The government of Malaysia said this decision will foster competition in the 5G field

The government of Malaysia confirmed it will enable the deployment of a second 5G network next year, amid concerns about pricing and competition with the current single state-run network, according to a Reuters report.

Last year, former Prime Minister Muhyiddin Yassin had unveiled an initiative for a state-owned vehicle to own all 5G spectrum, with various carriers using the network infrastructure to provide 5G services across Malaysia via wholesale or MVNO arrangements.

However, Malaysia’s 5G roll-out by state agency Digital Nasional Berhad (DNB) had raised concerns over pricing and transparency, as well as worries that a single state-run 5G network would result in a nationalized monopoly. It is yet unclear how this new decision would affect DNB’s existing agreements with Ericsson and other mobile operators.

Due to these concerns, the new Malaysian government had announced that it was reviewing the rollout of the national 5G network. The new prime minister Anwar Ibrahim had decided to review these plans due to the lack of transparency.

“This [new] model also takes into account the sustainability of the telecommunications industry ecosystem in Malaysia thus ending the monopoly element that is often associated with DNB,” Communications Minister Fahmi Fadzil said in a statement.

The official said that DNB has recently achieved 57.8% coverage of populated areas and is on track to reach 80% of populated areas in the country by the end of the year.

The country’s major operators had recommended the previous Malaysian government the introduction of a second 5G network to foster competition, something that was rejected.

Local carriers CelcomDigi, Telekom and YTL had agreed last year to take up a collective 65% stake in DNB, with the government holding the remaining 35%.

Rival operators Maxis and U Mobile had declined to take up equity in DNB. U Mobile later signed an agreement to access DNB’s 5G network, while Maxis has said it will wait until the government review of DNB is fully completed in order to take a decision.

According to a recent report by Singaporean investment bank UOB-Kay Hian, DNB could potentially select a second vendor for its 5G network.

The report revealed that DNB isn’t exclusively committed to Ericsson, which was selected in July 2021 to build DNB’s national 5G network. The report also suggested that there could be a provision in the contract related to the introduction of a second network provider—which opens the door for vendors such as Nokia, Huawei or ZTE to get involved in its 5G rollout plans.

The deployment of a new 5G network could potentially open the door for Huawei to take part in the future 5G project. Earlier this week, a report by the Financial Times stated that the United States and the European Union have warned the Malaysian authorities about the national security risks of allowing the Chinese vendor to have a role in the 5G network rollout.

According to the report, Huawei had been lobbying to take part in the future rollout of 5G network infrastructure in Malaysia.