KUALA LUMPUR: The RM4.6 billion Jendela contracts are expected to be awarded by the Malaysian Communications and Multimedia Commission (MCMC) in the next few weeks.
Analysts attending an industry briefing recently said MCMC was at the tail-end of evaluations for the digital infrastructure works involving 1,661 sites.
They also said mobile operators were closely engaging with Digital Nasional Bhd (DNB) during the planning stages of the national rollout of 5G network.
"The industry is progressing well in the rollout/upgrades of the fixed and moble broadband infrastructure (under Jendela)," Affin Hwang Capital's Isaac Chow said in a report today.
"MCMC hopes to announce the tender results by end-July or mid-August 2021," Chow added.
Jendela is aimed at improving digital connectivity nationwide, laying the foundation for comprehensive and high-quality broadband coverage and the country's transition towards 5G technology.
Jendela has two phases.
Phase One, from now to 2022, will entail enabling as many as 7.5 million premises gigabit speeds with fixed broadband, 4G mobile coverage from 91.8 per cent to 96.8 per cent in populated area, upgrading mobile broadband speed from 25Mbps to 35Mbps, and the gradual retirement of 3G networks by the end of 2021.
Phase Two, from 2022 and beyond, will involve utilising fixed wireless access and other fit-for-purpose technologies to address further gaps in digital divide, while priming for the eventual adoption of 5G once plans in Phase One are achieved.
Chow said MCMC chairman Dr Fadhlullah Suhaimi shared that government-owned DNB was a wholesale player and the potential customers (mobile operators) were closely engaging with DNB during the planning level to understand customers wants.
He said Maxis Bhd chief executive officer Gokhan Ogut had shared at the briefing that the engagements with DNB were "so far so good" and Maxis did not expect an issue with Ericsson 5G systems.
"Also, Gokhan believes that in spite of sharing a single 5G network, the telcos still have plenty of areas to differentiate and compete with each other," he added.
DNB had on July 1 appointed Ericsson of Sweden to design and build the national 5G network for a total cost of RM11 billion.
DNB said the capital expenditure included Ericsson's network equipment, deployment services, and ongoing maintenance and network management cost of RM4 billion.
The balance of RM7 billion will cover network infrastructure costs from other parties comprising primarily tower rental and fiber leasing over a 10-year period.
There were currently 33,784 tower and rooftop structures in Malaysia, according to MCMC.
Meanwhile, analysts at AmInvestment Bank Bhd CGS-CIMB Research said telco providers had continued to make good progress on Jendela's target without any serious issues.
"We maintain our 'neutral' call and still prefer the fixed to the mobile segment due to the former's better revenue growth prospects and relatively more benign competition," CGS-CIMB said.
The firm noted that key developments to watch out for over the next six months included the review of the Mandatory Standard on Access Pricing (MSAP) and the announcement of the Jendela 1 satellite coverage rollout tender winners, which might attract investors' interest in telco contractors.
AmInvest said political changes could re-emphasise the National Fiberisation and Connectivity Plan prerogatives in extending cuts to fixed broadband prices and the MSAP structure for wholesale fibre operators.
Both research houses maintained their "buy" call for Telekom Malaysia Bhd with a fair value of RM7.10 (AmInvestment), and a target price of RM7 (CGS-CIMB), while also maintaining "hold" call for Maxis Bhd with a fair value of RM5 (AmInvestment) and RM4.80 (CGS-CIMB).