Dual 5G Networks – Still Far from Ideal but Way Better than SWN to Drive 5G Development in Malaysia

A. Amir

Summary Bullets:

• The details are still unclear, but the Malaysian government’s announcement on dual 5G networks is a positive move that can accelerate 5G developments in the country.

• Telcos should start collaborating and get more involved in the second 5G network for greater control of the infrastructure.

The Malaysian Communications and Digital Ministry recently announced that 5G rollout in the country will move to the second phase, in which Malaysia will have a dual network model upon reaching a population coverage of 80% of the first network. Having dual wholesale networks is still far from ideal compared to separate deployments by the telcos. However, it is a very positive move from the single wholesale network (SWN – for more on SWN, please see “Malaysia 5G Through SPV: One Step Forward and Two Steps Back,” March 8, 2021) as it will provide wider options for telcos/service providers and enable them to differentiate. It can also drive 5G development and accelerate innovations in creating new applications and use cases. All major local telcos (e.g., CelcomDigi, Maxis, and Telekom Malaysia) have already voiced their support for the dual networks while the largest player, CelcomDigi, has announced it will withdraw its equity participation with Digital Nasional Berhad (DNB – i.e., the current SWN provider).

Enable Telcos to Differentiate: Under the SWN model, every telco will offer the same coverage, capacity, and 5G features. It limits telcos from offering differentiated 5G network services. With a dual network model, each will have different strengths. This gives telcos wider options to differentiate their 5G services against competitors. For example, a telco could use both 5G networks and differentiate with coverage, while another telco could use the second 5G network, which may offer features that DNB doesn’t support.

Drive 5G Development: Based on the GlobalData Competitive Landscape Assessment research, while Ericsson has very strong capabilities in 5G, other vendors such as Huawei and Nokia are stronger in some technical aspects and roadmaps. The competition between the two networks will drive the development of 5G networks in Malaysia. For example, if one network enables a new feature such as network slicing or multi-access edge computing (MEC), the other network will likely follow to close the gap and stay competitive.

Drive Innovations: Faster 5G development can drive 5G innovations. For example, features such as MEC and network slicing can enable new industrial enterprise use cases such as autonomous vehicles, robots, dense IoT applications, smart factories, mixed reality, and wearables for high-risk workers. Today, there is a lack of initiatives in co-developing enterprise 5G applications in the country due to collaboration challenges in the wholesale network as well as capabilities offered by the DNB 5G network. In contrast, other countries are already a few steps ahead in enterprise 5G with commercial launches of enterprise 5G solutions and various collaborations across multiple industries.

Drive Adoption: The announcement on the second network is already gaining support from local telcos. Having the second network can also attract more players (not only the traditional telcos and MVNOs, but also new players such as system integrators and IT providers). This will drive the competition, for example, through a wider range services, innovations, and industry collaborations, hence drive 5G adoption in the country across both the mass market and enterprise segments. With the current SWN, the 5G user segment is estimated to grow to 23.6 million, accounting for 46% of the total mobile subscribers. The dual network is expected to further drive 5G adoption, closer to the APAC average of 61% (for more information, please see: the GlobalData Telecom Market Visualiser, last viewed May 2023).

What’s Next: While the details of the second 5G network are still unclear, telcos should start collaborating and should consider building a consortium to co-deploy network. Network sharing can accelerate deployment at lower costs through resource sharing (e.g., towers, sites, backhauls), but it will also provide them with more control of the network than only owning equity in DNB, and hence enable them to expand their enterprise 5G initiatives such as private 5G, MEC, and network slicing.

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