Malaysia chooses Ericsson to replace Huawei to build 5G network

The Malaysian government has awarded Sweden’s Ericsson an 11 billion ringgit ($2.6 billion) contract to design and build its 5G telecommunications network, ousting Chinese competitor Huawei Technologies.

The announcement was made on Thursday (July 1) as Malaysia aims to provide 5G connectivity by the end of the year and cover 80% of the population by 2024. First, the services will be rolled out in Kuala Lumpur and Putrajaya as well as the Cyberjaya multimedia center in 2021.

Local media outlet The Edge reported in April that Digital Nasional – an organization under the Ministry of Finance that is entrusted with owning and operating 5G networks – has invited eight vendors to participate in the competition. Contractors: Ericsson, Huawei, ZTE, Cisco, NEC, Nokia, Samsung and FiberHome.

Malaysia does not have the same aversion to Huawei as the US and some other Western countries, which have blocked the company from bidding for government contracts and especially 5G projects because of security concerns and linkages. with Beijing. In February, Malaysia decided to work with Huawei to build a cybersecurity laboratory.

Previously, in October 2019, Huawei also became the 5G hardware supplier for Maxis, Malaysia’s largest mobile service provider by number of subscribers. Under the agreement, the Chinese company will provide 5G radio equipment, services and expertise to the network.

But the agreement with Maxis was reached on the condition that the allocation of 5G spectrum would be given to individual telecom companies and the choice of hardware supplier would be up to the respective spectrum holders. However, the government of Prime Minister Muhyiddin Yassin has changed the traditional method of allocation by establishing Digital Nasional to own the assets and 5G spectrum.

In a statement on Thursday, Digital Nasional said Ericsson would handle the design and development of the country’s end-to-end 5G network.

“Ericsson has committed to financial arrangements for the provision, delivery, and management of the entire 5G network.” Digital Nasional said. The agency says it will secure future cash flows from its wholesale business through Islamic bonds to fund all other network operating expenses and reimburse all agreements. supplier sponsorship.

The 11 billion ringgit deal includes tower leasing and fiber optic cable leasing, of which more than 60% will benefit local contractors over the next 10 years, Digital Nasional said.

Ericsson is also committed to value creation activities in Malaysia, through knowledge building and technology transfer. These efforts are estimated to be worth 4 billion ringgit over the life of the contract.

“The faster connection speeds, ultra-low latency, and greater bandwidth of 5G for mobile broadband will help Malaysia quickly close the digital divide.” Ericsson Chairman and CEO Borje Ekholm said. “To this end, we will partner with Digital Nasional on 5G innovation and experience.”

Ericsson currently deploys 86 live 5G networks and has been in business in Malaysia since 1965.