Two ministries are not talking to each other. What a BIG joke!

Zafrul says MoF has been working with Communications Ministry on 5G roll-out amid claims the latter not consulted on DNB appointment

KUALA LUMPUR (Dec 10): Minister of Finance Tengku Datuk Seri Zafrul Aziz said his ministry has been working closely with the Ministry of Communications and Multimedia (KKMM) and its agencies to roll out the 5G network in the country.

Zafrul said this in a Facebook post to clear the air on a statement from deputy communications minister Datuk Zahidi Zainul Abidin, which said MoF did not consult KKMM on the appointment of Digital Nasional Bhd (DNB) as the implementing body for the 5G network roll-out via the Single Wholesale Network (SWN).

“The Cabinet during a meeting dated Feb 3, 2021, took note that a special purpose vehicle wholly-owned by the government will be appointed to roll out the sole 5G network infrastructure nationwide,” Zafrul said.

Zafrul also said that on May 31, 2021, KKMM issued a Ministerial Direction under the Communications and Multimedia Act 1998, touching on the preparation of 5G network and infrastructure, and that the Malaysian government had decided to accelerate its implementation.

KKMM, in its 2019 reports, projected that provision of 5G services collectively from the four leading network providers will cost more than RM30 billion, and around RM7.5 billion just to upgrade one 4G network, said Zafrul.

At the time, an attempt to set up a 5G consortium composed by telecommunication companies did not materialise due to differences in the interests of the telco players involved, he added.

Compared to the RM7.5 billion projection per 4G network, the current model should involve between RM3.5 billion to RM4 billion payment to DNB from each telco company in the next 10 years.

"This SPV will provide the capacity and access via wholesale to licensed telco companies. Returns to the SPV are based on a cost recovery model to ensure 5G service charges to users will be low,” he said.

Zafrul also pointed out that the SWN is regulated by the Malaysian Communications and Multimedia Commission (MCMC), while DNB’s licence forbids it from participating in the retail segment.

The minister reiterated that Ericsson (M) Sdn Bhd was appointed by DNB to undertake the project, following a tender conducted by EY that saw proposals from four companies. Ericsson was appointed as the Network Equipment Provider, as its costs were RM700 million less than the second lowest bidder, he added.

On Dec 10, KKMM’s Zahidi told the Dewan Rakyat that MoF did not discuss with his ministry about DNB’s appointment, and questioned the “magical” promise of lower costs to be incurred via the SWN.

The deputy minister also suggested that the MoF “wanted” to take on the telco portfolio, adding that KKMM had suggested to DNB to collaborate with existing industry players who have the experience and expertise to roll out such projects.

Zafrul previously said that the SWN model by DNB would result in 50% cheaper costs for telco companies to roll out the 5G network, and assured the public that the final charges to the consumers would also be lower than for the 4G network currently.