KUALA LUMPUR: Swedish telco giant Ericsson has added gloss to the positive of 5G adoption in Malaysia, a day after Digital Nasional Bhd (DNB) published a report claiming, among others, that such adoption will increase the country's gross domestic product (GDP) by five per cent or RM122 billion in 2030.
The "glowing" statements from both Ericsson and DNB followed analysts' concerns over downside risks to mobile network operators and swelling costs of the national 5G rollout from RM11 billion to about RM20 billion over 10 years.
According to an IDC White Paper commissioned and released yesterday by Ericsson, there will be 12.7 million 5G connections or roughly 22.4 per cent of total subscribers as well as 43.1 million 4G LTE subscriptions in Malaysia or 76.2 per cent of total subscriptions in 2025.
Ericsson, which was appointed by DNB to design and roll out the national 5G infrastructure and system, also cited the Malaysian Institute of Economic Research's forecast that 5G would contribute RM8.5 billion to Malaysia's GDP in 2025.
On Tuesday, DNB published a report by Ernst & Young Consulting Services Sdn Bhd (EY), saying that 5G would support the creation of 148,000 jobs across the economy and contribute to an increase in high-skilled jobs, besides the RM122 billion GDP contribution.
DNB also said EY's second economic model had indicated that its direct investment in the 5G network could generate an additional GDP contribution of RM20.9 billion.
Of this, an estimated RM7.9 billion (or 38 per cent) relates to the GDP generated directly by DNB through its expenditure on operating and corporate costs, with RM13 billion generated throughout the supply chain and wider economy.
Earlier this week, the New Straits Times quoted analysts as saying that Malaysia's ultra-high speed 5G rollout was teetering, clouded by swelling costs and downside risks to MNOs.
They said major mobile carriers had yet to sign any agreements with DNB and requested for "extensive revisions" to the company's pricing proposal for the rollout.
Analysts at Kenanga Research pointed that when DNB chose Ericsson as the sole vendor to design and roll out the network, the estimated cost stood at RM11 billion, lower than the initially budgeted RM15 billion.
Of the RM11 billion, RM4 billion was for Ericsson's network equipment, and RM7 billion for network infrastructure costs from other parties.
However, the figure was reportedly later revised upwards to RM12.5 billion, with the network cost estimate rising to RM8.5 billion.
Later on, DNB pointed out that there would be an additional RM4 billion for corporate costs, of which RM2.5 billion would be for labour.
This totals to RM16.5 billion, which DNB said could swell up to RM20 billion between 2025 and 2030.
Meanwhile, Ericsson said the deployment of 5G would serve as an economic and innovation driver for Malaysia.
The critical role of mobile networks (4G/5G) in accelerating the Jendela and MyDIGITAL initiatives, Malaysia's 5G readiness compared to its regional peers and potential impact of 5G on the consumer and enterprise segments had been examined and some recommendations for 5G deployment had been made in the White Paper on "Building a 5G Foundation for Digital Malaysia", it added.
"The White Paper was commissioned as part of our 5G study on Malaysia to see how Malaysians, investors and industries could be empowered to reach their full potential with a network that is reliable, robust, energy efficient and secure.
"Ericsson now looks forward to working with DNB to deliver a world-class 5G network for Malaysia and accelerate the digital transformation for Malaysian consumers and enterprises," head of Ericsson Malaysia, Sri Lanka and Bangladesh David Hagerbro said in a statement.
Some recommendations from the White Paper include the need for MNOs to introduce innovative applications, work with and enable developers to create robust apps and use cases that take full advantage of the speed, latency and reliability offered by 5G to enable them to rapidly grow their customer base.
IDC vice president of IoT and telecommunications Hugh Ujhazy said 5G would play a critical role in enabling the MyDIGITAL initiatives.
"Industries, including manufacturing, public sector, BFSI and retail will reap the benefits arising from 5G. Infrastructure investments over the last decade have built the backbone that 5G innovation will rely upon," Ujhazy added.