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The Malaysian Communications and Multimedia Commission (MCMC) kicked off 2020 by revealing the spectrum bands for 5G in Malaysia, announced on 31 Dec 2019. Following this, Macquarie Equities Research (MQ Research) met with the MCMC chairman to discuss the 5G direction.
In its report dated 6 Jan, MQ Research highlighted that MCMC’s award proposal is reasonable in keeping the rollout cost down while maintaining Malaysia’s competitiveness in the region. MQ Research remains positive on the Malaysian telco sector with Telekom Malaysia as its top pick.


  • MQ Research met up with the MCMC Chairman, Al-Ishsal Ishak, and his team to discuss the MCMC’s proposed allocation of 5G spectrum announced on 31 Dec 2019. The MCMC’s proposal to award 2 x 30MHz of 700MHz and 100MHz of 3.5GHz spectrum to a consortium via a beauty contest is, in MQ Research’s view, a sensible way to keep 5G rollout costs down and, at the same time, achieve the national agenda of highspeed connectivity to maintain Malaysia’s competitiveness in the region.
  • Operators will now have to assess their ideal consortium partners and work out the details ahead of submissions later in 1H20. MQ Research’s top pick in the sector remains Telekom Malaysia (TM), whose extensive wireline network places it in a strong position to benefit from the 5G rollout.


  • Consortium to save costs. The sharing of 5G rollout costs via a consortium should save operators significant amounts in capex. MQ Research has currently built in RM100-200m in additional capex for 5G into its assumptions for mobile operators post 2020 for 5G. MQ Research believes a consortium type model will allow this figure to hold assuming a more aggressive rollout plan. Ultimately, MQ Research expects 5G rollouts to be focused on rural broadband, enterprise users and selective high-density high data use areas, ie, key metropolitan areas.
  • Partners and their models the key variable. The key issue that will be addressed in coming months will be which operators will team up to bid for the spectrum. While Maxis and Celcom have announced a 5G collaboration, MQ Research believes their limited fibre footprint will require a wireline operator, to keep costs down. Note, that less than 40% of Malaysian BTSs are fibrerised at this point – which has an impact on actual speeds experienced by consumers (Average 23.3Mbps, according to Ookla’s Nov 19 Global speed tests). MQ Research initial discussions with operators suggest that discussions on the consortium model have been very preliminary, thus far.
  • Apparatus assignment caps upfront costs. The MCMC chose to provide the 5G spectrum on an AA to minimise upfront costs to operators. Under the AA model, operators will pay a fee for spectrum based on the number of sites using it. There may be an option later on to convert this to a spectrum assignment model.
  • Balance spectrum? The MCMC will evaluate options on the allocation of the balance of 15MHz of 700MHz and 300MHz of 3.5GHz spectrum at a later date, with one option to provide it to another consortium once usage takes off.


MQ Research remains constructive on the Malaysian telecoms sector with TM as its top pick in the sector. For Malaysia (only) mobile exposure, MQ Research’s preference remains with Maxis over DiGi.
Source: Macquarie Research - 7 Jan 2020
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