Last December, Prime Minister Anwar Ibrahim ordered a review of the RM11 billion 5G network contract awarded by Digital Nasional Bhd (DNB) – a special purpose vehicle (SPV) created under the finance ministry – to Ericsson under the previous administration. He said this was necessary to ensure that relevant parties had followed strict procedures.
The Financial Times today reported that envoys to Malaysia from the US and EU wrote to the government last month after it decided to review a decision to award Ericsson the tender to build the state-owned 5G network. The envoys’ letters have been seen by the Financial Times.
The Financial Times reported that Huawei, the Chinese equipment maker blacklisted by Washington, had lobbied heavily for another chance at a role in building Malaysia’s 5G network. Huawei and Finland’s Nokia were beaten by Ericsson in the open tender process.
“Senior officials in Washington agree with my view that upending the existing model would undermine the competitiveness of new industries, stall 5G growth in Malaysia, and harm Malaysia’s business-friendly image internationally,” said US ambassador to Malaysia, Brian McFeeters, in the letter viewed by the Financial Times.
“The US and other countries prioritise a fair and transparent review process and contract sanctity, as does the international business community. Allowing untrusted suppliers in any part of the network also subjects Malaysia’s infrastructure to national security risks.”
Meanwhile, EU ambassador to Malaysia Michalis Rokas said any change would “likely impact negatively and significantly the contractual terms agreed upon at the time of the launch of the open tender”.
He noted the EU had more than €25bn (RM122.3 billion) invested in Malaysia, and European companies “place high value on clear policy direction”.
Any change “will not only impact the selected contractor, but is likely to affect Malaysia’s attractiveness as a business destination for EU investors, particularly on high technology sectors that rely on trusted 5G vendors,” he wrote.
In January, Bloomberg reported communications and digital minister Fahmi Fadzil as saying that the government was expected to finalise the review by the first quarter of this year. Ericsson is currently the sole vendor to roll out the country’s 5G network.
The Financial Times said Ericsson and the US embassy declined to comment. Huawei, representatives for the EU and Malaysia’s communications and digital ministry did not respond to a request for comment.
It was previously reported that the government is mulling the introduction of a second 5G network in January next year as part of a move to dismantle monopolies and promote competition.