U MOBILE'S SELECTION AS SECOND 5G PROVIDER SET TO BOOST COMPETITION IN MALAYSIA'S TELECOM SECTOR - ANALYST

By Fatin Umairah Abdul Hamid

KUALA LUMPUR, Nov 4 (Bernama) -- U Mobile Sdn Bhd is envisioned to compete more robustly and narrow the gap with other major players in the country, creating a more equitable landscape in Malaysia's telecommunications sector.

Mercury Securities head of research Toh Woo Kim said the transition from a single wholesale network (SWN) to a dual 5G network model will inject significant competition into the market.

He opined that greater transparency around the 5G tender criteria and rationale for selecting U Mobile would have been beneficial for market confidence, as it could help ease regulatory uncertainties in Malaysia’s telecom sector.

“These uncertainties are likely to persist until investors gain more clarity on the second 5G network rollout, particularly on potential partners for U Mobile,” Toh said when contacted by Bernama.

On November 1, the Malaysian Communications and Multimedia Commission (MCMC) announced that U Mobile would roll out Malaysia’s second 5G network. 

The regulator stated that it conducted a detailed technical and commercial evaluation to select the mobile network operator (MNO) for this project, aiming to ensure the full benefits of 5G technology reach the public, industry, and nation.

While acknowledging the potential benefits of U Mobile’s selection, Toh cautioned that it remains too early to fully assess the impact of U Mobile as the second 5G network provider.

“Furthermore, we believe it is quite unlikely that U Mobile will undertake the second 5G network build-out on its own. 

“An eventual partnership with either CelcomDigi or TM appears to be the more likely route,” he added.

On November 2, U Mobile, in response to the announcement, said it is excited to collaborate with various stakeholders, including MCMC and other telecommunication companies to deliver world-class 5G advanced services to consumers.

Meanwhile, Kenanga Investment said U Mobile is expected to lead the new network’s rollout, with the possibility of collaborating with other MNOs, pending MCMC's approval.

“We believe this initiative may extend upon U Mobile’s prior collaborations with CelcomDigi. Recall that in July 2024, the two companies, along with ZTE Corporation, successfully achieved Malaysia's first live broadcast powered by 5G advanced technology. 

“Additionally, U Mobile and CelcomDigi share a Multi-Operator Core Network (MOCN) partnership agreement, which includes 100 MOCN sites across Malaysia, with each party contributing 50 sites,” it said in a research note today.

Kenanga noted that while this announcement is a milestone in Malaysia's telecommunications evolution, further details are needed to address ongoing uncertainties.

“Key areas requiring clarification include the specific MNOs that will partner with U Mobile and the partnership terms, the final ownership structure of Digital Nasional Bhd (DNB) — the owner of the first 5G network (NW1) — as well as the coverage and timeline targets for NW2.

“Additionally, there are questions about the financial and operational health of NW1,” it said.

-- BERNAMA