STICKY OPTIONS
Mr Anwar, who had campaigned as opposition leader against the establishment of a single wholesale network, quickly registered after taking over as premier last year that he was open to dismantling DNB’s monopoly over the 5G space because countries that adopted the monopoly network faced a number of problems.
GSMA, a global organisation often referred to as the mobile industry’s own think-tank, has weighed in on the Malaysian 5G debate in the past and noted that countries that opted for the single network model have seen the 5G sector beset by rollout delays and low mobile broadband penetration.
Among them are countries such as Belarus and Rwanda, where the state-controlled entities allocated the 5g spectrum have been saddled with huge losses.
But for Malaysia, finding a compromise plan proved difficult because the options that were being considered proved sticky.
Both sides also mulled over a plan to disband the DNB 5G company and carry out an fresh auction process of the spectrum, a move that would have potentially created a crowded field.
Another proposal was the outright sale of DNB to local telco players and foreign investors, with the state retaining a golden share to give it veto rights over the company.
But the negotiations stumbled because of pricing issues and the failure on both sides to reach an agreement on management control of the state-owned monopoly after an equity restructuring exercise.
Proponents of the DNB plan have also long cited security concerns of embracing Huawei, which has seen its technological products banned in several western countries over concerns that the Chinese government could exploit security gaps to spy on foreign governments.
But the current government sees China as a vital economic and technological partner.
Many industry executives noted that amid all the wrangling, Mr Anwar had ordered all parties two months ago to work out a compromise plan that would pave the way for the establishment of a second operator in the 5G space.
NEXT PHASE CRUCIAL
Now that the Anwar government has convinced the telco players and DNB to find common ground, the next critical phase would be how industry players form partnerships that will either opt for taking over the current state-owned monopoly or choosing to be involved in setting up a new network.
As it currently stands, industry executives noted that the government would prefer for the newly merged CelcomDigi to lead the consortium that will pursue the takeover of DNB, while allowing Maxis, the most dominant mobile operator, to team up with U Mobile and proceed with the establishment of a new network.
Maxis and U Mobile are already major technology customers of China’s Huawei and their existing network could be upgraded to meet 5G specifications at a lower cost.
“This phase of the deal is going to be crucial because telcos would naturally prefer to be in the consortium rolling out a new system, which means the government will have to find a way to make taking over DNB an attractive proposition,” said a director of a Malaysian telco company, who has been briefed about developments in the compromise plan and prefers not to be named.