PETALING JAYA: There are mixed reactions from mobile players to the plan of having a single entity or consortium with multiple licensees handling all the infrastructure needs for 5G and some are surprised that the 700MHz band will be used for the deployment of the next generation telecommunication service.
“Celcom Axiata Bhd has always believed that collaboration is the way forward for the industry to explore a coordinated and efficient 5G deployment, and the 5G consortium is an option that we are open to, ’’ said Celcom chief executive officer Idham Nawawi.
Some other telcos have not gone on record but there are players who have reservations over the structure of the consortium and question why 700MHz is allocated for 5G immediately when globally it was not the norm.
“Moving to a single consortium for 5G is basically creating a monopoly. It is regressive and there is little room to compete on infrastructure level, so consumers may be stuck with non-competitive pricing plans, ’’ said an industry executive who requested anonymity.
Another said “we need to digest the details. It appears neutral to good and is a new and innovative way of moving forward. But we have questions and will raise with the regulator to clarify’’.
Maxis Bhd CEO Gokhan Ogut said: “We continue to support the nation’s 5G agenda, and we are committed to delivering the best 4G and 5G innovation to benefit the people and business in Malaysia. There are many areas that will help accelerate the benefits of connectivity, and we look forward to understanding the details of the allocation process for an informed evaluation.’’
Telekom Malaysia Bhd (TM) managing director/CEO Datuk Noor Kamarul Anuar Nuruddin said the telecom giant has always been supportive of the single infrastructure company approach as it will help achieve faster infrastructure rollout, lower the cost, avoid duplication and would lead to an efficient use of spectrum.
However, there is talk in the industry that TM may be taking a leading role in the consortium and that has made competitors anxious. TM had put up billboards to declare it is the “nation’s 5G infrastructure provider’’.
There is even talk that edotco, a unit of Axiata Group Bhd, is keen to lead because it has existing tower infrastructure that is necessary for the 5G rollout.
The regulator, the Malaysian Communications and Multimedia Commission’s (MCMC) chairman Al-Ishsal Ishak allayed those fears and said “it is not our intention for one party to take the lead or control the consortium’’.
Al-Ishsal said the “corporate structure of the consortium will be indicated in the marketing plan to be issued by MCMC by the first quarter of 2020”.
He added that “we will go the Apparatus Assignment (AA) way versus Spectrum Assignment (SA)”.
“Therefore the fees payable would be in relation to lighting up each communication cell and there is no upfront payment to be made, unlike the case for SA.
“The fee schedule for AA is outlined in the Spectrum Regulations and the commission does not intend to profit from the allocation of these bands, ’’ Al-Ishsal added.
AA is given on a per site basis and subject to renewal every year whereas SA is given for a fixed number of years, normally 15 years. The cost of using the AA mode is cheaper than the SA because there is no upfront payment involved for the spectrum. This simply means the consortium will not have to pay large lump-sum payments upfront which can run into billions of ringgit for the use of the spectrum.
On Jan 1, MCMC issued a statement saying it was taking an innovative and forward-looking approach on the allocation of spectrum bands for 5G.
MCMC wants to allocate 2x30MHz of the 700MHz and 1x100MHz for 3.5GHz spectrum to the 5G consortium. It will also release 26/28GHz (four blocks 1x400MHz nationwide, four blocks of 1x400MHz localised). No timeline is indicated for the release of the remaining spectrum.
MCMC plans for a “beauty contest” process for the assignment to start in the first quarter of this year and commercial 5G deployment in the third quarter of 2020.
Some players were surprised over the allocation of 700MHz for 5G. During their December meeting with the regulator, they had proposed that 700MHz be used for 4G, instead it is now for 5G.
“They could have allocated 2x100MHz blocks of 3.5GHz instead of using the 700MHz immediately for 5G. 700MHz is best for 4G to bridge the gap to achieve the government’s objective of reaching average speeds of 30Mbps in 98% of populated areas by 2023, ’’ said an industry source.
“It is bad news for their 4G networks and they may have to make some huge write-offs on their assets with no 5G spectrum in sight since new spectrum for 5G is only meant for the consortium.
“It diminishes the operator’s ability to service debts and make future investments. Besides, it affects investor confidence in the sector and this may have an impact on foreign investment, ’’ he claims.
Globally some countries are calling for the sharing of networks given the high cost of deploying 5G as it promotes network efficiency. But some operators felt that limiting to a single player diminishes any hopes of competition at the infrastructure level.