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WHILE the spectrum is merely radio frequencies, it is often a prized asset of telecommunication companies (telcos).
Globally, telcos have been pouring billions of dollars into securing the spectrum via auctions, considering the need to offer high-speed, wireless Internet services.
In the case of Malaysia, the spectrum for 2G, 3G and 4G was not competitively auctioned in the past. Instead, the telcos have been allocated with relevant radio frequencies – for relatively much cheaper prices.
However, this time around for the 5G rollout, the telcos will not own the spectrum for the first time.
This means the 5G spectrum will be a “shared commodity”, and not a prized asset of any service provider that could be used to bolster their balance sheets.
The government will be the owner of the spectrum and the 5G infrastructure, while telcos will tap on the network for a certain wholesale price.
The telco will then transfer the 5G access to the end-users, alongside their other offerings.CLICK TO ENLARGE
Under this approach, there will be no question on who gets a larger share of the spectrum allocation.
Back in 2012, there was criticism when little-known Puncak Semangat was awarded the 40MHz bandwidth for the 4G long-term evolution spectrum, the highest share among eight selected companies.
The others, including Celcom Axiata Bhd, Digi.com Bhd and Maxis Bhd, received 20MHz of bandwidth each.
Under the 5G rollout via Digital Nasional Bhd (DNB), well-established mobile network operators (MNOs) such as Maxis, Celcom or Digi will be on a level playing field with any new entrant, at least in terms of competition.
No party is required to spend huge capital expenditure (capex) to build the 5G infrastructures. Rather, they would compete on differentiated and innovative 5G services provided to end-users.
This is expected to give rise to more competition, which should be beneficial for the end-users.
As for the telcos, customer acquisition and retention will depend on their ability to provide differentiated offerings at attractive prices. Moving forward, the focus will not merely be on faster speeds or network size.
Everyone should have the same access.
Interesting as it may sound, Malaysia is going into uncharted waters as the 5G network will be deployed and owned by DNB alone.
Many wonder whether a government-led, single-entity rollout of the 5G network will put the private telcos at a disadvantage.
Some believe that Malaysia’s approach would affect telcos’ margins in the longer run due to extra costs.