T Saravanan, CEO of the Federation of Malaysian Consumers Associations (Fomca), said the profit-driven motives of the network provider may widen the connectivity gap between urban and rural areas.
“There is a significant risk that the dual network plan will see rural areas left behind as the second network provider may prioritise setting up infrastructure in economically viable urban areas.
“This could exacerbate the digital divide, leaving rural communities with poorer connectivity and fewer opportunities for development, education and economic growth,” he told FMT.
In 2021, Malaysia introduced a plan for Digital Nasional Berhad (DNB), a state-owned agency, to control the entire 5G spectrum, allowing various carriers to use its infrastructure.
DNB, however, faced scrutiny due to its monopoly, with critics arguing that a single-network model stifles competition and innovation.
In May last year, Putrajaya agreed to shift to a dual-network model, contingent on DNB achieving 80% coverage in populated areas. DNB has surpassed the target, reaching 81.5% coverage as of April this year.
Saravanan called for a stringent regulatory framework to be drawn up which obliges network providers to undertake nationwide coverage of their services.
“If the second network operates without strict standards and oversight, service quality might not improve, as there would be no enforced benchmarks.
“Given the current issues with 5G service quality, especially in rural areas, these measures are more critical than ever,” he said.
Saravanan said rural areas have historically faced challenges in accessing high-quality network services, adding that ongoing monitoring and reporting would be essential to address these concerns.
Economist Goh Lim Thye from Universiti Malaya agreed, saying rural areas could end up being underserved, as was the case during the 4G rollout when the telecommunications industry was dominated by a few major players.
“The telcos were slow to roll out services to rural areas because these regions were less profitable due to lower population density and higher infrastructure costs.
“A study by the Malaysian Communications and Multimedia Commission showed that broadband penetration in rural areas was only 50%, compared to 85% in urban areas,” he said.
Goh suggested that the government provide incentives to encourage telcos to invest in infrastructure for rural areas.
Recently, Machang MP Wan Ahmad Fayhsal Wan Ahmad Kamal called for internet access to be treated as a public utility and a human rights issue.
“The Covid-19 pandemic exposed how vulnerable we were, especially in the rural areas of Sabah, Sarawak and Kelantan. Internet connectivity was at the mercy of our telcos,” he said in an episode of the PODaBOOM podcast.
Wan Fayshal said any refusal on the part of telcos to set up infrastructure in unprofitable areas would severely impact rural communities. He said it would prevent these communities from using e-banking services and leave students unable to apply for enrolment in universities.
The Bersatu Youth chief added that the responsibility of providing such services falls squarely on the government, not private companies.