The Potential Impact of 5G to the Digital Economy


During a two-day Strategic Communications Roadshow in Tanjung Manis and Sarikei in November 2021, Minister of Communications and Multimedia YB Tan Sri Datuk Seri Panglima TPr Annuar Haji Musa revealed that, among others, Sarawak will become one of the earliest states in Malaysia to be in the country’s 5G network rollout by 2022.

This is part of the State being given priority under both the Malaysia Digital Economic Blueprint (MyDIGITAL) and the National Digital Network (JENDELA), which the minister noted is due to the Borneo Islands as an increasingly important strategic area in terms of geopolitics and connectivity, and Sarawak’s capability of generating environmentally-friendly electricity which is necessary to establish and power data centres.

In total, the Malaysian Government has allocated RM4.09 billion to Sarawak for the latter’s transition to 5G under JENDELA by the Ministry of Communications and Multimedia, promising enhanced and broader Internet coverage and facilities for businesses to thrive and the people to enjoy in a post-COVID-19 digital economy.

The transition from 3G and 4G to 5G is necessary to keep pace with technological advancement and accelerate socio-economic development through the digital economy. Image from Pixabay

Given Sarawak’s challenging topography and wide population distribution, the State is expected to have its 4G network coverage expanded and strengthened through the implementation of Phase One of JENDELA to ensure a more seamless and prepared switch to 5G in Phase Two.

Nationwide, the Government intends to achieve an estimated 80 per cent of populated areas with 5G network coverage by the end of 2024, focusing on urban and rural areas as well as industrial parks.

Infographic from Internet Innovation Alliance (

The transition from 3G and 4G to 5G is crucial to accelerate a country’s socio-economic development through the digital economy by ensuring not only the adoption of advanced Industry 4.0 technologies such as the Internet of Things, artificial intelligence and augmented reality within economic sectors, but also the adaptation of technological and economic changes resulting from the COVID-19 pandemic by the people.

“The 5G technology then becomes a unifying force to consolidate these different innovations as higher digital connectivity becomes critical in opening up opportunities for businesses and enterprises as well as countries to maintain economic growth and competitiveness,” states the Malaysian Investment Development Authority (MIDA).

Infographic from Digital News Asia (

MIDA cites a study carried out by the Malaysian Institute of Economic Research that notes the prospects of 5G-related economic activities to Malaysia’s economic growth, with an additional RM12.7 billion to the national gross domestic product (GDP) between 2021 and 2025.

“In 2025 alone, the contribution of 5G to the Malaysian GDP is expected to reach RM5.3 billion in subsequent years, the share of 5G, and 5G-enabled Industry 4.0 activities in the Malaysian GDP is projected to continuously rise,” it adds.

National efforts to boost connectivity and narrow the digital divide through JENDELA and MyDIGITAL serve to support Sarawak’s own digital economy agenda and its Post-COVID-19 Development Strategy 2030, as it hopes to become a developed state by 2030.

One of the 5G Smart Poles – a 5G use case – installed in the Openlab’s compound. Photo from SDEC

It is already exploring the potential that 5G technology could bring in advancing its economic sectors through its 5G test-bed at the Centre of Excellence for Digital Economy Openlab at Centre of Technical Excellence (CENTEXS) in Kuching.

Established in 2020, it is an open innovation platform for start-ups, researchers and solution providers that features the development of 5G use cases, including AirGro Smart Farming, 5G Smart Pole and a miniature robotic arm as part of Sarawak’s investment in Industry 4.0 technology.

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