Wholesale 5G company books Ericsson to build $2.6bn network in Malaysia

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A new 5G wholesale network aims to cover 80% of the 32 million population of Malaysia by 2024.

Government-owned special purpose vehicle (SPV) Digital Nasional has awarded the 11 billion ringgit (US$2.64 billion) construction contract to Ericsson, overturning previous expectations that Huawei would win the deal.

The cost covers tower leasing and fibre, said The Edge, a business publication covering Malaysia and Singapore, last night.

“This is big news,” telecoms analyst John Strand told Capacity. “Telenor has a 100% ZTE network with Digi, and the SPV was rumoured to award the contract to Huawei.”

Only last week Capacity reported that Axiata and Telenor had signed an agreement to merge their Malaysian mobile operations, Celcom Axiata and Digi.

The new Celcom Digi, once shareholders and regulators have approved that deal, will be one of the companies to use the new 5G infrastructure.

Another operator, Maxis, had already appointed Huawei as a 5G supplier, almost two years ago.

Malaysia’s Finance Ministry set up Digital Nasional as recently as March 2021, with the mandate to roll out a single wholesale 5G network.

“Through Malaysia’s 5G network, we will empower Malaysians to embrace the new digital economy,” said Digital Nasional. “We will be able to benefit enterprises, businesses and consumers nationwide.”

The company is recruiting what it calls “the best Malaysian talents” to build the 5G network.

“We seek to develop a diverse collective of talented individuals to create a vibrant, welcoming, high-performing team, where diversity of thought and expertise will give us our edge.”

The government had expected the bill for the project would be over $1 billion more than the $2.6 billion quoted. Communications and multimedia minister Saifuddin Abdullah said in February that the budget was $3.7 billion. The Edge said: “Ericsson has undertaken to arrange financing for the supply, delivery, and management of the entire 5G network.” He indicated that Telekom Malaysia and Huawei were both expected to play a "very, very significant role" in its development. 

Now Digital Nasional “will securitise future cash flows from its wholesale business via Sukuk [Islamic finance] programmes to finance all other network operating expenditure and to repay all the vendor financing arrangements”, according to local reports. 

Ericsson will design and develop the 5G network, including core, radio access and transport network as well as the operation and business support systems (OSS/BSS) and managed services.

Digital Nasional said of its recruitment programme: “We encourage our people to truly be themselves at work, regardless of age, beliefs, ethnicity, gender or identity.”