The Government expects Malaysia 5G services for consumers to be priced cheaper than current 4G services, according to the Communications and Multimedia (KKMM) Minister in the Dewan Rakyat today.
In response to a question from Ahmad Fahmi Mohamed Fadzil (PH-Lembah Pantai), who wanted to know how much was the opportunity cost for the government in using the wholesale model as compared with using the option to auction off the 5G spectrum to telecommunication companies for the transition from 4G to 5G, Minister Annuar Musa said, “The opportunity cost for the government is a non-issue as the 5G rollout is not using any government funds because it is arranged by the private sector.
“The wholesale concept, however, helps avoid unreasonably high price for the consumers,” reported Bernama and FMT.
Annuar then explained that if the acquisition of the 5G spectrum was carried out via auction, consumers could end paying more to the mobile operators which won by placing higher bids.
“It would affect consumers because the higher the auction price, the more expensive the 5G network charges would end up being for them,” he was quoted as saying by the national news agency.
Annuar added that this would contravene the government’s objective in ensuring that the price for 5G will not be higher than the price of 4G.
The Dewan Rakyat was also told that the price for the 5G network offered to telcos was not set by Digital Nasional Berhad (DNB).
According to Annuar, the setting of the price is done in consultation with the Malaysian Communications and Multimedia Commission (MCMC) using a Reference Access Offer (RAO) for 5G wholesale services.
“RAO negotiation is still ongoing and only after the RAO pricing is set, can the 5G rollout be inked with MCMC approval.
“So far, MCMC has yet to give any approval for the price,” he said, referring to the RAO which will be the basis for DNB to enter into commercial agreements with Telcos.
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With the Malaysia 5G network expected to be available next month, Digital Nasional has yet to announce any Commercial Partnership with the Mobile Network Operators (MNOs).
Last week, Digital Nasional Berhad (DNB), the exclusive Government-owned 5G network wholesaler, said that a draft Reference Access Offer (RAO) for 5G wholesale services has been shared with the MCMC and the Telcos in September 2021 to enable them to engage with DNB and provide feedback. The RAO is the standard commercial and noncommercial terms on which a 5G wholesale service will be made available on a transparent and non-discriminatory basis to any licensed entity requiring access to the 5G service. DNB anticipates finalizing its RAO by end-November 2021 upon the MCMC’s approval. Following this, it will finalize commercial negotiations with the MNOs.
DNB also repeatedly claimed that its 5G cost per GB to the Telcos will be “significantly lower” than 4G cost per GB. The Single Wholesale Network (SWN) provider is targeting 500 5G sites in Putrajaya, Cyberjaya and Kuala Lumpur. It pledged to deliver 100Mbps speeds at cell edge and claims it can face a penalty if it fails to deliver the 100Mbps speed.