Tough times ahead for local 5G contractors if DNB fails

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Recent announcement by Communications Minister Fahmi Fadzil on Dual Wholesale Network have cast dark skies, and brought upon a devastating effect on myself and other local contractors. Telco service and maintenance businesses are now hanging by a thread and this could lead to dire consequences for our staff. Our hopes on continuing to be a part of the nation’s great infrastructure project has now been squashed at the hand of intense and greedy lobbying by local telecommunication giants seeking only to enlarge their profit margin.

The announcement did not include any guarantee that local and / or bumiputera vendors would be given any preference in the development of the first nor second 5G network. This is a stark contrast to what was previously agreed upon with DNB where out of total expenditure of RM 11 billion, more than 60% will benefit Bumiputera AND other Malaysian contractors over the next 10 years.

The rationale behind the move to give preference to Bumiputera and local players is so that we can develop local talents, ensure technology transfer as well as spur the growth of local telco engineering ecosystem. And as the 5G technology is growing, this could propel the nation further up the value chain.

DNB’s commitment to invest RM11 billion is also something not matched by the other entity. Telcos only spend an average of 17.5% of their revenue on infrastructure. Their priority is always for their bottom line first and never for the good of the Rakyat.

The training and technology transfer part were also not elaborated in the latest announcement. Why are we sacrificing a chance to future-proof our nation to satisfy the greed of telco tycoons who have been raking in billions year after year at the expense of the consumers while letting the nation telco infrastructure languish, leaving millions out in the dark, deprived of basic access and quality connectivity. DNB on the other hand provides structured training and development programs for local vendors to help us develop the skills and knowledge we need to participate and spur the 5G market. These programs cover a range of topics, including 5G technology, ecosystem solutions, project management, and business development.

The other contention that we all have with the announcement is that we know what the telecommunication company will do given this opportunity. Their poor track record of developing previous 4G/3G /2G network is abysmal; We regularly hear of poor network coverage at rural areas, high price per Gbps if we are to compare with other countries in this region and cartel like price setting mechanism. If we just look into green telco company rate, for 4G coverage, it costs RM100 for 1Gb of data while it will only cost RM15 when it is in 5G. How is that logical? It makes no sense at all. How can a better speed, quality and reliability be provided at a fraction of the cost?

Our great nation had made mistakes that affect the development of the nation homegrown talent and at a steep price to the consumer. Let us not repeat the mistakes that was made. Do not kill off a vibrant local telco ecosystem of suppliers in the altar of profitability of the telco tycoons.

Rahman Hussin
Principal, Imperium Consulting

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