KUALA LUMPUR: The Malaysian Communications and Multimedia Commission (MCMC) has been asked to cancel the 5G spectrum bands awarded to five telecom players without open tender.
Communications and Multimedia Minister Datuk Seri Saifuddin Abdullah today said "18 instruments including the use of the spectrum on the bandwidths of 700MHz, 900MHz and 2600MHz" had been presented to me.
"Based on technical and legal issues, as well as the need to be more transparent, I have ordered the MCMC chairman to cancel the ministerial order and review the instruments as soon as possible," Saifuddin said in a statement.
He added that the government through the ministry was committed to giving the best service in technology and telecommunications, thus achieving a high-speed internet access and ICT facilities.
The statement was issued after reports of the 5G spectrum being awarded without an open tender went viral.
The ministry reportedly had assigned the 700MHz spectrum bands to Celcom Axiata Bhd, Digi.Com Bhd, Maxis Bhd, Telekom Malaysia Bhd and Altel.
Previously, it was reported that the 700MHz spectrum, along with 3.5GHz and 2628GHz, were identified as the pioneer bands for the implementation of 5G networks in Malaysia.
In January this year, the ministry had issued a final report mentioning that the 700MHz and 3.5GHz bands would not be allocated to individual licensees.
Meanwhile, analysts are doubtful on the demand for 5G networks as Malaysia will first need to develop an ecosystem with advanced industries like artificial intelligence, driverless cars and Internet of Things.
Public Investment Bank Bhd (PublicInvest) analyst Eltricia Foong said investment cost with infrastructure including spectrum and small cell towers would be one of the biggest challenges for the 5G implementation here.
"Adoption rate is seen as another obstacle as 5G connectivity is only expected to apply to a small minority of industry players," Foong wrote in a report today.
"Generally, we believe the commercial rollout of 5G networks would take several years, given the need to improve the connectivity of current network as well as uncertainty over the adoption rate by consumers and businesses," added Foong.
She said it remains to be seen whether the previous consortium approach to help minimise cost and reduce duplications of infrastructure was still applicable as the pricing for the 700MHz spectrum was not disclosed.
CGS CIMB said the single-consortium model might have been too difficult to implement, while the idea of appointing a single telco as the national 5G infrastructure company had faced opposition from various parties.
"If the 5G consortium idea is indeed scrapped, we also think telcos would look to resume previously announced memorandums of understanding to explore 5G network sharing and may take a progressive rollout approach, given the lack of near-term business case (unless high coverage targets are set for the 700MHz/3.5GHz licences)."
CGS CIMB reiterated its "neutral" call on the telco sector with key upside risk with merger and acquisitions.
Key downside risks include higher-than-expected upfront fees charged for the 700MHz/3.5GHz spectrum bands, more intense competition and adverse new regulations.