U Mobile: Putting aside Vincent Tan, S'pore, Istana, and politics

The announcement of U Mobile being awarded the second 5G network came as a surprise. 

It is taken that Huawei will enter the 5G market and allowing government initiative DNB as lone network for 5G is considered risky in the event something goes wrong with the sole national 5G network. 

The question is who will be Huawei's partner?

All along, there is this widely held belief that it should be Maxis. Google news on Huawei, Maxis and there is a long list of announced collaborations that goes back to the time of DNB inception and as early as 2019. 

Perhaps, that was the reason Maxis enquired to know the rationale for the second 5G award to announce they will engage MCMC. Subsequently they will consider their options. 

Talk is rife that Mahathir-aligned Maxis (by virtue of Ananda Krishnan and son Mokhzani as Chairman) would buy into U Mobile. One should be reminded that Maxis did not agree to join the DNB network initially, which U Mobile, YTL and Telcom was part off. 

Both Maxis and DigiCelcom were reluctant but subsequently joined the DNB network.  

Second 5G network

When the Unity Government came to being, it was decided that there should be a second 5G network and a beauty contest was held. That was one explanation claiming to come from Ministry of Finance to deny the second 5G award was not kosher. 

The market talk of hanky panky happenings in the done-in-a-hurry DNB deal to appoint Erikson during Muhyiddin's premiership and Tengku Zafrul's at Finance. 

The name Erikson conjures up memory of Opcom being the sole suppliers of optic cable by virture of all the telco's cable requirement was tailored to Erikson cable's specification. 

And, Rocky Bru hinted of five new "billionaire cronies" from the 5G network back in 2021.   

So lets not overly politicise and take side on the award of the Second 5G. Otherwise, few new "billionaire cronies" and DNB officials may end up getting dragged in for questioning together with politicians.

They  could be personalities associated with critics of U Mobile. Time wasted instead of just continuing business as usual. 

Negative sentiment 

The critics against the second 5G award can be summarised by Zaid Ibrahim's cynical and somewhat common Malaysian rhetoric in his Facebook message below: 

Actually, the negative sentiment against the Second 5G can be zeroed in on Vincent Tan.

Nothing to hide public disdain for his past association with Dr Mahathir as crony/proxy via Berjaya Group or his current association with PMX's former Political Secretary, Farhasy Salvador Wafi who is Chairman of 7-Eleven or to the Muslim, his business interest in gambling.

Well, if that is the argument, so do Maxis owner Ananda who has business interest in number forecasting Pan Malayan Pool and horse racing. 

Then came the issue of Singapore's Temasik subsidiary Straits Mobile Investment Limited owning 48.3% in U Mobile. 

The usual ultra Melayu sentiment against Singapore was repeated, but none queried to wonder how an American-aligned Singapore willing to get in bed with Huawei, the China telco much envied and maligned by the West?

Anyway the Singapore issue can be considered buried since they are willing to sell down the shares. 

Will Maxis, whose argument against U Mobile was its size, capability and capacity somewhat along new blog Politiconomi arguments here, be taking up that stake? 

Finally, it come down to the 3R issue of 22.3% personal stake of Agong @ Sultan of Johor. 

No one dare to be explicit about it. Mahathir-diehard Perkasa President lightly brushed the issue with the claim and police report that public is confused by the association of Agong with U Mobile. Such naivety.

The more brave ones covertly viral the constitution excerpt below:

Perhaps, the intention is either to create impression that Maxis and DigiCelcom could not match the influence of Agong's 22.3% stake in U Mobile or anti-Forest City Mahathir throwing stones while hiding his hands.

Nevertheless, the Sultan is merely a passive investor and legally speaking does not have any executive role or represented on the Board of Directors. Thus there is no enforceable breach of the Constitution. 

In all fairness, his Majesty had long been a passive investor in U Mobile. His initial equity was 5% before raising it to 10% in 2015, 9 years ago. The earlier investment was longer.

Understandably, it is not easy to convince sceptics. 

This is Malaysia and naturally all blame directed towards politicians. Its a never ending affair.

MCMC explained 

MCMC has reasoned their decisions [read on X here], but the sceptics will remain.

There were a total of four bids submitted by CelcomDigi, Maxis, U Mobile and TM, and it was widely expected that one of the two biggest telcos would have the highest chance of winning. 

The expected did not turn out to be so. It was somewhat of a David and Goliath situation, but the media and sosmed are not in the usual stance of being on the side of the underdog.  

To be fair to MCMC, there is basis to consider the quality of service and customer satisfaction factors. Read public comment below:

 

The sentiment against the major telcos has been for quite a while. 

Industry shake-up

Initially, Celcom under Tajudin Ramli started with the sole intention and nation building aspiration for national connectivity. He was able to pursue such lofty ideals because they were no competitor. 

Then Maxis was brought in by Mahathir and suspected was his. They entered the market for the sole purpose of money and were allowed to merely pursue the urban market. 

Slowly Celcom was placed at a disadvantage and Maxis assumed the market leadership without the need to take up social responsibility and have any nation building aspiration. All new entrants foresaken the rural and partly, the suburban market.

And Tajuddin was subsequently taken out of the game by Nazir Razak's CIMB, Azman Yahya's Danaharta and Azman Mokhtar's Khazanah Nasional at Mahathir's insistence.

Upon being market leader, Maxis slackened. While Celcom continue to languish under Khazanah management that it need to merge with Digi. 

Both had the attitude to not invest in expanding network and upgrade technology unless given monopoly or government cough money. So it is only fair that someone new enter the market to shake up Maxis and the new Celcom, DigiCelcom to get things done. 

PAS can initiate a boycott against U Mobile. 

If U Mobile is able to be more rakyat friendly and think outside the normal box of the existing monopolist to make it more affordable for consumer and better quality of coverage, nothing can stop them. 

From a humble beginning, U Mobile was able to provide the cheapest telco services. Just like Maxis shaken Celcom, it is high time someone new shake the market. 

What goes around, comes a round.

All about the consumers

How U Mobile intend to do it - be it through collaborations or what not makes no difference. At the end of the day, consumers call the shot.

As Liyana Marzuki puts it, this is a game of elephant vs elephant and its not for normal mortals to get involved. What is important is the consumers. 

If Agong's or Singapore's equity are issues, both could sell-down their stake for PNB and together with EPF could take up to 20-25%. Non-issue!

One former telco man described the telco business as a supplier dictate industry. Those capable of spending money, keeping up with the technology, and maintaining financial viability in fulfilling consumers need will survive. 

MCMC have made it clear that this is a private sector initiative and no public money involved. 

If U Mobile slackened, be reminded that Meta, Foxconn and Starlink are willing to provide 5G services for free. Both DNB and U Mobile can be wiped out. 

Consumers have neither the loyalty nor patience for excuses and to wait. Malaysia have been left behind on 5G for too long. Laos is already well ahead of us!