Malaysia Needs Two 5G Networks, but U Mobile Cannot Do It Alone

Malaysia’s decision to establish a second nationwide 5G network was controversial, but the underlying objective remains valid.

A country should not depend indefinitely on a single national mobile infrastructure provider. While Digital Nasional Berhad’s single wholesale network enabled Malaysia to deploy 5G quickly, concentrating almost the entire industry on one network also created a potential single point of failure.

An extended technical disruption, cybersecurity incident, equipment problem or operational failure affecting DNB could potentially disrupt 5G services across several Malaysian telecommunications companies simultaneously.

Two independently operated 5G networks can provide Malaysia with greater network diversity and resilience. They can also give telecommunications companies a choice of wholesale providers instead of leaving the entire industry dependent on one infrastructure owner.

For Malaysian consumers, the second network should eventually provide greater choice in coverage, service quality, network technology and commercial packages.

However, supporting a dual-network model does not mean Malaysia should ignore the financial and operational challenges facing U Mobile.

U Mobile’s Financial Position Cannot Be Ignored

It has been reported that U Mobile recorded a net loss of RM1.6 billion for the financial year ended December 31, 2025, while its accumulated losses reached approximately RM6.29 billion.

These are substantial figures for a company expected to finance, deploy and operate a second nationwide 5G network.

U Mobile had already reported a net loss of RM722 million for the preceding financial year, compared with a RM102 million net profit in 2023. Its latest reported loss therefore cannot simply be dismissed as a minor fluctuation.

Building a national mobile network requires continuous capital expenditure. Beyond installing radio equipment, U Mobile must pay for tower access, fibre backhaul, spectrum, network maintenance, indoor coverage, power, security, staffing and future technology upgrades.

U Mobile secured RM4.3 billion in financing from four Malaysian banks in November 2025 to support its 5G deployment. That is significant, but debt financing is not the same as having a financially strong strategic partner prepared to provide long-term capital and absorb losses during the network’s development period.

The concern is particularly relevant following the restructuring of U Mobile’s ownership. Singapore-based ST Telemedia, which is owned by Temasek Holdings, agreed in 2024 to reduce its indirect interest in U Mobile to 20%. U Mobile consequently no longer has the same level of backing from a large foreign telecommunications and infrastructure group.

U Mobile may have access to bank financing, vendors and Malaysian shareholders, but its ability to fund several years of network expansion while managing its existing losses remains a legitimate question.

This does not mean the company cannot succeed. Infrastructure investments often require many years to generate adequate returns. However, U Mobile must demonstrate a credible path towards sustainable cash flow, rather than expecting its appointment as the second 5G network operator to guarantee commercial success.

The Second Network Needs More Partners

The second network cannot depend primarily on U Mobile’s own retail subscribers.

Its long-term viability will depend heavily on wholesale customers, enterprise users and other telecommunications companies carrying substantial traffic over the network.

U Mobile has made progress. It appointed Huawei and ZTE as its principal 5G technology partners, with Huawei handling much of Peninsular Malaysia and ZTE supporting the deployment in East Malaysia.

It also signed a RM2.4 billion, 10-year agreement to use Telekom Malaysia’s nationwide fibre infrastructure for backhaul.

Eastel became U Mobile’s first announced 4G and 5G wholesale access customer under a five-year agreement in October 2025. TM subsequently signed a three-year wholesale contract with U Mobile in February 2026 and began the process of ending its existing DNB wholesale arrangement. VIBE Mobile has also joined U Mobile as a mobile virtual network operator.

These agreements are important, but U Mobile still needs considerably more traffic and more major partners.

Small mobile virtual network operators can contribute subscribers, but they are unlikely to provide the scale generated by Malaysia’s largest telecommunications companies.

CelcomDigi Is the Missing Major Partner

The most obvious potential partner is CelcomDigi.

When U Mobile was selected to develop Malaysia’s second 5G network, there was an expectation that other telecommunications companies would be able to participate in or obtain wholesale access from the new network.

CelcomDigi would have been a particularly important partner because of its large subscriber base, extensive 4G network and national infrastructure footprint.

However, CelcomDigi continues to provide 5G services through DNB. Unlike TM, it has not announced a transition to U Mobile’s network.

This leaves U Mobile without the traffic of Malaysia’s largest mobile operator, while DNB continues to serve major operators including CelcomDigi and Maxis.

CelcomDigi cannot be compelled to move merely to improve U Mobile’s financial position. It must choose the network that offers the best combination of coverage, capacity, reliability, pricing and commercial certainty for its customers.

Nevertheless, closer cooperation between U Mobile and CelcomDigi should remain an industry objective.

This cooperation does not necessarily require CelcomDigi to abandon DNB completely. A commercially negotiated arrangement could allow CelcomDigi to use U Mobile’s network in selected areas, for additional capacity, enterprise services, network resilience or future multi-operator arrangements.

Such an agreement would generate meaningful wholesale traffic for U Mobile while giving CelcomDigi an alternative 5G infrastructure provider.

More importantly, it would demonstrate that Malaysia genuinely has an open dual-network market, rather than two largely separate networks divided between fixed groups of operators.

Two Networks Must Also Support Each Other

Having two 5G networks does not automatically eliminate a single point of failure.

If customers and telecommunications companies are permanently tied to only one network, an outage affecting that network could still leave them without 5G service.

Malaysia should therefore consider frameworks that allow operators to use the alternative network during major outages or national emergencies.

National roaming, emergency roaming or reciprocal wholesale arrangements could allow traffic to be temporarily transferred between DNB and U Mobile when one network experiences a serious disruption.

There would be technical, regulatory and commercial challenges. The two networks use equipment supplied by different vendors and may operate different core-network arrangements. Capacity would also need to be reserved to prevent the surviving network from becoming overloaded during an emergency.

Even so, genuine national resilience requires more than constructing a second set of base stations. It requires practical mechanisms through which one network can provide limited support when the other fails.

That should be part of Malaysia’s wider dual-network policy.

Consumers Must See Real Benefits

The second network should not be judged purely by how quickly U Mobile reaches a particular coverage target.

Consumers should eventually see measurable improvements, including better indoor coverage, fewer congested locations, more consistent speeds and a wider choice of service providers.

Competition should also extend beyond retail prices.

A price war would make it even more difficult for operators to recover their network investments. More sustainable competition would involve service quality, security, enterprise capabilities, network priority, customer support and specialised 5G applications.

At the same time, Malaysians should not be expected to finance two expensive networks without receiving better services.

If both networks cover mainly the same commercially attractive urban areas while leaving coverage gaps elsewhere, infrastructure duplication will have delivered little national value.

Regulators should therefore evaluate the two networks based on coverage quality, redundancy, utilisation, wholesale participation and consumer outcomes, rather than promotional claims alone.

U Mobile Must Prove the Business Case

Malaysia has valid reasons for supporting a dual 5G network.

A second network reduces dependence on a single infrastructure provider, creates an alternative for telecommunications companies and can strengthen national communications resilience.

The more difficult question is whether U Mobile has the financial strength and industry support required to operate that network sustainably.

Its RM4.3 billion financing package, technology agreements and partnerships with TM, Eastel and VIBE Mobile provide a foundation. However, its reported RM1.6 billion annual loss and RM6.29 billion accumulated losses cannot be overlooked.

U Mobile needs more wholesale customers, greater enterprise adoption and closer cooperation with the country’s established telecommunications companies.

CelcomDigi, in particular, remains the major missing piece.

The success of Malaysia’s second 5G network should not be treated as U Mobile’s responsibility alone. The government and industry must create an environment in which both networks can compete while still cooperating on coverage, wholesale access and national resilience.

Malaysia needs a second 5G network, but it also needs that network to remain financially sustainable.

Without stronger partners and sufficient traffic, the second network risks becoming another expensive infrastructure project supported by debt.

With the right commercial partnerships, transparent oversight and mechanisms for network redundancy, it could instead become the competitive and resilient alternative Malaysia was promised.