As Malaysia completes a review of its 5G rollout that could involve Huawei, the EU and the US have warned of security and investment risks.
After Malaysia reviewed an RM11bn ($2.5bn) Ericsson tender to build a state-owned 5G network, US and EU envoys wrote to the government in April. Financial Times saw envoys’ letters.
The 5G study, scheduled by the end of March, will test Prime Minister Anwar Ibrahim’s new government’s capacity to restore stability after years of political instability and balance relations with the West and China.
Huawei, the Chinese technology firm banned by Washington, has fought hard for a place in Malaysia’s network.
US Ambassador to Malaysia Brian McFeeters warned of “national security risks” if Malaysia did not follow its 5G rollout strategy.
“Senior officials in Washington agree with my view that upending the existing model would undermine the competitiveness of new industries, stall 5G growth in Malaysia, and harm Malaysia’s business-friendly image internationally,” he stated in the FT letter.
The US, other nations, and the international business community value fair and transparent review processes and contract integrity. Unfortunately, untrusted vendors also put Malaysia’s infrastructure in danger.
Ambassador and head of the EU delegation to Malaysia Michalis Rokas said any alteration would “likely impact negatively and significantly the contractual terms agreed upon at the time of the launch of the open tender.” European corporations “place high value on clear policy direction,” and the EU has spent over €25bn in Malaysia.
“Any change will not only impact the selected contractor, but is likely to affect more widely Malaysia attractiveness as a business destination for EU investors, in particular on high technology sectors that rely on trusted 5G vendors,” he said.
Experts claim the Ericsson contract has allowed Kuala Lumpur to create a single government-owned network at a cheaper cost and faster performance. In other nations, governments auction spectrum to mobile companies to create networks.
Malaysia, one of the region’s slowest 5G adopters, promises 80% population coverage by 2023. However, the administration stated it exceeded 50%.
According to two sources, Malaysia may launch a second 5G network next year after the study. The individuals added that Huawei and Nokia, who lost to Ericsson in the open bidding, have been pressing for such a position.
Experts fear that a second 5G network might increase costs and inefficiency.
It’s uncommon. “It wasn’t just a shot across the bow—both envoys said they want to discuss it further,” said one telecommunications law expert participating in the conversations. “The review is causing domestic and international concern.”
Ericsson and the US embassy withheld comment. Huawei, the EU, and Malaysia’s communications ministry declined to comment.
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