U Mobile, the new Ali Baba contractor for the second 5G network tender?

U Mobile, the new Ali Baba contractor for the second 5G network tender?


November 2, 2024

Vincent Tan's U Mobile won the contract for the second 5G network


The dawn of Malaysia’s 5G future just took a shocking turn. The Malaysian Communications and Multimedia Commission (MCMC) has chosen U Mobile to roll out the country’s second 5G network, a move that was supposed to open up competition and elevate digital infrastructure.

But with so many details cloaked in secrecy, we’re left with one burning question: What is really happening behind closed doors?

The regulator owes it to every Malaysian to walk us through the entire selection process — step by step — and explain why U Mobile, a comparatively smaller player, was deemed the best choice over giants like Maxis and CelcomDigi.

How does U Mobile, which lacks the scale and capacity of its larger competitors, intend to pull off this mammoth task?

Who actually own U Mobile?

Such connections make transparency more than a courtesy; it’s an absolute necessity.

U Mobile outsourcing the heavy-lifting of the work?

The MCMC’s decision to hand the tender for Malaysia’s second 5G network to U Mobile has stirred up more than a few questions. Here’s the curious part: U Mobile, while certainly ambitious, is far from the biggest player in the industry.

Unlike giants CelcomDigi and Maxis, which have built extensive proprietary networks covering the nation, U Mobile operates as a Mobile Virtual Network Operator (MVNO), relying on shared infrastructure rather than its own towers.

This fundamental difference in scale raises serious questions: how can U Mobile, without the deep, independent infrastructure of its rivals, be expected to take on the massive responsibility of deploying Malaysia’s second 5G network?

Yet, almost as soon as the announcement was made, MCMC added an odd caveat — U Mobile could collaborate with other telcos to get the job done. Collaborate? A concession for a multi-billion-ringgit national infrastructure project?

It’s as though MCMC already knew U Mobile couldn’t carry this massive undertaking alone. They seem to be setting the stage for U Mobile to hand off critical aspects of the project to Maxis or CelcomDigi, the very telcos with the size, experience, and resources that the project truly demands.

So why bother giving the tender to U Mobile in the first place? What’s MCMC’s play here?

From the start, it feels like MCMC has been bending over backwards to make this arrangement work, with one foot out the door to let U Mobile “share” its role. In most tender processes, subcontracting is left to the main contractor’s discretion. But here, we have MCMC, the regulatory body, practically dictating that U Mobile can pull in its rivals to help.

What’s really going on? Why does it feel like MCMC is tiptoeing around something, pushing U Mobile forward only to let it lean on the very competition that could have taken on the project directly?

The whole setup has an air of something more calculated, as if there’s a script behind the scenes that we’re not seeing.

Doors slammed shut, access denied

Consider this — the Access and Interconnection Plan (AIP) and tender specs for this second network were not disclosed to the public. Not disclosed! Imagine that.

A monumental project shaping our digital landscape, affecting millions of Malaysians, yet not a single taxpayer, telecom expert, or watchdog agency was given the courtesy of a peek into the specifications.

Digital Nasional Berhad (DNB), Malaysia’s initial 5G provider built on taxpayer money, wasn’t just sidelined but outright denied access to these crucial documents. And it didn’t stop there.

The Minister of Digital himself, the top official responsible for ensuring transparency in our telecommunications sector, made a formal request for access to this information. His request? Denied.

Gobind Sigh Deo, Minister of Digital denied access to the tender details?

And the Ministry of Finance, whose duty is to safeguard public funds? They, too, were left in the dark, never seeing even a fragment of the specs. This isn’t just a little secrecy; it’s an impenetrable wall. And when it comes to a national asset like the 5G spectrum, the stakes are much, much higher.

Forget the dodgy tender process — the real storm is brewing with the second network itself

Let’s pause and consider what this means. The 5G spectrum isn’t just airwaves; it’s a vital, national resource that belongs to every single one of us. DNB, our first 5G provider, was set up as a government entity funded by billions in taxpayer money.

5G tower as provided by DNB.

If DNB suffers from this sudden addition of a second network, the government could be left scrambling to cover its costs — and that scramble, as always, falls on the taxpayer.

Then there’s the billions invested by Government-Linked Investment Companies (GLICs) in the telco sector. Institutions like the Employees Provident Fund (EPF), KWAP, and PNB, holding a combined RM30 to RM40 billion in stocks like Axiata, CelcomDigi, and Maxis, are at risk of seeing the value of these investments take a nosedive when markets open on Monday.

These aren’t just corporate losses; they are direct blows to the wealth of everyday Malaysians. With pension funds on the line, the impact of a second 5G network is as much about livelihoods as it is about digital connectivity.

Unless of course, one of them gets to be U Mobile’s “partner”.

DNB’s investment under threat

DNB has already sunk billions into Malaysia’s 5G rollout, relying on a single-network model to provide affordable and widespread access. The entire project was based on preventing duplicated networks and unnecessary costs.

By introducing a competing network, the government risks undermining this original strategy.

The decision to introduce a second 5G network in Malaysia has raised alarms about potential financial losses for taxpayers, with former minister Khairy Jamaluddin and Shahril Hamdan warning it could set state-run Digital Nasional Bhd (DNB) up for failure.

Khairy Jamaluddin and Shahril Hamdan commented on the 5G second network issue, warning it could set state-run DNB up for failure.

They cautioned that abandoning the single-network model could lead to substantial write-offs, including RM900 million in unused equipment, while DNB might need an additional RM1.6 billion to meet performance targets due to spectrum changes.

Opposition MP Wan Saiful Wan Jan echoed these concerns, highlighting risks of conflicts of interest and legal issues for mobile network operators under the new structure, potentially burdening taxpayers with further losses. DNB has spent RM5 billion on the existing 5G infra borrowing huge sums from the banking system.

Wan Saiful Wan Jan raised the 5G second network issue in parliament.

It’s already struggling to pay of its debts, the second network is a going to be a nail in the coffin. This isn’t a mere strategic shift; it’s a potential financial and legal catastrophe.

A process shrouded in darkness — where’s the accountability?

Now we turn to the MCMC, the supposed guardian of fairness and transparency. How can they defend this selection process as fair when the specs in the AIP remain hidden from stakeholders?

Without the ability to scrutinise these documents, how can we, the public, trust that these criteria were just? This is more than a bureaucratic oversight; it’s a deliberate decision to keep critical information out of reach.

There’s only one way forward — the specs in the AIP must be released to the public. Only then can we dissect the technical aspects, understand the logic behind the requirements, and see for ourselves if the rules were applied impartially.

A grim reminder in a crucial 2025 budget season

All of this is unfolding during the 2025 national budget debate, where lawmakers are discussing fiscal responsibility and the management of public funds. For the government to announce a decision of this magnitude without full transparency is more than just poor timing; it’s a direct affront to every Malaysian demanding accountability from their leaders.

We’re left with a sea of unanswered questions and an eerie sense of déjà vu. Once again, a national project hangs in the balance, with taxpayers on the hook, GLICs under strain, and yet another closed-door decision that impacts the future of our digital economy. We deserve answers, not evasions.

The time for questions is now

Regulators, if you insist this decision was just and fair, open up the specs. Show us the AIP and let us evaluate the criteria that shaped this choice. Explain why a comparatively small player like U Mobile was selected over the nation’s biggest telcos. Demonstrate that Malaysia’s second 5G network rollout isn’t just another case of smoke and mirrors, but a genuine attempt to foster a competitive and transparent digital landscape.

Malaysia deserves nothing less.