Malaysian telco U Mobile is reportedly set to deploy between 5,000 and 7,000 5G sites across the country as it prepares to take on the role of the country’s second 5G operator, and is likely to collaborate with other telcos in the process.
U Mobile hasn’t yet officially revealed its roll-out plan, but according to a report from The Edge Malaysia on Friday, RHB Research – citing industry sources – said that U Mobile is planning to upgrade existing 4G sites and install new 5G sites to roll out its network.
RHB also said it expects U Mobile to team up with other operators and share infrastructure, which would not only speed up site deployments, but also save anywhere from RM3 billion (US$665.3 million) to RM4 billion in capex.
Before it received the nod from the Malaysian Communications and Multimedia Commission (MCMC) last November to become the country’s second 5G operator to take on Digital Nasional Berhad (DNB), U Mobile signed a deal with rival telco CelcomDigi in February 2024 to share 100 multi-operator core network sites, as well as collaborate on developing use cases for 5G-Advanced (5G-A). In July 2024, U Mobile also established a strategic 5G backhaul partnership with Time dotCom.
U Mobile also spent July forming strategic partnerships with eight state-backed network facility provider companies (SBCs) from the PPIT Consortium to streamline the 5G rollout process. U Mobile also signed a similar deal with Axiata-owned Edotco that month.
RHB noted that U Mobile will likely fund all this via a mix of vendor financing, deferred payment options, and debt funding. U Mobile announced in late July last year that it has signed an MoU with AmBank Group, who will provide financing solutions to cover the cost of rolling out the second 5G network.
One of the controversies over awarding the second 5G network to U Mobile was how a relatively smaller telco would be able to cover the rollout cost. In November, according to a separate Edge Malaysia report, CIMB Securities said in a research note that U Mobile would need to invest up to MYR3 billion over 18–24 months to cover 80% of the population, and MYR1 billion a year after that, which is higher than U Mobile’s average capitalised capex of MYR500 million per annum between FY2014 to FY2023.
U Mobile responded that it has “robust financial backing from its shareholders, financial institutions such as UOB, CIMB and AmBank, as well as strategic vendor partners who enable the telco to continuously innovate to stay competitive and to meet network deployment targets.”