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Malaysia
This Week in AsiaEconomics

Forget Britain’s Huawei fumble, China’s helping Malaysia find its 5G spot

  • Malaysia prepares to embrace the 5G revolution as it eyes the use of the technology in education and farming
  • Its approach mirrors that of China’s and relies on Chinese equipment

Reading Time:5 minutes
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Malaysia has backed Huawei despite global fears over the firm’s links to China’s military. Photo: EPA-EFE
Tashny Sukumaran
Nearly 30 years ago, Malaysia set its sights on achieving self-sufficiency and full industrialisation by 2020. Although it has not yet reached some of its targets, there have been several major developments: a change in government for the first time since independence; reforms resulting in improving institutional scores on international indices; and now, the promise of commercial 5G technology.
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Malaysia last week launched demonstration projects, dubbed the Langkawi Trials after Prime Minister Mahathir Mohamad’s constituency where they were staged, which will be rolled out in the third quarter of this year.

“The convergence of 5G and different industrial sectors such as agriculture, education, health care, manufacturing, smart transport and tourism presents new opportunities for industries, society and individuals to advance their digital ambitions and deliver new and better services,” Mahathir said at the trials.

He added that the technology was in line with the government’s philosophy of “Shared Prosperity”, which aims to minimise inequality and bolster inclusive growth.

But despite the swift deployment of 5G technology, it could be another decade before the full economic impact is observable, according to a report by the Malaysian Institute of Economic Research (MIER). In the short term, 5G would help create about 39,000 new jobs and bring about an estimated economic benefit of 12.7 billion ringgit (US$3.1 billion) from 2021-25, the report said.

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Malaysia’s approach to 5G mirrors that of China – it offers airwaves for networks at little cost to carriers, forgoing revenue and reducing the investment required. This approach differs from that of nations such as Germany and the US, where money is raised through spectrum auctions.
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