Every Malaysian should pay attention to the ongoing debate on how 5G or the fifth generation of cellular networks, which boasts superb broadband speeds and connectivity, is rolled out here. That’s because it is a policy decision that could impact how fast the country catches up in the race towards developed high-income nation status and make it worthy again of being called an Asian Tiger economy alongside Singapore, Taiwan, Hong Kong and South Korea — all four already have live 5G networks and users.
Just as the explosion of the Korean wave was decades in the making, South Korea was able to beat the world in launching the first 5G network on April 3, 2019, because it had spent decades laying a strong foundation in multiple areas, from fibre connectivity to the capability to manufacture network equipment, LCD panels, batteries and desirable 5G foldable phones. More than a quarter or 17.8 million of South Korea’s 71.9 million mobile subscriptions (51 million population) were already on 5G at end-August, according to data provided by its ministry of science and IT, even though 5G coverage is still largely focused in Seoul and targeted areas, but will reportedly expand nationwide to 70% by 2025.
An OpenSignal report in February that benchmarks global 5G experience on mobile showed 5G download speeds for South Korea averaged 354.4Mbps at end-2020. Under the Jendela initiative to expand nationwide 4G coverage, Malaysia aims to raise mobile broadband speeds from 25Mbps to 35Mbps. According to Digital Nasional Bhd’s (DNB) statement on its 5G network coming online on Dec 15, end-users with compatible 5G devices will enjoy speeds of at least 100Mbps at the weakest point of 5G coverage.
South Korea’s download speeds now average more than 400Mbps on mobile, enabling next-generation content and experience for consumers such as multi-camera views for live events as well as virtual and augmented reality experiences. Badminton and football fans here may be interested to know how 5G is allowing South Korea’s baseball fans to enjoy the game from different angles in real-time as a taste of what is to come when 5G is prevalent here.
South Korea had launched 5G services for enterprise use as early as December 2018, setting the stage to build and test autonomous ships, and not just land vehicles, among other things powered by Internet of Things (IoT) platforms as well as multi-access edge and cloud computing. Subscription-based smart factory services such as product defect detection is already a possibility alongside 5G-powered solutions like autonomous drones for real-time logistics, aerial, water, pesticide spray and other types of surveillance.
Clearly, South Korea — which reached the threshold of a lower-middle-income country in 1969 (the same year as Malaysia), attained upper-middle-income status in 1988 and advanced to high-income status in 1995 — intends to keep moving higher and remain an indispensable part of the global value chain. South Korea’s government had recognised 5G alongside artificial intelligence (AI) and data as key enablers of the Fourth Industrial Revolution (4IR) as early as 2017 when introducing policies such as i-Korea 4.0 and 5G+ strategy as well as setting up a presidential committee to oversee the expansion of its capabilities in data, hyper-connected network and AI to better lives using technology.
Taiwan — home to global foundry TSMC, whose chips are used by leading 5G smartphones as well as gaming phone makers — expects to have 30% 5G penetration soon, having hit 12% just one year after launch in July. In April, Taiwan Mobile said its 50% population coverage on 5G will be expanded to 90% by year end. The same February 2021 OpenSignal report showed Taiwan at No 3 with an average 5G download speed of 272.2Mbps on mobile.
Across the Causeway, Singapore rolled out in May a so-called 5G standalone (SA) network which, as the name suggests, can transmit data independently on a 5G network without partially relying on 4G infrastructure, as with the case of a 5G non-standalone network (NSA).
While Singapore’s minister for trade and industry said in August that 5G would cover half of the city state by end-2022 and the entire island by end-2025, Singapore Telecommunications Ltd’s website shows that its 5G network already covers more than two-thirds of the island republic. It is not a country to invest in anything that does not generate returns for the city state or its people.
What about Malaysia?
An upper-middle-income country since 1996, Malaysia will see 5G go live in Putrajaya, Cyberjaya and parts of Kuala Lumpur on Wednesday (Dec 15) — the first step towards having 40% 5G coverage by end-2022, 70% by end-2023 and above 80% by end-2024 to power more sophisticated next-generation economic activities faster and better. The targeted coverage is to also help businesses digitise and move up the global value chain faster and place Malaysia ahead of most Asean countries, except Singapore.
DNB has offered telcos a three-month free trial of the 5G network that they can provide to their customers but not all have warmed to the offer.
It appears that more than nine months after the landmark policy decision was made to create DNB — the state-owned entity mandated to build and own 5G network infrastructure that is essentially being paid for using securitised cash flow from its customers (mobile operators will be buying wholesale capacity to offer 5G services to their end-users) — it seems to be faced with an existential crisis that could derail the speed and quality at which nationwide 5G will happen here.
Last Tuesday (Dec 7), Communications and Multimedia Minister Tan Sri Annuar Musa sprang a surprise on the progress of 5G rollout in Malaysia when he told reporters that the cabinet is reconsidering the single 5G network wholesale model under DNB — which is under Minister of Finance Inc but is regulated by the Malaysian Communications and Multimedia Commission (MCMC). That’s barely a month (Nov 10) since the same minister witnessed DNB’s demonstration to the media that its 5G Multi-Operator Core Network (MOCN) had successfully integrated with that of five mobile operators (integration with a sixth operator was underway).
A decision, he said, will be made by January 2022.
Cabinet meets this week
It is understood, however, that a cabinet meeting will be held this week to discuss the matter.
Thanks to a Nov 10 article by Reuters, “No takers for Malaysia’s 5G plan as major telcos balk over pricing, transparency”, the fact that there is serious pushback from the industry on the government’s policy decision to give the entire 5G spectrum to DNB came out in the open.
Despite the merits of the single wholesale model in delivering nationwide 5G coverage faster and at lower costs by cutting duplication, it is not a surprise that there is resistence from the industry given that it disrupts the status quo.
Large operators will no longer be giving out 5G infrastructure contracts and will probably have to accelerate the depreciation of their existing telecoms infrastructure assets, including investments in 4G infrastructure to expand the national 4G coverage from 91.8% to 96.9% of populated areas under Jendela. About RM11.2 billion or 40% of the RM28.8 billion budgeted for Jendela comes from the Universal Service Provision (USP) fund to bridge the digital divide.
Not owning 5G spectrum and their own separate networks means mobile operators would no longer be able to differentiate themselves on network quality but have to compete on service quality and product differentiation to retail and enterprise customers even sooner than initially thought. Thanks to the huge surge in data usage in recent years, the additional investment necessary to maintain high-quality network coverage and provide next-generation services while keeping shareholders happy have pushed a number of mergers globally — including in Malaysia, Thailand and Indonesia.
On top of 4G and regular capital expenditure, which have averaged about RM600 million to RM1 billion a year for each operator in recent years, it is understood that mobile operators would be expected to take up a minimum capacity for 5G once they sign up with DNB.
Put another way, mobile operators have no choice but to also offer 5G services in areas that may not be financially viable for them because they have to take on a minimum commitment of all areas that DNB rolls out 5G to. That’s one bone of contention, even though DNB’s cost of rolling out every gigabyte of data is lower than the cost of all operators doing it on their own.
From the country’s competitive position, however, it is in the government’s and people’s interest that even areas that operators think are not commercially viable in the beginning also get 5G to speed up adoption. Wider adoption could also help shore up economic activity and income outside the Klang Valley, in state capitals and in main towns.
That should help with the country’s efforts to bridge the digital divide as well as the development gap between various states, which is one of the aims of the 12th Malaysia Plan (12MP).
Digital healthcare for the more remote parts of Malaysia would benefit people without immediate access to hospitals as well as the older population. South Korea’s largest telecommunications service provider KT Corp and Samsung Medical Centre said in January 2020 that they were piloting smart patient care and innovative medical services using 5G enterprise capabilities to improve operational efficiency as an initial step towards building a 5G Smart Hospital.
This includes a 5G-assisted education programme that allows surgeons in the operating room to teach a large group of medical trainees in a separate lecture room using sync cams and real-time high-quality video footage from the perspective of the surgeon on a 5G network. Innovations explored include AI-assisted in-patient care systems, which allow medical staff to respond better to patients while smart robot assistants reduce secondary infections and save on human cost in waste disposal.
Indeed, the reliability of high-speed broadband connectivity is a prerequisite for any country that intends to remain globally competitive and move up the value chain. Just as how the building of the North-South Expressway in the late 1980s changed the country’s road transport connectivity when it opened in September 1994, nationwide availability of 5G stands to be the critical differentiator in the Fourth Industrial Revolution.
DNB’s position
When asked to comment on the minister’s statement on the single wholesale 5G network, DNB chief operating officer Dushyan Vaithiyanathan would only say that the entity remains committed to delivering a working 5G network according to the committed timeline to enable the delivery of 5G services by mobile network operators to end-users.
According to him, Malaysia’s 4G coverage only reached 50% after three years of deployment by the various operators, but DNB can push 5G coverage to 80% within the same time frame and at a much cheaper cost of only RM16.5 billion. The cost of a 5G network could easily rise to RM30 billion to RM35 billion if the operators build it on their own, he had said previously.
The implementation of 5G is of national interest as it is much needed for Malaysia to take that technological leap forward across all industries. The country and its people will be paying the price for decades to come if a wrong decision made today derails the 5G rollout.
SOURCE: https://www.theedgemarkets.com/article/cover-story-5g-debate
BM 
EN