EMIR Research Response to DNB’s 5G Voyage of Semantics Acrobatics
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Hand holding digital tablet with creative city and 5G internet network on starry night sky background. Web speed and abstract concept. Double exposure
DNB officials still avoid answering the fundamental questions posed to them repeatedly by EMIR Research in the series of six articles. Instead, the entity attempts to bring the discussion level down to the semantic acrobatics while twisting, citing out of context and deliberately misrepresenting EMIR research perspective which is based solely on data, telecom industry specifics, and economics.
Although DNB-Plum Consulting's joint response ("Should M'sia abandon its SWN 5G rollout?” on March 3, 2022) attempts to expose a lack of understanding on behalf of EMIR Research on how SWN operates, it instead demonstrated its own inability to read correctly or study the EMIR Research perspective sufficiently.
EMIR Research not only never proposed "that there should be two rather than one wholesale network, with each one run by a consortium of mobile operators”, but it outspokenly opposed both models. This is because data, telecom industry specifics and economics support the notion that Single Wholesale Network (SWN) and Dual Wholesale Networks (DWN) alike lead to a highly undesirable monopolistic effect on the telecom industry leading to low competition and, as a result, low innovation and quality of the internet.
DNB-Plum gets carried away explaining at length how the "DNB approach is different and is not network sharing”, which is pure semantics and totally does not address the key issue that EMIR Research continuously emphasises. When individual MNOs are not given the freedom to deploy their own active network equipment (and DNB admits "there will be one set of electronics... to carry data between base stations and end-user devices”), we have a big problem—MNOs can no longer compete on the quality of network which is the key differentiating feature and all other features, including differentiation "on retail end” which DNB keeps emphasising are only secondary to and dependent on the network quality.
Note that GSM Association, in its response to DNB, argumentatively echoes EMIR Research’s concern about this delinking of network ownership from service delivery and its various negative impacts on the industry and end consumers.
For DNB-Plum’s information, EMIR Research is fully aware of and also acknowledged in its writings that under DNB, the core networks will be from a range of equipment suppliers (at least until the implementation of 5G stand-alone solution). However, this does not help the DNB’s argument because no matter how superior equipment you have at the core network level, it can do very little if the active network equipment provides substandard quality and is entirely out of MNO’s control.
At least, intelligently enough, DNB-Plum’s response acknowledges that "DWN would not lead to increased competition, spurring innovation at the infrastructure level” and that under DWN "each consortium is a monopoly provider”. What more SWN?! And in line with the very fundamental economic principle, if there is no competition on the active network infrastructure, there will be no service quality or price reduction.
This is where EMIR Research would like to reiterate the important global experience we absolutely cannot ignore. The unanimously mediocre, at best, performance in terms of network quality and nationwide penetration by all the countries that adopted SWN-model (government-led or MNO consortium-led alike) for their 4G rollout is glaring in comparison with the nations who did not (see "Malaysian 5G Rollout "Unanswerable” Questions” for case study analysis and data visualisation by EMIR Research).
These 4G SWN-adoption cases are failures due to the monopolistic effect and the delinking of network ownership from service delivery! And 5G, due to the specificity of its use cases, especially for enterprise solutions (the most critical segment for Industry 4.0), will require even closer cooperation between network and end-user devices.
Brunei 4G SWN experience and Plum’s quoted rural shared networks in some parts of the world are rather interesting and unique case studies. They are unique in that sense that they cannot be considered out of their important context — a small geographic area with a small population size, and EMIR Research has already emphasised this in its writings, in case Plum has missed it.
Learning from this experience, none of the countries already rolling out the 5G network use the SWN model on a national scale (out of 70 countries thus far as reported by GSM Association, "GSMA responds to Ong Kian Ming's questions on 5G roll-out” on February 19, 2022). None!
Russia has been initially debating over 5G SWN mainly due to its 5G spectrum scarcity. However, like all the other countries that faced this challenge, Russia has finally decided (later is better than never) to free up the band to be still able to proceed with the beauty contest. This is because spectrum ownership by MNOs is synonymous with the active network equipment ownership by MNOs, which is tightly linked with competition, innovation and quality!
Now, this is the trend, while nationwide SWN is more a dusted fad unless DNB-Plum is trying to redefine the word "trend”.
At the same time, there is also a massive global trend recently towards sharing the passive network infrastructure elements, which EMIR Research, in its writing, have clearly put as the way forward to bring 4G and 5G services to our rural areas. However, as EMIR Research reiterated many times, DNB in its current structure does not address it at all. More so, it keeps avoiding talking about this and the Universal Service Provider fund that would be more than sufficient to address this key problem.
DNB-Plum’s whole passage on supply-driven demand versus demand-driven 5G rollout is another round of advanced semantic acrobatics.
First, they wrongly claim that "Emir Research suggests that there are two approaches to delivering 5G which they term "demand-driven” and "supply-driven””. What EMIR Research consistently emphasised is that precisely what DNB now finally admits itself, with the Plum’s help though,—"all mobile deployment is based on predicted demand”, ok, "an informed variant of being supply-led”, if DNB wants to put it that acrobatically.
At the same time, EMIR Research has never suggested that "5G should be deployed only after the demand for it has emerged”. Instead, EMIR Research has only emphasised that given Malaysia’s level of 5G preparedness, or rather unpreparedness, it makes no sense to rush and push 5G at that grandiose scale as suggested and urged by DNB.
No matter what you call it, technology adoption is critical for the sustainability of the MNOs’ business model. Therefore, all what EMIR Research requested DNB on this front is precisely to substantiate its speculations with solid demand estimates with real figures. Where is the technical needs analysis for 5G in Malaysia's rural and urban areas? How many citizens or business entities can readily take on 5G as it becomes available? In which areas? And how does this stand vis-à-vis the proposed cost and pricing? Where are all these crucial inputs to inform the efficiency of the DNB’s "informed variant of being supply-led” 5G rollout model?
Also, Emir Research has never argued "that there is little point in deploying 5G now in Malaysia because it lacks the digital skills and ecosystem needed to benefit from the advantages that it brings”.
However, it is a solid fact consistently supported by the global data (see "Malaysian 5G Rollout — Exhibit "A” for Misplaced Solution” on February 10, 2022, for EMIR Research analysis) that to date, Malaysia continues consistently (year-on-year) lose the critical digital skills and ecosystem needed to benefit from the advantages offered by 5G on a large scale. This is why what EMIR Research has said is that adoption of 5G technology is going to be patchy and, at best, enterprise-solution driven and therefore, DNB’s pitch of delivering 80% 5G coverage by the end-2024 makes no economic sense but sounds like a tremendous waste of resources that are direly needed now to fix our other digital elements.
And it is not that "the EMIR Research’s argument is flawed”, but Plum’s assertion is rather simply naive to think that "all the elements of the ecosystem and digital skills needed” will be delivered and fall in place magically just because we have Malaysia’s Digital Economy Blueprint. Malaysia has never been short of blueprints but extremely poor in implementation, especially of recent. In fact, Malaysia's Digital Economy Blueprint has been there already for two years. Have we seen any impact on our digital ecosystem for these two years? The data points to the opposite (see "Malaysian 5G Rollout — Exhibit "A” for Misplaced Solution” from February 10, 2022).
Believing that Malaysia's digital ecosystem will thrive just because we have Malaysia’s Digital Economy Blueprint is akin to another naive DNB’s assertion "DNB will be properly governed due to the existence of Board of Directors”.
Plum completely ignores EMIR Research’s important emphasis made that there must be independent monitoring (financial, technical etc.) and oversight, given that project costs include sums (reportedly an estimated RM 1 billion) allocated for Malaysian Communications and Multimedia Commission (MCMC), the body regulating DNB, and Tenaga Nasional Berhad (TNB).
TNB’s biggest shareholder is Khazanah Nasional Berhad, owned by the Ministry of Finance Incorporated, while the Ministry of Finance wholly owns DNB.
How will this ecosystem ensure proper good governance and integrity are in place? What are the checks and balances, oversight, and monitoring mechanisms on DNB’s key performance indicators (KPIs), financial, legal, and technical matters? The appointment of the Board of Directors does little (if nothing) as far independent external oversight goes.”
Also, TM (Telekom Malaysia) had inked an RM2 billion deal to provide fibre leasing service to DNB. The government's investment holding arm, Khazanah Nasional Berhad, also has a majority stake in TM.
MCMC is an agency under the Ministry of Communications and Multimedia, thus representing the government and not a "neutral” entity under the whole "government-led” DNB model.
In short, DNB is government-led, with a government-linked ecosystem and beneficiaries. Does Plum Consulting seriously not see a problem in the ecosystem mentioned above to provide sufficient independent oversight?
As for Plum’s statement that comparing DNB’s vulnerable governance structure with 1MDB is a "false comparison”, here are some points for Plum Consulting to digest:
Although DNB-Plum Consulting's joint response ("Should M'sia abandon its SWN 5G rollout?” on March 3, 2022) attempts to expose a lack of understanding on behalf of EMIR Research on how SWN operates, it instead demonstrated its own inability to read correctly or study the EMIR Research perspective sufficiently.
EMIR Research not only never proposed "that there should be two rather than one wholesale network, with each one run by a consortium of mobile operators”, but it outspokenly opposed both models. This is because data, telecom industry specifics and economics support the notion that Single Wholesale Network (SWN) and Dual Wholesale Networks (DWN) alike lead to a highly undesirable monopolistic effect on the telecom industry leading to low competition and, as a result, low innovation and quality of the internet.
DNB-Plum gets carried away explaining at length how the "DNB approach is different and is not network sharing”, which is pure semantics and totally does not address the key issue that EMIR Research continuously emphasises. When individual MNOs are not given the freedom to deploy their own active network equipment (and DNB admits "there will be one set of electronics... to carry data between base stations and end-user devices”), we have a big problem—MNOs can no longer compete on the quality of network which is the key differentiating feature and all other features, including differentiation "on retail end” which DNB keeps emphasising are only secondary to and dependent on the network quality.
Note that GSM Association, in its response to DNB, argumentatively echoes EMIR Research’s concern about this delinking of network ownership from service delivery and its various negative impacts on the industry and end consumers.
For DNB-Plum’s information, EMIR Research is fully aware of and also acknowledged in its writings that under DNB, the core networks will be from a range of equipment suppliers (at least until the implementation of 5G stand-alone solution). However, this does not help the DNB’s argument because no matter how superior equipment you have at the core network level, it can do very little if the active network equipment provides substandard quality and is entirely out of MNO’s control.
At least, intelligently enough, DNB-Plum’s response acknowledges that "DWN would not lead to increased competition, spurring innovation at the infrastructure level” and that under DWN "each consortium is a monopoly provider”. What more SWN?! And in line with the very fundamental economic principle, if there is no competition on the active network infrastructure, there will be no service quality or price reduction.
This is where EMIR Research would like to reiterate the important global experience we absolutely cannot ignore. The unanimously mediocre, at best, performance in terms of network quality and nationwide penetration by all the countries that adopted SWN-model (government-led or MNO consortium-led alike) for their 4G rollout is glaring in comparison with the nations who did not (see "Malaysian 5G Rollout "Unanswerable” Questions” for case study analysis and data visualisation by EMIR Research).
These 4G SWN-adoption cases are failures due to the monopolistic effect and the delinking of network ownership from service delivery! And 5G, due to the specificity of its use cases, especially for enterprise solutions (the most critical segment for Industry 4.0), will require even closer cooperation between network and end-user devices.
Brunei 4G SWN experience and Plum’s quoted rural shared networks in some parts of the world are rather interesting and unique case studies. They are unique in that sense that they cannot be considered out of their important context — a small geographic area with a small population size, and EMIR Research has already emphasised this in its writings, in case Plum has missed it.
Learning from this experience, none of the countries already rolling out the 5G network use the SWN model on a national scale (out of 70 countries thus far as reported by GSM Association, "GSMA responds to Ong Kian Ming's questions on 5G roll-out” on February 19, 2022). None!
Russia has been initially debating over 5G SWN mainly due to its 5G spectrum scarcity. However, like all the other countries that faced this challenge, Russia has finally decided (later is better than never) to free up the band to be still able to proceed with the beauty contest. This is because spectrum ownership by MNOs is synonymous with the active network equipment ownership by MNOs, which is tightly linked with competition, innovation and quality!
Now, this is the trend, while nationwide SWN is more a dusted fad unless DNB-Plum is trying to redefine the word "trend”.
At the same time, there is also a massive global trend recently towards sharing the passive network infrastructure elements, which EMIR Research, in its writing, have clearly put as the way forward to bring 4G and 5G services to our rural areas. However, as EMIR Research reiterated many times, DNB in its current structure does not address it at all. More so, it keeps avoiding talking about this and the Universal Service Provider fund that would be more than sufficient to address this key problem.
DNB-Plum’s whole passage on supply-driven demand versus demand-driven 5G rollout is another round of advanced semantic acrobatics.
First, they wrongly claim that "Emir Research suggests that there are two approaches to delivering 5G which they term "demand-driven” and "supply-driven””. What EMIR Research consistently emphasised is that precisely what DNB now finally admits itself, with the Plum’s help though,—"all mobile deployment is based on predicted demand”, ok, "an informed variant of being supply-led”, if DNB wants to put it that acrobatically.
At the same time, EMIR Research has never suggested that "5G should be deployed only after the demand for it has emerged”. Instead, EMIR Research has only emphasised that given Malaysia’s level of 5G preparedness, or rather unpreparedness, it makes no sense to rush and push 5G at that grandiose scale as suggested and urged by DNB.
No matter what you call it, technology adoption is critical for the sustainability of the MNOs’ business model. Therefore, all what EMIR Research requested DNB on this front is precisely to substantiate its speculations with solid demand estimates with real figures. Where is the technical needs analysis for 5G in Malaysia's rural and urban areas? How many citizens or business entities can readily take on 5G as it becomes available? In which areas? And how does this stand vis-à-vis the proposed cost and pricing? Where are all these crucial inputs to inform the efficiency of the DNB’s "informed variant of being supply-led” 5G rollout model?
Also, Emir Research has never argued "that there is little point in deploying 5G now in Malaysia because it lacks the digital skills and ecosystem needed to benefit from the advantages that it brings”.
However, it is a solid fact consistently supported by the global data (see "Malaysian 5G Rollout — Exhibit "A” for Misplaced Solution” on February 10, 2022, for EMIR Research analysis) that to date, Malaysia continues consistently (year-on-year) lose the critical digital skills and ecosystem needed to benefit from the advantages offered by 5G on a large scale. This is why what EMIR Research has said is that adoption of 5G technology is going to be patchy and, at best, enterprise-solution driven and therefore, DNB’s pitch of delivering 80% 5G coverage by the end-2024 makes no economic sense but sounds like a tremendous waste of resources that are direly needed now to fix our other digital elements.
And it is not that "the EMIR Research’s argument is flawed”, but Plum’s assertion is rather simply naive to think that "all the elements of the ecosystem and digital skills needed” will be delivered and fall in place magically just because we have Malaysia’s Digital Economy Blueprint. Malaysia has never been short of blueprints but extremely poor in implementation, especially of recent. In fact, Malaysia's Digital Economy Blueprint has been there already for two years. Have we seen any impact on our digital ecosystem for these two years? The data points to the opposite (see "Malaysian 5G Rollout — Exhibit "A” for Misplaced Solution” from February 10, 2022).
Believing that Malaysia's digital ecosystem will thrive just because we have Malaysia’s Digital Economy Blueprint is akin to another naive DNB’s assertion "DNB will be properly governed due to the existence of Board of Directors”.
Plum completely ignores EMIR Research’s important emphasis made that there must be independent monitoring (financial, technical etc.) and oversight, given that project costs include sums (reportedly an estimated RM 1 billion) allocated for Malaysian Communications and Multimedia Commission (MCMC), the body regulating DNB, and Tenaga Nasional Berhad (TNB).
TNB’s biggest shareholder is Khazanah Nasional Berhad, owned by the Ministry of Finance Incorporated, while the Ministry of Finance wholly owns DNB.
How will this ecosystem ensure proper good governance and integrity are in place? What are the checks and balances, oversight, and monitoring mechanisms on DNB’s key performance indicators (KPIs), financial, legal, and technical matters? The appointment of the Board of Directors does little (if nothing) as far independent external oversight goes.”
Also, TM (Telekom Malaysia) had inked an RM2 billion deal to provide fibre leasing service to DNB. The government's investment holding arm, Khazanah Nasional Berhad, also has a majority stake in TM.
MCMC is an agency under the Ministry of Communications and Multimedia, thus representing the government and not a "neutral” entity under the whole "government-led” DNB model.
In short, DNB is government-led, with a government-linked ecosystem and beneficiaries. Does Plum Consulting seriously not see a problem in the ecosystem mentioned above to provide sufficient independent oversight?
As for Plum’s statement that comparing DNB’s vulnerable governance structure with 1MDB is a "false comparison”, here are some points for Plum Consulting to digest: