Malaysia's Maxis set to sign up to national 5G wholesale plan

Maxis Communications, Malaysia's second biggest cellco, has finally decided to join the national wholesale 5G network.

In a statement to the stock exchange, it said it would seek shareholder approval for a 10-year deal with the government-backed wholesale operator Digital Nasional Berhad (DNB). It is the fifth and final mobile operator to sign up to the contentious single-network plan, which local telcos had resisted on grounds of access price and the limitations on their ability to compete.

Maxis said it expected to incur 360 million Malaysian ringgit (US$79 million) in annual operating costs for access to the DNB network.

It has reserved the right to terminate its agreement with DNB if the government licenses a second 5G wholesaler or another operator is permitted to repurpose its spectrum for 5G.

That seems likely. In the face of operator opposition, the government earlier this year said it would allow a second operator once the DNB network had reached 80% coverage of populated areas. DNB is expected to cross that threshold by the end of the year.

However, the government has not yet spelled out how and when the second network operator would be introduced, so the transition period to the dual network model could take some time.

No alternative to DNB

Explaining the decision, Maxis said access to the DNB network was in the company's best interest because currently there is no alternative 5G provider. It said 5G was critical in order to remain competitive in the Malaysian telecom market, adding that the company had a good track record of offering converged mobile and fiber services.

If shareholders approve the proposal, Maxis expects it would be able to go to market quickly with its commercial 5G offerings.

Its endorsement of the national 5G network is a win for the DNB and also for the Anwar government that came to power last November.

The compromise that allows a future 5G player into the market while still retaining a role for the DNB has ensured that all operators are committed to buying connectivity from the government-backed operator. Maxis's rivals Telecom Malaysia, CelcomDigi, YTL Communications and U Mobile have already struck access agreements with DNB.

Maxis shares closed 1% higher in Monday trading in the wake of the DNB decision.

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— Robert Clark, contributing editor, special to Light Reading