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KUALA LUMPUR, Feb 22 — The government said today the distribution of 5G spectrum will not be done through auction but bought via a special purpose vehicle wholly owned by the Ministry of Finance (MoF).
The SPV, to be unveiled soon, will be the sole proprietor of the next-generation technology licensed to provide the spectrum bands wholesale, Multimedia and Communications Commission (MCMC) chairman Fadhlullah Suhaimi Abdul Malek said in a media briefing today.
5G is a fifth generation mobile network that provides super fast connectivity needed to enable technologies like artificial intelligence and the internet of things (IoT), by allowing connection with machines or devices.
The MCMC previously said it would distribute the 5G spectrum through bidding.
What exactly caused the policy change was unclear but Fadhlullah said giving a government-owned SPV the wholesale licence would help level the playing field and allow telecommunication firms provide cheaper 5G services.
“If the cost is not high then there is little chance that that would be passed over to the licenced service providers who in turn would have passed it over to consumers,” the MCMC chairman said.
Government estimates that upgrading existing infrastructures to support 5G technology can be between 25 to 75 per cent more expensive than it was to facilitate the shift from 3G to 4G.
Critics have previously questioned if the country was ready for the technology when its 4G coverage remained under capacity and yet to be fully utilised.
Last Friday Prime Minister Tan Sri Muhyiddin Yassin unveiled a private-public partnership plan to invest RM56 billion into beefing up connectivity for the next ten years, which included a RM15 billion budget to roll out 5G technology in stages in the next five years.
He said 5G technology will be the “game changer” that would catapult Malaysia into a regional e-commerce powerhouse.
Under the Pakatan Harapan administration, the MCMC said it would undertake an open tender process for the allocation of the spectrums via a single consortium because it wanted to lower capital expenditure by minimising costs and preventing the duplication of infrastructure.
Fadhlullah, who replaced the PH appointee Al-Ishsal Ishak as MCMC chairman last year, told today’s media briefing today the 5G spectrum allocation would be “equitable”.
Details about the SPV would also be made transparent, he pledged.
The PH government’s collapse in February 2020 had raised questions about the country’s 5G plans, particularly on the fairness in the spectrum distribution, or if the new administration would honour its pledge to do it through open bidding.
“Everyone will get a fair share,” he said.
* Editor’s note: A previous version of the report incorrectly stated that the spectrum bands would be leased out instead of auctioned off. The report has since been corrected.