Is Keluarga Malaysia pandering to the lazy fatcow telcos?

Nuclearbursaman here wrote about the supremacy of Ericson system employed by DNB for 5G SWN system.

Today he highlighted here Tan Sri Annuar Musa's twitter here of his discussion with Celcom-Axiata, Maxis and Digi.

It spark speculation the three telcos will combine to form the second 5G network to defeat the purpose of establishing DNB and employing the economical and consumer friendly SWN approach.

Not only it seemed to pander to the self serving interest of Mahathir's cronies and feed into rumours of Annuar Musa year-end vacation with Vincent Tan during the flood, it is repeating the past failure of depending on telcos to rollout the 4G.

More likely than not, the result will be the same with all the Mahathir era privatisation. Seldom guised as promoting competition, it is usually self serving and failed to achieve national interest. 

The Mole has a story:

Do we want to fail again for 5G?

By Salahuddin bin Hisham

The Mole

Feb 17, 2022

FOLLOWING the cancellation of the 3G, the shortcoming of the 4G network can be significantly felt as Internet connection and speed at home, outside the office and on the road can be diplomatically described as less than desirable.

None was more delibitating than last weekend trip to northern Johor. The Whatsapp, Google Map and even direct calls were not working on the Unifi Mobile. It made communication difficult and the trip for this Internet dependent traveller to be quite an ordeal.

There is, surely,  a technical explanation and likely not to be a permanent problem. In due time, it would be solved.

However, it is sufficient for Facebooker Fared Hassan to pose a pertinent question. Translated from Malay: Failed the first time round, still repeating (same mistake)? 

The earlier model was to give several telcos the 4G license. The telcos did the infrastructure tehmselves, including the tower, BTS, etc. Using Cornout Non-Cooperative Oligopoly market structure (CNCOM), telcos compete on “quantity” and in this case, for network coverage.

When they each achieved their optimum “quantity” (coverage) of profitabiity, they are less willing to increase the coverage and spend more to invest in improving the quality aand coverage of service.

They are somewhat like fat cows lazing on the field, collecting their annual profit at the expense of the people and indifferent to the deprived rural population.

In theory, competition is good but not in a monopolistic market in which licenses and access to capital are the barrier. It does happen in the practical world and Malaysia has proven the miserable failure of  the CNCOM structure.

The DNB model may sound worse and given a bad light by the description monopoly.

However, the model is not structured to deny network coverage because similar to the Tenaga Nasional Berhad (TNB), the profitable area should compensate for less profitable areas and all areas will have access to electric supply or in this case telephony coverage.

And, TNB is still profitable because via monopoly, the less profitable areas are compensated by the more profitable areas. The profit will enable DNB to maintain the system properly.

The Edge published a report dated Feb 16 entitled “Dual wholesale network model in 5G implementation will create confusion, says expert”,  that explained Fared Hassan’s point of view.

The report quoted the adviser to the United Nation (UN) on 5G strategy and policy, Brett Hann saying that using a dual wholesale network (DWN) model to implement 5G will create confusion in the market, according

Hann, who was speaking at a media briefing pointed out that the DWN model will raise a lot of questions that will pose further challenges in implementing the 5G technology.

“The DWN model, to me personally raises questions such as — are these entities friends or competitors?

“Are they going to go to the same capital markets for financing? Are they going to the same vendors?

“How are you going to handle cybersecurity which is critical? How are you going to coordinate those two firms? That to me just creates confusion,” he was quoted in the report.

Hann was also reported to have said that Malaysia will not suffer the same fate as Mexico in implementing the 5G technology as Malaysia is learning lessons from other countries.

“The government could have chosen a regional network perspective but they (Malaysian government) chose a national one which is totally legitimate and totally understandable.

“[In implementing 5G] you know you want to have good business operations, have a good vendor and you want to have some sort of transparent reporting,”  Hann had said.

The Federal Government has yet to decide on the single wholesale network (SWN) model for 5G rollout in the country.

Recently, Digital Nasional Bhd (DNB)’s chief executive officer Ralph Marshall in his reply to Bangi member of Parliament (MP) Ong Kian Ming, stressed that there will be enormous implications should the government decide on having a DWN model.

“It is highly unlikely that DNB in its current form will survive should there be another wholesale network provider.

“With the failure of DNB, the second wholesale provider will then eventually become a private SWN monopoly.

“There are also financial, legal and reputational implications for the country and the government should DNB be discontinued,” Marshall said.

Meanwhile, RHB Investment Bank in its research note on Jan 25 said the DWN model would cause more challenges, delay 5G execution, and contribute to excess capacity in the long run.

Its analyst Jeffrey Tan said in a note that DWN would also negate DNB’s strategic supply-driven model/mandate, resulting in potentially higher cost to serve as traffic and revenue will be shared.

For certain parties to want to maintain the oligopoly system, it is self-serving in every sense of the word. It serves to continue to make the cows fat and rakyat suffer.

So policy markers, political leaders and parliamentarians, comprende?