In late 2019, Malaysia came up with one of the most innovative, if potentially over-complicated, 5G spectrum schemes, with the aim of accelerating build-out, especially to support enterprises, via a shared network.
Last month, however, the government said it would bypass the auction process altogether for 700 MHz, and allocate the spectrum to five operators – Celcom Axiata, Maxis, Digi and Telekom Malaysia, plus MVNO Altel Communications (though not 4G providers U Mobile and YTL).
In the government’s new plan, of May 15, the three largest MNOs – Celcom, Maxi and Digi – would have been allocated 2×10 MHz each in the 700 MHz band, with TM and Altel receiving 2×5 MHz each. However, there was no mention of the 3.5 GHz band – the one in which most operators round the world have started their 5G roll-out because of its suitability for adding capacity selectively where required, while keeping 4G for coverage in the early phases.
But it has done another U-turn, and last week cancelled the new plan. Saifuddin Abdullah, the minister for communications and multimedia, said that, “to ensure a transparent process”, he had directed the regulator, MCMC, to cancel the ministerial directive and review the situation.
It is unclear whether this means MCMC will revert to the proposals it drew up in January, to award 700 MHz and 3.5 GHz spectrum to a consortium of operators in order to build and run a shared, national wholesale network.
The aim was to “lower the capital expenditure by minimizing costs and prevent the duplication of infrastructure, at a time where improvements in 4G networks are continuing,” the MCMC said at the time, while making more efficient use of spectrum. The shared network would have occupied just 2×30 MHz in the 700MHz band and 100 MHz in the 3.5 GHz band. A wholesale approach would have allowed small operators, MVNOs or new entrants to provide 5G services.
The aim of MCMC’s plan was to avoid the trap of forcing operators to compete for relatively scarce capacity (in 5G terms at least), and so ending up paying very high sums, with a poor knock-on effect on the ability to deploy rich networks. If shared between multiple MNOs, not only would prices skyrocket, but no operator would be likely to come away with sufficient capacity to support the differentiated services which industries such as manufacturing, as well as consumers, are hoping for in 5G.
However, operators will have the chance to get their own spectrum at a later stage – more will be allocated, in the 3.5 GHz band at least, in the future.
The January plan did not go as far as Telekom Malaysia – the wireline incumbent, but only fourth in the mobile market – had wanted. TM had proposed that it should take sole responsibility for building a single, wholesale 5G network to reduce costs for all the MNOs. It wanted to be given the rights to be the exclusive deployer of 5G in sub-6 GHz bands and claimed “a drastic approach” was required to make Malaysia’s 5G roll-out cost-effective and able to support the government’s ambitious national digital and industrial objectives.
“The basic supply-side economics of individual mobile roll-outs and multiple overlapping networks can no longer work,” TM wrote in a regulatory filing last year, and the expense of such an approach would limit the ability to launch critical services like health and public safety, or to extend mobile broadband to underserved rural areas.
“Splitting the spectrum bands to many operators is neither efficient nor economical for the country,” TM added. “A single national infraco will avoid duplication of infrastructure and networks, thus reducing the total cost of ownership for the industry.”
MCMC stopped short of that, instead announcing its shared consortium scheme along with a multi-tiered spectrum allocation plan. The participants in the consortium would be decided by a tender process, though four of the MNOs – Celcom, Digi, Maxis and U Mobile –were said to be certain to be included. The participation of TM, tower operator edotco and YTL was also speculated.
The regulator also came up with plans for millimeter wave spectrum, which are assumed still to be going ahead, though perhaps not until 2021. These would offer 26 GHz and 28 GHz spectrum for 5G via an auction (26 GHz) or on a first-come, first-served basis (28 GHz). The latter would be open to any organization, not just telcos, and would be allocated for highly localized areas, not nationally like 26 GHz. This shows an attempt by MCMC to open up airwaves for industrial or other providers. These may find a better commercial model than the operators to support some localized or specialized user groups and applications, whether for enterprises, cities, rural areas or other sectors with demanding requirements.