U Mobile’s appointment as 5G provider complies with licence conditions - Fahmi

He said the government, through the Malaysian Communications and Multimedia Commission (MCMC), had implemented a thorough selection process, considering both technical and commercial aspects to identify the mobile network operator (MNO) tasked with rolling out the country's second 5G network.

"This selection was conducted through a 'beauty contest' process--essentially, a tender process--not a direct award," he said during the Minister's Question Time session in the Dewan Rakyat today.

Fahmi outlined that the choice of the second 5G network provider was based on a combination of factors, including the MNO's business and technical plans, customer satisfaction and complaint records, and its performance in executing other infrastructure projects.

"This also includes contributions to Universal Service Provision (USP) projects, such as JENDELA Phase One and the 4G upgrade project, which align with MCMC's commitment to improving user experience and service quality," he added.

He assured that regulatory commitments had been established to ensure compliance with the required standards and said that MCMC would monitor these closely.

Any non-compliance would result in regulatory and enforcement actions.

"The general foreign equity holding limit for individual Network Facility Provider (NFP) and Network Service Provider (NSP) licences is 49 per cent, with a minimum of 30 per cent bumiputera ownership.

"This requirement is stipulated through special licence conditions. Currently, foreign equity in U Mobile remains within the compliance scope set by the conditions of its licence," he added.

Fahmi also noted that U Mobile had committed, in a media statement issued on Nov 2, 2024, to reduce foreign ownership to 20 per cent in order to ensure greater control by Malaysians and encourage participation from local investors.

He was responding to a question from Hassan Abdul Karim (PH-Pasir Gudang) regarding the rationale behind the federal government's decision to grant a licence to U Mobile to implement the second 5G network, considering that 48.28 per cent of the company's equity is held by the Singapore-based Straits Mobile Investment Pte Ltd.

In response to a follow-up question from Datuk Wan Saifulruddin Wan Jan (PN-Tasek Gelugor) about U Mobile's representation on the board of Digital Nasional Bhd (DNB), Fahmi said that as part of the conditions, MNOs are required to hold shares in DNB.

"This shareholding will also entitle them to board seats. In terms of governance, there is no issue with the shareholding structure or corporate governance in this regard," he said.

-- BERNAMA