We can understand the telcos’ vehement opposition to the SWN. The oligopolistic market had been very good to their bottom lines, where limited competition kept profitability high. The telco business is a veritable cash cow, enabling them to reward shareholders with huge dividends over the years (see Charts 1 to 3). They would obviously want to protect this status quo. The rationale behind the Cabinet’s decision, on the other hand, is confounding to us. Let us be crystal clear about what this decision means:
The debate over Malaysia’s decision to adopt a government-owned 5G Single Wholesale Network (SWN) has been incessant, owing primarily to strong opposition from the giant telcos.
Apparently, the Cabinet had decided on May 3, 2023, and Aug 23, 2023, for the 5G SWN to be enhanced and transitioned into a 5G Dual Network model — even though Digital Nasional Bhd (DNB) has successfully rolled out 5G infrastructure in a record-breaking time of two years. More than 80% of Malaysians now have access to 5G high-speed mobile data services at prices that are lower than previous data packages. In addition, this rapid deployment has played a central role in attracting more than RM160 billion in digital investments in the country between 2021 and March 2024. It is what is driving the best stock market performance on Bursa Malaysia in a decade.
