Digital Nasional's single wholesale 5G network to increase GDP by 5% or RM122b in 2030 — report

Digital Nasional's single wholesale 5G network to increase GDP by 5% or RM122b in 2030 — report
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KUALA LUMPUR (Nov 16): Digital Nasional Bhd (DNB) has published a report by Ernst & Young Consulting Sdn Bhd (EY) on the potential future impact on Malaysia’s economy of the deployment of a single wholesale 5G network (SWN) and the adoption of subsequent 5G applications (or use cases).

In a statement on Tuesday (Nov 16), DNB said the report, entitled “Estimating the economic impact of the single wholesale 5G network in Malaysia”, was published in conjunction with the National Digital Economy and 4IR Council meeting chaired by Prime Minister Datuk Seri Ismail Sabri Yaakob recently.

“EY’s first economic model indicated that in 2030, the adoption of 5G technologies will increase Malaysia’s gross domestic product (GDP) by 5% or RM122 billion.

“In addition, 5G will also support the creation of 148,000 jobs across the economy and contribute to an increase in the proportion of high-skilled jobs,” said DNB, which is mandated by the Ministry of Finance to be the single neutral party to undertake an accelerated deployment of the 5G network and infrastructure nationwide.

The report also said that the uplift of GDP and creation of jobs are expected to begin with the roll-out of the SWN in 2021, steadily increasing in the years to 2030 and extending beyond 2030.

“The projected increase in GDP will be driven by increases in efficiency and improvements in productivity that are delivered by a digital transformation enabled by 5G use cases.

“The expansion of the digital industries and the entry of new firms to the market will also increase GDP,” it added.

EY’s second economic model indicated that DNB’s direct investment in the 5G network could generate an additional GDP contribution of RM20.9 billion.

Of this, an estimated RM7.9 billion (or 38%) relates to GDP generated directly by DNB through its expenditure on operating and corporate costs, with RM13 billion generated throughout the supply chain and wider economy.

“At the peak of the network deployment in 2022, DNB’s investment could support over 14,800 jobs across the economy through increased demand placed on the sector’s supply chain. 

“The new single wholesale 5G network developed by DNB will use the latest 5G technology, providing benefits in terms of speed, quality, reliability and capability as compared to the first generation of 5G networks around the world,” said the statement. 

DNB said the network is expected to reach coverage in populated areas at 40% in 2022, 70% in 2023 and 80% in 2024. 

“Thus, the overall impact on the economy will be generated by private investment as the cost of deploying the 5G network will be funded entirely by the private sector through DNB, with no government allocations, funding or guarantees involved,” it said. 

The report also considered the wider socio-economic and environmental benefits that could be realised with the SWN being developed by DNB for 5G services.

It highlighted that the SWN will help bridge the digital divide and provide a more level playing field in terms of connectivity by providing the rakyat with accelerated access to a high-quality broadband connection, especially in rural areas. 

“Bringing connectivity to rural areas will improve inclusivity, provide more opportunities for education, skills development and employment, as well as improve access to essential healthcare services.

“This will help in driving rural economic growth and provide rural businesses with more opportunities to scale up by accessing online markets,” said DNB.