LETTER | Malaysia’s 5G rollout: The audacity of impunity

LETTER | In light of the ongoing revision of Digital Nasional Berhad (DNB)’s contentious 5G rollout model, for the benefit of the decision-makers and public, Emir Research continues to revisit some of the cornerstone aspects of the debate, which, to date, DNB has failed to address in a credible and fully transparent manner.

In a previous article, we tried to decipher DNB’s misleading claims, albeit through their paid UK-based consulting company Plums Consulting, about their ability to provide lower costs to end customers.

But whenever there are camouflaged costing acrobatics, there are simply bound to be serious governance red flags.

DNB’s response to public criticism of its highly vulnerable governance ecosystem, so far, has not gone further than assuring its “proper governance” is ascertained by the existence of the Board of Directors (BoD) as well as close scrutiny and extensive regulation by the Malaysian Communications and Multimedia Commission (MCMC).

Figure 1 below is an embodiment of how, sometimes, a picture is worth a thousand words. The figure illustrates the true worth of claims by DNB, the government-led entity with a government-linked oversight ecosystem and beneficiaries, of its constant independent oversight and critical review.

1MDB also had a BoD with very big names. Has anyone in that BoD been persecuted for not fulfilling their fiduciary responsibilities and duties? The climate of impunity has been flourishing in Malaysia for some time now.

1MDB also had “independent” auditors, regulators, and other governance ecosystem actors to monitor and scrutinise. Nevertheless, we all saw what happened.

As for DNB, do note that MCMC is an agency under the Ministry of Communications and Multimedia, thus representing the government and not a truly “neutral” entity under DNB’s overall “government-led” model.

And, speaking of regulators, one of the principles of good governance states not to appoint former officials of regulatory agencies to the BoD or senior management team in a similar industry due to the potential of exerting influence over decision-making by the regulators who ought to be independent.

We saw this as a big problem when former US FDA (Food and Drug Administration) senior officers were appointed by big pharmaceutical companies like Pfizer to advance their corporate objectives, not necessarily in the nation’s and people’s best interest.

Nevertheless, in a gross violation of this vital principle, Mohamed Sharil Tarmizi, former chairperson and chief executive of the MCMC, was appointed chairperson of the Board Tender Committee for DNB.

This is despite his 11 years of service in key positions in MCMC: senior officer during MCMC’s formative years 2000-2006, chief operating officer during 2009-2011, and chairperson and chief executive during 2011-2014.

And DNB appears to hide behind MCMC a lot to justify its viability, “progress”, etc. with still no publicly available verified data to credibly judge their viability or progress.

In fact, it is beginning to look more and more that it is DNB that sets the tone for what MCMC have to comply with and not vice-versa.

For example, DNB has been forcing Malaysia’s major telcos into its access agreement throughout the entire 2022 with an eternally revolving deadline (from June 30, 2022 to July 8, 2022 to Aug 31, 2022, to Sept 30, 2022, to Oct 30, 2022.)

This is despite the absence of a regulatory framework by MCMC for the 5G Access Agreement covering areas like Service Level Agreement (SLA), pricing, etc. which was supposed to be ready only in December 2022. Sign first, framework later. The audacity of impunity!

The situation around DNB’s discretionary-reported, unverified-by-regulators, 5G rollout’s “progress” is even more impudent, causing fair reprimand by the Communications and Digital Minister.

According to the Jendela Q3 2022 Report, as of Sept 30, 2022, DNB has completed 1,915 sites (54.4 percent) out of the planned 3,518 sites for 2022 while significantly underperforming for the third quarter.

During a press conference held on Dec 7, 2022, Communications and Digital Minister shared that DNB has deployed 2,715 5G cell sites as of Oct 31, 2022 with 36 percent 5G population coverage.

However, already on Dec 12, 2022, DNB reported on its website that “its 5G network is ahead of schedule” and “will exceed 40 percent coverage of populated areas nationwide by December 2022”.

And on Jan 2, 2023, an arbitrary post appeared informing that DNB “has achieved almost 50 percent coverage of populated areas (Copa) with some 3,900 sites as at end-2022”.

To present it graphically (Figure 2), in the last three months alone, DNB has built as many cell sites as in the previous nine months, but the latest figure is not verified by the MCMC, according to the minister.

And, despite this firm reprimand by the minister, DNB still has not pulled down this information from their website - the climate of impunity.

Nevertheless, if this is true that DNB is on schedule (or even “ahead of it”) by the end of 2022, as it claims, despite significantly lower numbers reported by officials as of the end of October, more serious questions arise - how is the audit being done?

Are the sites counted actually ready for service and of acceptable quality (built, cleaned of installation defects, running on permanent rather than temporary equipment - such as Genset and using microwave links, accepted into network operations, optimised and handed over from Ericsson to DNB)?

Is there performance criteria set by MCMC for DNB to fulfil, such as, for example, transmission speed? When a base station is commissioned, do we have test results? Was test acceptance done? Was it documented?

After all, MCMC had its own challenges in providing proper oversight for the previous generation networks. A “minute by minute, transaction by transaction” regulation, as claimed by DNB, is simply a humourless joke.

Furthermore, let’s not forget the timely CelcomDigi coming on board DNB as an equity-holder and service subscriber after months and months of resistance under the previous leadership of Izzaddin Idris (personally groomed and selected as successor by the previous highly respected CEO of Axiata group).

However, after the surprising, (or maybe not surprising, keeping Figure 1 in mind) resignation of Izzaddin from his position as Axiata president and group CEO and Celcom chairperson effective May 31, 2022, and the appointment of two foreign nationals as acting CEOs effective June 1, 2022 and again former twice chairperson of MCMC as DNB’s interim chairperson effective June 2, 2022 things in Celcom have started to move smoothly for DNB.

But here comes another question. Is that sudden jump in cell sites by DNB that we observe not due to existing infrastructure sharing with CelcomDigi? Is this not the reason why the cell site construction boost by DNB also coincides with the redirection of its deployment efforts to other states, which were initially intended for 2023 and beyond?

We already know that infrastructure sharing would be done by telcos even in the absence of DNB. However, in the context of this discussion, this is a critical governance issue that needs to be clarified.

After all, the cell sites publicly counted by DNB in its reports are budgeted under their claimed costs and financed by sukuk guaranteed by the government or, simply put, people’s money.

Clearly, with all the above, the public should be very worried, especially given that Malaysia is still struggling to repay the enormous debts incurred in the 1MDB scam, the biggest kleptocracy case in the history of the US and possibly the world.

Maybe it is time for DNB‘s CEO, board, and other officials to appear in front of a parliamentary select committee to explain what is really going on. Before it is too late.

The climate of arrogated impunity must end in Malaysia. Perhaps this is the start. The audacity of hope for the nation and the people.

RAIS HUSSIN is the president and CEO of Emir Research, a think tank focused on strategic policy recommendations based on rigorous research.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.