International

Malaysia 5G: Wholesale network proposals unlikely to be favoured

Published Tue, Oct 22, 2019 · 08:33 AM

MALAYSIA'S telecoms regulator is unlikely to support a government-led rollout of a wholesale mobile network, although it will be keen for operators to pursue network sharing agreements, said Fitch Solutions Macro Research said in a October 22 note.

It added that while Malaysia will be one of the first few South-east Asian markets to launch 5G, it is of the view that any network commercialisation for mobile services will likely take place in 2021 or 2022, even as the Malaysian government is pushing for service launches in 2020.

Fitch Solutions cited several reasons for this:

1. Consumer appetite for 5G services is currently low, with the mobile market skewed toward low-value prepaid services which adequately services their social media and over-the-top video streaming requirements

2. The regulator has yet to allocate 5G-suitable spectrum and licenses are only set to be allocated to operators in the latter half of 2020

3. Operators will want to monetise their 4G networks further through upgrading legacy subscribes to LTE. According to Fitch Solutions's estimates, 2G and 3G penetration in Malaysia is still considerable at 8.8 per cent and 26.2 per cent respectively as of Q2 2019.

The Malaysian Communications and Multimedia Commission's (MCMC) has made several moves to democratise the market and make services more affordable to consumers, mainly through its Mandatory Standard Access Pricing directives.

This however does not rule out the potential for network sharing arrangements, something which operators will likely be keen to pursue.

It added that the new Malaysian government's openly-stated receptiveness toward Chinese companies Huawei and ZTE will be positive for operators in planning their 5G roadmaps.

Huawei announced an agreement with Maxis to build out the latter's 5G networks earlier this month. It also stated that it has also signed memoranda of understanding (MOUs) with Celcom and TM. Smaller player U Mobile has an MOU with counterpart ZTE.