PETALING JAYA: The government has no plans to profit from award of the 5G spectrum, according to the Malaysian Communications and Multimedia Commission (MCMC) chairman Al-Ishsal Ishak.
Such a policy would be a major shift from the past as telecoms players, which had to pay big sums of money to use spectrum for their services, may not be overcharged for usage. In turn, consumers should benefit from such a move.
“One important principle is (that) the government does not intend to profit from any spectrum exercise,’’ Ishsal said in reply to queries from StarBiz.
“It is a critical and valuable national resource that must benefit the nation from a variety of facets based on principles of providing pervasive, high-quality and affordable access to industry and society,’’ he added, but did not elaborate.
Players had been paying a paltry sum for spectrum but things changed in 2016. The government had raised RM3bil in refarming 900Mhz and 1800Mhz bandwidths.
With the new policy, MCMC is essentially setting a new benchmark to help the industry leap frog into 5G services. 5G is a technology that promises fast speed and connections. It opens the world for smart cities, driverless cars, improved health care and a fully-realised Internet-of-things.
5G is said to revolutionise the entire industries and the way people live, work and play.
Besides the 5G spectrum needed to fuel 5G enabled networks, players also want the 700MHz bandwidth. Some refarming of 2.3MHz and 2.6MHz can be expected.
Globally, governments have raked in billions of dollars in spectrum sales. The recent 5G auction in Germany drew criticisms as bids reached ?5bil. This could result in higher overall cost of bringing 5G to that market.
“The best practice is that spectrum needs to be priced appropriately. I would be worried to see high spectrum prices. There needs to be a balance between economic growth and bringing services to the market,’’ said Ericsson Malaysia president Todd Ashton.
Any spectrum award should be done in a “fair and transparent manner.’’
“There should be no room for preferential treatment to any player as done in the past. Only deserving ones should get the spectrum,’’ an industry expert said.
The earliest any spectrum for 5G can be given could be later this year.
Ishsal is looking at commercial roll-outs of 5G in Malaysia in 2021/2022.
South Korea became the first in Asia to roll out 5G enabled services over a week ago, ahead of Japan and China. The United States rolled out its 5G services last year.
Maxis Bhd chief technology officer Morten Bangsgaard said there were factors that would determine when the country would enjoy 5G.
“Firstly, you need to be ready for the high capacity demand. Secondly, you need new spectrum allocated for 5G and the price of devices to come down.
“So, 2019 will be a year of testing the technology and we likely won’t see any real roll-out until 2020 or 2021,’’ he said.
However, the question is whether Malaysia will use the 3.5GHz and 28GHz bands similar to that used by most global players or make compromises.
This is because the 3.5GHz band is occupied by Measat and some other satellite players.
It is important to know that global chip and handset makers are building on the 3.5GHz platform to create innovations and devices.
Ishsal said “before any spectrum band for 5G use is identified (including 3.5GHz), thorough investigation and analysis must be done. This is to ensure coexistence and compatibility between 5G and existing services. Japan and few other countries have demonstrated coexistence was possible,’’
He added that “such a study was important to identify the appropriate measures to mitigate potential interference as well as to develop solutions to address key issues such as frequency re-planning and migration of existing users, if necessary, across all affected bands, not just 3.5GHz.’’
How much spectrum is enough for each player?
Ashton is looking at blocks of 100MHz to 200MHz.
Celcom Axiata Bhd CEO Idham Nawawi said “5G technology needs much larger blocks of contiguous spectrum; it is likely going to be in blocks of 100MHz or several 100MHz, as opposed to current generation which typically comes in blocks of 10MHz or 20MHz.’’
Ishsal, quoting the GSMA report ,said the proposal is 80MHz to 100MHz of contiguous spectrum per operator.
Whatever the amount, players are excited about this new technology as it can do a lot more.
“We are actively exploring 5G’s potential to drive Malaysia’s digital future. Broad collaboration between governments and businesses is required to make this happen. We are working closely with the MCMC and industry partners to test user cases, conduct field trials and explore modes of 5G implementation,’’ Digi.com Bhd CEO Albern Murty said.
Cost will also be a consideration not just for spectrum but network build-up and products.
“We believe each player needs to invest about RM700mil to RM1bil each year in the initial years provided they have a solid 4G base network,’’ said an expert.
Ashton added that “the one fundamental building block for 5G is that players need a very good 4G layer.’’
Idham said, as an industry, they must “explore new ways of deploying our investments in a more efficient way.’’
He expected more collaborations between industry players to manage cost, which ultimately would lead to 5G services becoming more affordable to the customers.
Morten added that “what is new and really exciting about 5G is how you see co-innovation between enterprises, operators, the government and device manufacturers. Because it is a new and more efficient technology, it will help operators to cater to and build that capacity to support demand.”
For smooth transition into 5G, MCMC has set up a taskforce in November to explore every aspect. On Thursday, 10 parties will showcase innovations in Putrajaya.