The report examines the fundamental difference between single whole network and network sharing among operators that can result in contrasting outcomes

10 December 2021, Kuala Lumpur – GSMA Intelligence today is sharing further insights about single wholesale networks (SWNs) in its spotlight report, “Single wholesale networks and network sharing: sharpening discussions on the 5G repercussions.”

In the report, GSMA has outlined how network sharing agreements among operators around the world are being used to address concerns on the costs involved in rolling out 5G, sustainability issues and the focus on creating green, energy-efficient networks.

GSMA also examined why voluntary Network Sharing Agreements provide a viable alternative to a mandated 5G SWN. Competing network providers have greater scope for product differentiation by offering a better service than their competitors (e.g., faster speeds and higher reliability), which can deliver significant benefits to consumers in the longer term from innovation (including innovation to increase efficiency and reduce costs), greater choice, and stronger incentives for price competition.

The report also outlined why SWN can reduce innovation because of the reduced incentives for the operators for deploy networks, and the potential increase in complexity of delivering innovative solutions particularly in the enterprise segment.

Julian Gorman, Head of Asia Pacific with GSMA, reiterates that Malaysia has a thriving mobile sector, but the current 5G rollout plan remains unproven. Malaysia’s existing licensing framework provides a competitive dynamic, with a landscape of four national mobile network operators (MNOs) as well as mobile virtual network operators (MVNOs) that has resulted in significant growth and innovation in mobile applications and services over the years. Malaysian operators made significant investments in their 5G capabilities in anticipation of regulators making 5G spectrum available to switch on their networks.

There are now 172 live 5G networks in 68 countries worldwide – the technology is ready and can be deployed rapidly. As noted earlier in September, GSMA remains concerned with the unproven SWN model for 5G that will threaten Malaysia’s digital competitiveness.

Despite a clear history of the risks associated with monopoly service provision, some policymakers in the 4G era have started to consider that a move to a SWN could achieve greater coverage compared to models that rely on traditional network deployment. This has not been the case.

There has been numerous evidence that SWNs have not been successful in delivering the “better and cheaper” services that were promised. Only three SWNs are currently operational, in Mexico, Belarus and Rwanda. Each face distinct challenges, including rollout speed, service quality and profitability. The SWN in Mexico sought bankruptcy protection earlier in the year. Three other major projects in Russia, Kenya and South Africa were all abandoned, after impacting digitalisation efforts in these countries.

GSMA believes that a pragmatic approach is needed by all parties to ensure that Digital Nasional Berhad (DNB) delivers the next generation connectivity that Malaysia needs. In Ericsson, DNB has an established partner with a proven track record of delivering best-in-class 5G services. The political determination to launch DNB can’t be denied, however there is a lack of clarity on DNB’s mandate and the regulatory framework under which it will be governed.

To mitigate the risks of DNB, identified in an independent report commissioned by GSMA, three things need to be ensured:

  • Clarity of DNB’s mandate and regular monitoring of its performance against its strategic objectives
  • Introduce a fit for purpose wholesale regulatory regime at the same time as the DNB starts its commercial operations
  • Retain flexibility to allow alternative delivery options for 5G networks and services in Malaysia