Malaysia announces second 5G network but who will provide the kit?

The Malaysian government has decided the country needs another national 5G network, following pushback against the existing state monopoly.

The tweet and video below show the announcement by Malaysian Communications Minister Fahmi Fadzil. There doesn’t seem to be an English-language announcement but reports by The Borneo Post, SCMP and Reuters confirm the auto translations of that material are accurate.

This development follows reports earlier this week that the US and EU have been leaning on Malaysia not to renege on the terms of the state 5G network currently being rolled out, which features Ericsson as the sole equipment vendor. As you can see from the comments the story attracted a lot of attention, largely, it seems, from Malaysians unhappy with foreign interests poking their nose into the country’s business.

The apparent reason the US and EU have taken such an interest in the matter concerns the possibility of Huawei being let back into Malaysia’s networks. They have long viewed Huawei kit as a potential backdoor for the Chinese government to exploit for nefarious purposes and so have indicated to the Malaysian government that the reintroduction of Huawei will harm the country’s standing in their eyes.

But Malaysian PM Anwar Ibrahim has long had a problem with the nature of the state 5G network – Digital Nasional Bhd (DNB) – insisting in July 2021, when he was opposition leader, that Huawei could have done the same job as Ericsson for less than half the price. Furthermore global mobile industry trade association the GSMA has recently lobbied against this state network, especially while it uses only one kit vendor.

It wouldn’t have been viable or probably even legal to change the terms of Ericsson’s deal, so it seems almost certain that this new network, expected to commence rollout as soon as next year, will exclude the Swedish vendor, otherwise what would be the point of it? As we know only too well, that leaves few alternatives, one of which is Huawei.

Two of Malaysia’s main mobile operators have spoken out in favour of this second state network, implying they weren’t entirely happy with plan A. Meanwhile Celcom Digi seems to have decided to back out of buying a 25% stake in DNB in favour of supporting the new network instead.

Right now it’s all a bit of a mess. This announcement seems to have been rushed, leaving the wider industry confused. The process by which the kit vendors for this new network is chosen will be heavily scrutinised and you would probably get short odds on Huawei getting the whole gig. If so, Malaysian operators may end up having to offer their subscribers a choice between Ericsson and Huawei networks, which seems absurd.

Malaysia is set to become symbolic of the dynamic being imposed on the telecoms and technology industries by the geopolitical battle of wills between the US and China. This may mark the point in history when we acknowledge the bifurcation of the technology world into US-approved and China-approved ecosystems. How ridiculous that would be.

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