Putrajaya assures bumi firms will benefit from 5G rollout
PARLIAMENT | Putrajaya today assured that bumiputera firms will benefit from the country's 5G rollout through state-owned Digital Nasional Bhd (DNB)
Minister in the Prime Minister's Department (Special Functions) Abdul Latiff Ahmad (PN-Mersing) pointed out to similar models such as the MRT1 and MRT2 projects.
"It worked for the rail projects. The model and the system...
PARLIAMENT | Putrajaya today assured that bumiputera firms will benefit from the country's 5G rollout through state-owned Digital Nasional Bhd (DNB)
Minister in the Prime Minister's Department (Special Functions) Abdul Latiff Ahmad (PN-Mersing) pointed out to similar models such as the MRT1 and MRT2 projects.
"It worked for the rail projects. The model and the system are the same.
"We need to ensure that the model is transparent. Qualified bumiputera firms will be provided a greenlane. Not just anyone," he told the Dewan Rakyat today.
DNB had promised that 60 percent of the RM11 billion raised by the government for the project will awarded through contracts to bumiputera firms.
Latiff (above) was responding to Mukhriz Mahathir (Pejuang-Jerlun) who said he was unconvinced of DNB's 60 percent pledge.
He explained to Mukhriz that the alternative - having the private sector handle the 5G rollout - would not assure the same impact.
500,000 jobs
Earlier, Latiff explained that Teraju - an agency under the Prime Minister's Department tasked with empowering bumiputera businesses - will work with DNB to ensure 60 percent bumiputera participation.
To a question from Shabudin Yahaya (PN-Tasek Gelugor), Latiff said bumiputera firms will be involved in engineering, civil and structural works for the project.
"It will create 500,000 jobs and we will ensure a lot of companies benefit. We also expect RM7 billion in investments by the time 5G is implemented in 2025," he said.
In February 2020, the Pakatan Harapan administration had mandated that companies vying for 5G licences form a consortium to build and own the infrastructure.
The idea was for the licensees to share the infrastructure cost, thus making it cheaper and faster to deploy 5G services across the country.
This plan was stillborn as the Harapan administration collapsed by the end of that month.
Bond market
A year later, the Muhyiddin Yassin administration upended the plan and mandated that Finance Ministry-owned DNB will undertake the deployment of 5G infrastructure and network.
DNB has since appointed Stockholm-based Ericsson as its exclusive partner for 10 years.
To finance the project, Putrajaya will raise RM11 billion through the bond market.
Critics have claimed that Putrajaya's involvement in the project was a recipe for disaster because it would cause a monopoly that other Asean countries were trying to avoid.
In February, Fitch Solutions, the research arm of credit rating agency Fitch Group, said a centrally-planned 5G network would likely drive wholesale costs up, hurt operator margins, and hamper the development of 5G services in the country,
"The decision to award 5G spectrum and infrastructure buildout rights to a government-owned entity is likely to drive wholesale costs up, hurt operator margins, and hamper the development of 5G services in the country," said Fitch Solutions.
