the economics do add up, the negotiations are hampered by the lack of trust between the operators and DNB over the state-owned company's apparent lack of transparency.

DNB will allow only the board’s directors access to the due diligence. The findings are to remain confidential and not be shared with the MNOs.

Its tendering for the 5G network – won by Ericsson – and for a cloud platform and other IT services has attracted some industry criticism, although a government probe into the 5G deal found no issues.

In a statement, DNB denied any lack of transparency in its procurement and internal operations. But it said it could not comment on the specifics of the discussions with operators for confidentiality reasons.

Communications Minister Fahmi Fadzil said he expected to make "several significant and major announcements" regarding the 5G network in late April or early May, the official Bernama news agency reported Sunday.

DNB's 5G network now accounts for nearly 30% of all Malaysian mobile subscriptions. Ookla currently rates it the best 5G network in southeast Asia and the highest in the world for consistent performance.