Khairy, the former science, technology and innovation minister, and Shahril Hamdan, Umno’s former information chief, said the move, which might involve China’s Huawei, would lead to increased costs due to the need for additional infrastructure.
Khairy said the government might be setting Digital Nasional Bhd (DNB) up to fail or at least not succeed as intended.
“This could become a self-fulfilling prophecy,” he said in the latest episode of the Keluar Sekejap podcast.
“We’ve highlighted that this structure isn’t optimal and it might not succeed, causing losses for the government and taxpayers.”
In September last year, Prime Minister Anwar Ibrahim said a dual 5G network would allow for more effective participation by Huawei, balancing both Western and Eastern technology.
Despite some Western countries urging Malaysia to adhere to its original plan, the government announced that a second 5G network would operate from this year to break the monopoly of a single state-run network.
In 2021, Malaysia introduced a plan for DNB, a state-owned agency, to control the entire 5G spectrum, with various carriers using the infrastructure for mobile services.
DNB partnered with Swedish telecom giant Ericsson to deploy Malaysia’s 5G network.
Shahril said DNB’s business model hinged on a single wholesale network.
“Switching to two networks undermines the business, likely leading to losses for DNB,” he said.
Shahril also said policy changes would be blamed if DNB were to face challenges.
“When decisions are made for geo-economic or geopolitical reasons, taxpayers will bear some costs,” he said.
Meanwhile, Khairy also asked why the government would want to introduce a second network, potentially causing DNB to fail and burden taxpayers with losses.
“I’ve heard reports that RM900 million might be written off due to unused equipment designated for the current frequency but now allocated to the second network,” he said.
Khairy added that to maintain the 100Mbps guarantee, DNB might need an additional RM1.6 billion due to spectrum allocation changes.
Previously, opposition MP Wan Saiful Wan Jan had criticised the plan for a second 5G network, warning it could put mobile network operators (MNOs) at risk of legal issues and conflicts of interest.
Wan Saiful, the Tasek Gelugor MP, highlighted Section 133 of the Communications and Multimedia Act 1998, which prohibits actions that diminish competition in the communications market by companies licensed by the Malaysian Communications and Multimedia Commission (MCMC).
Putrajaya had mandated all telecommunications companies to acquire a stake in DNB, established as a wholesaler of 5G services to all MNOs in Malaysia. CelcomDigi Bhd, Maxis Bhd, U Mobile Sdn Bhd and YTL Communications Sdn Bhd confirmed they had met conditions to collectively own a 65% stake in DNB, with the government owning the remaining 35% stake.
Wan Saiful warned that as these telcos would now be competing to develop the second 5G network, it might lead to conflicts of interest.
Machang MP Wan Ahmad Fayhsal Wan Ahmad Kamal also criticised the move as a blatant contravention of the law, urging Putrajaya to halt plans for a second 5G network to avoid a conflict of interest among MNOs and DNB.
In May last year, Putrajaya agreed to introduce a second 5G service provider, contingent on DNB achieving 80% coverage in populated areas. DNB surpassed this target in December and by April, its 5G coverage stood at 81.5%.