Swapping model from SWN to DWN for 5G rollout may cost government billions of ringgit and court time, say sources

KUALA LUMPUR, Feb 28 — The federal government may face a tremendous amount of litigation and compensation costs reaching billions of ringgit should it decide to swap out the current Single Wholesale Model (SWN) model for the proposed Dual Wholesale Model (DWN) for the rollout of Malaysia’s 5G network, sources say. 

It is understood by Malay Mail that a large number of contracts would have to be broken should the Cabinet elect to give in to the proposal by Malaysia’s big four telcos — Celcom, Digi, Maxis and U Mobile — to establish the DWN alongside Digital Nasional Berhad (DNB), which operates the SWN model. 

Several sources with knowledge of the contracts have said that a significant component of the contracts is dependent on Malaysia rolling out a SWN — which would spell disaster for many of the companies who are already contracted by DNB. 

Late last year, all four major telcos in Malaysia recommended that an additional 5G network run parallel with DNB, adding that two organisations will utilise existing telco assets to coordinate and collaborate in the first 12-18 months to achieve a faster rollout of 5G across Malaysia.

On February 18, the four telco giants submitted a proposal to the government for the establishment of DWN for 5G rollout in the country, viewing the model as a feasible option that leverages the telcos’ capabilities, existing resources — including infrastructure, supply chain and the experience of its technicians.

That same day, Communications and Multimedia Minister Tan Sri Annuar Musa shared that his Ministry and the Ministry of Finance will table a Cabinet Ministers’ memorandum in March to resolve the issues relating to DNB “once and for all”.

Earlier today, Malay Mail sighted a note by DNB that said Putrajaya will decide this Friday if Malaysia continues with the current SWN model or opt for the DWN model. 

The note comes ahead of DNB’s meeting with the Multimedia and Communications, and Finance Ministry this Friday (March 4), saying that should the government choose to move forward with the proposed DWN, it would mean significant delays of the implementation of the 5G network in Malaysia.