The Malaysian government has awarded Sweden’s Ericsson an 11 billion ringgit ($ 2.6 billion) contract to design and build its 5G telecommunications network, snubbing Chinese competitor Huawei Technologies.
Thursday’s announcement comes as Malaysia aims to make 5G connectivity available by the end of the year and cover 80% of the population by 2024. For starters, services are to be deployed in Kuala Lumpur and Putrajaya as well as the Cyberjaya multimedia hub by 2021.
Local media outlet The Edge reported in April that Digital Nasional – a finance ministry entity responsible for owning and operating the 5G network – had invited eight vendors to participate in the tender: Ericsson, Huawei, ZTE, Cisco, NEC, Nokia, Samsung and FiberHome.
Malaysia has not shown the same aversion to Huawei as the United States and several other Western countries, which have prevented it from bidding on government contracts and in particular 5G projects due to concerns about security and links. with Beijing. In February, Malaysia decided to partner with Huawei to set up a cybersecurity lab.
Earlier in October 2019, Huawei was named a 5G hardware supplier for Maxis, Malaysia’s largest mobile provider by subscribers. As part of the deal, the Chinese company was to provide 5G radio equipment, services and expertise for the Maxis network.
But the Maxis deal was made on the assumption that 5G spectrum allocations would be made to individual telecom companies and the choice of hardware suppliers would be up to the respective spectrum holders. Prime Minister Muhyiddin Yassin’s government, however, has moved away from the traditional allocation method by establishing Digital Nasional to own 5G assets and spectra.
In a statement released Thursday, Digital Nasional said Ericsson will take charge of the design and development of the country’s end-to-end 5G network. “Ericsson is committed to making arrangements to fund the provision, delivery and management of the entire 5G network,” said Digital Nasional. The agency said it would securitize future cash flows from its wholesale business through Islamic bonds to fund all other network operating expenses and repay all supplier financing agreements.
The Ringgit 11 billion deal includes tower leasing and fiber leasing, more than 60% of which will benefit local entrepreneurs over the next 10 years, Digital Nasional said.
Ericsson is also engaged in value creation activities in Malaysia, through knowledge building and technology transfer. These efforts are estimated at 4 billion ringgit over the term of the contract.
“The faster connectivity speeds, ultra-low latency and greater bandwidth of 5G for mobile broadband will enable Malaysia to quickly bridge the digital divide,” said Borje Ekholm, Chairman and CEO of Ericsson. “To this end, we will collaborate with Digital Nasional on a 5G experience and innovation lab. “
Ericsson currently deploys 86 live 5G networks and has been involved in Malaysia since 1965.
Source: https://asia.nikkei.com/Spotlight/5G-networks/Malaysia-picks-Ericsson-over-Huawei-to-build-5G-network
