Eye on the ball, MCMC swings for the fences with 5G
By Karamjit Singh January 13, 2020
- Average annual salary from executing 5G well will be around US$33,580 in 2025
- Malaysia aiming to be a Top 10 globally-ranked 5G nation, tops in Asean
DESPITE the concern of some that Malaysia seems to be too enamored over 5G, the next generation of mobile technology that promises remote surgery, autonomous vehicles and the internet of everything, it is clear that the Malaysian government is all in and swinging for the fences in its single infrastructure consortium approach to 5G with a 3Q20 launch of commercial services targeting businesses.
And in his first media briefing after the Malaysian Communications and Multimedia Commission (MCMC) issued its Dec 31, 2019 Final Report on the Allocation of Spectrum Bands for Mobile Broadband Service in Malaysia, MCMC chairman Al-Ishsal Ishak again reinforced the economic imperative for getting the country’s 5G approach right.
Not content with just speaking about the GDP boost that every 10% increase in fixed broadband generates and reminding the media about how poorly Malaysia ranked in fixed and mobile broadband speeds, Al-Ishsal shared some specific Malaysian-centred research on the impact 5G could generate for the country and its citizens.
The telco regulator had commissioned the Malaysian Institute of Economic Research (MIER) last October to run a study on the macroeconomic impact of having a robust 5G network. The full results will be revealed in Langkawi during the international 5G conference that is part of the big 5G love fest from Jan 19 to 21, which includes the sharing of results of all the 35 5G Demonstration Projects in Langkawi, the Langkawi Trials as the GSMA calls it.
Sharing a key data point (see chart below), the MIER study reveals a RM12.5 billion economic impact to GDP from 5G-related activities, from 2021 to 2025. Even more interesting is that the average annual salary of the estimated 40,000 jobs to be created over the five-year period is to jump from around US$28,190 (RM115,000) a year in 2021 to around US$33,580 (RM137,000) in 2025.
Aside from jobs, the MCMC sees an even bigger impact on businesses that have to go digital to remain relevant and competitive, especially the small and medium enterprises (SMEs). “SMEs are going digital and need high quality networks. If MCMC and the government do not prepare the country for good, high quality, widely available and reliable networks, then the impact on the national economy can be grave,” he warns.
“This is a very important point I want everyone to understand so they can appreciate why we are taking this journey and driving as hard as we can, as fast as we can to prepare the country,” he says, making no bones nor offering any apologies about the speed at which 5G developments are moving.
After all, allowing the telcos to go their own way in terms of 3G and 4G rollouts has only left Malaysia chasing the pack as a middling-ranked country in terms of connectivity and quality of networks. The government is determined not to let that happen again with 5G as poor quality or haphazard 5G rollouts could cripple the country’s competitiveness when digital is going to be the backbone of the economy.
On the question of Malaysia getting distracted by the hype around 5G, Al-Ishsal emphasises that after speaking to network vendors and the 5G Taskforce, “we have concluded that from the time of the Public Inquiry on June 30 to Dec 31 when we had published the final decision, that the 5G ecosystem and its readiness has evolved way faster than was anticipated.”
“Do we really want to take our time till the technology is mature before adopting it? Do we want to fall further behind?” he demanded.
Conversely, the MCMC is also displaying a high level of prudence, while racing ahead to get 5G launched. The single infrastructure consortium approach ensures that even if the entire 5G cycle fails to deliver on its promise, money has not been drained with multiple 5G networks being built with costly services passed on to consumers.
How can Malaysia be No1 in SEA?
Al-Ishsal also shared something that was not made public before. While Communications and Multimedia Minister Gobind Singh Deo likes to urge for Malaysia to lead, he apparently got more specific with the telco chiefs last October. “He called all the telco CEOs to talk about a single objective, challenging them with the question, How can Malaysia be the No 1 country in Southeast Asia and a Top 10 globally ranked 5G nation?” Fortunately the minister did not give them a deadline to achieve this, noted Al-Ishsal.
In light of this, it’s no surprise that Malaysia today is seen as, “a very aggressive country in terms of policy, framework and implementation of 5G,” notes Al-Ishsal. But more important, and this is a point he always highlights, is the strong collaboration the entire 5G process over the past 16 months has witnessed, between the MCMC, the Communications and Multimedia Ministry and its minister, Gobind, and with industry. And not just with the large industry players but all its licensees. In Al-Ishsal’s words, “Massive collaboration has happened over the past 16 months.”
That collaboration and the trust and goodwill it has resulted in, now enters a critical phase as the telcos, especially the large players, have to decide if they really want to pool their network assets into a single consortium that will build out Malaysia’s 5G network, as the preferred approach of the government.
As much as the government would be tempted to try and turn things their way in the discussions telcos are having now, it is not ramrodding this single consortium view across. Al-Ishsal clearly says, “the consortium is not a done thing. We have published a view of how we feel 5G should be rolled out in Malaysia. The industry saw this position for the first time on Jan 1.”
The next step is to finalise the marketing plan to be published circa February 2020. This plan is also going into a public consultation process for input after which the tender documents will be approved. It is only on submission of these tender documents that the MCMC will know who is bidding and if there will be competing consortiums.
But the hope is that there is a single consortium to deploy the national 5G network.
What also came across from the media briefing is the regulator’s insistence that there be no single leading party in the consortium. OK, Al-Ishsal didn’t use “insist” but he made clear that the regulator does not wish to see any party emerge as the leading party in the consortium. “That is not our intention at all.”
The reason for this is obvious as the emergence as a dominant voice in any infrastructure consortium would also imply unfair rates being charged as it is highly likely that all the parties of the consortium will also be competing to win customers from the retail aspect of the market. This is where the consortium discussions will get tricky as parties contributing more infrastructure will naturally want a larger say and MCMC will likely have to play a mediation role to create a win-win situation.
Making the task more challenging but not impossible, is that this is uncharted territory with no similar model in the world that the MCMC can look to for learnings and advice. “We are creating the Malaysian Model,” says Al-Ishsal.
Working in his favour however is the fact that Malaysian telcos have been working together for years, sharing infrastructure. It is now about taking it to the next level.
Among the leaders in sharing their network is Celcom Axiata Bhd whose CEO, Idham Nawawi points out, “collaboration today is already at a level that is much deeper than it has ever been. We are sharing domestic roaming and even fibre. The consortium approach is just about taking this to the next level of network sharing where it is about collaborating from Day 1.”
The challenge of course is about how they make this work, he muses. “But we are open to it.”
This seems to be the stance most of the telcos are taking. Being openminded is key as it will be tricky hammering out the commercial terms. As UMobile tells DNA, “we can’t share how much we will invest into 5G and it depends on how we work out the consortium and who pays for what part.”
While there are tougher days ahead in hammering out details, for now, AL-Ishsal is excited about the Langkawi Trials. “It’s a brave new world. We are pushing the envelope.”