With governments, industries, and individuals continuing to rely on technology, development and progress have almost become synonymous with one’s ability to access the most advanced forms of tech. Thus, the emergence of 5G networks and their potential for improved connectivity among users has become a relevant topic.
As reported by Tech Wire Asia, a 2019 survey conducted by the Capgemini Research Institute found that 75% of global industrial organizations recognized 5G’s potential as a key catalyst to digital transformation, with 65% planning to implement 5G networks by 2021. While a follow-up survey found that only 30% have begun pilot testing, the early indications of 5G adoption are encouraging, nonetheless.
In line with this trend, in February 2021, Malaysia announced plans to build its own 5G infrastructure as opposed to reliance on private telecommunication services as per Bloomberg.
Potential Causes for Concern
While the involved parties have fully invested their energy to accomplishing such a lofty goal, some have expressed concern over the government’s ambition of creating its own private 5G network.
Based on reports from GSMA Intelligence, the analytics company noted that the move would undermine other operators’ own 5G projects. One such operator would be Maxis, who is Malaysia’s largest mobile operator. As announced by Mobile World Live, Maxis tapped Chinese enterprise Huawei as their 5G network provider back in 2019. Furthermore, GSMA also noted the potential for the Malaysian government to follow similar trends found during the 4G era wherein single wholesale networks failed to deliver quality service and connectivity.
Important consideration also should be given to how a private network would affect Malaysian businesses’ ability to attract investment. As reported by the Business Times in February 2021, Fitch solutions – a Securities and Exchange Commission (SEC) recognized credit rating agency – lowered Malaysia’s telecoms sector industry risks score to 74.9 out of 100, which is 10.7 points less than the previous mark. Given this relatively low mark, international and domestic investors alike may potentially become hesitant to engage businesses in the telecoms sector.
Steps in The Right Direction
However, the government is taking urgent action to ensure the feasibility of their ambitious goal. As part of its shift to a private 5G network, the government announced the creation of the Digital Nasional Berhad (DSB), a government-owned special purpose vehicle responsible for overseeing the national network. Further, according to an article by Reuters, as of July 2021, the DSB has contractually appointed telecommunications company Ericsson to spearhead the end-to-end development of Malaysia’s 5G network infrastructure. With Ericsson becoming totally responsible for the supply and management of the country’s 5G network, Malaysia has reportedly committed 2.65 billion USD over 10 years to the endeavor.
With preparations to launch the 5G network well under their way, the Malaysian government has set its sights to launch the network by the end of 2021, as well as to have services available to 80% of the 32 million population by 2024 as per reports by Capacity.
Such an immediate timeline will be beneficial to the country’s already booming digital economy. Based on a white paper by YCP Solidiance entitled Accelerating Your Digital Transformation: Are Malaysian Companies Geared to Digitalise?, data shows that the digital sector had experienced robust growth and registered a compounded average growth rate (CAGR) of 8% from 2015 to 2018. Considering that the introduction of their 5G network will only stand to benefit the digital economy, expect this figure to increase even further.
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