Malaysia’s 5G agency, DNB, to be taken up by six telcos

DNB 5G Malaysia
Telecommunications tower with a 5G cellular network antenna agains flag of Malaysia. Image by polack | Bigstockphoto

Malaysia’s Digital Nasional Bhd (DNB), the state-run 5G agency, will see telco players take up stakes in the company, according to sources, after weeks of uncertainty on the matter.

It was reported that a non-binding term sheet had been agreed upon by six telcos, who will also sign a shareholders agreement to take up a stake in DNB early next month. The deadline for telcos to make their decision was yesterday, 30 June.

Anonymous sources told The Straits Times that they are just doing due diligence, which should be completed in two weeks.

Only six of the country’s nine telcos, Celcom Axiata Bhd, Bhd, Maxis Bhd and U Mobile Sdn Bs (CDMU) will take up equal shares in DNB. The government will acquire a 30% stake in the company, with the remaining 60% to be taken up by the private sector.

This will see each of the six telcos taking up a 12% stake in DNB, with an injection of RM500 million from the Ministry of Finance (MoF) for the government’s 30% stake. It may be recalled that previously, Malaysia’s Big Four telcos — Celcom, Digi, Maxis and U Mobile — had insisted on holding a controlling 51% stake in DNB.

In a previous interview, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said that a deadline extension is possible if it is required to tie up loose ends. He said they would consider “early July but no later than that,” while sharing that they are also welcoming new players who may want to join in and offer 5G under the single network model (SWN).

According to the report, DNB’s pricing for wholesale clients will be reduced until it reaches 80% national coverage, which is expected to occur only by 2024.

The move by the telco players to invest in DNB was widely regarded as a good thing since it would assist to speed up the introduction of cheaper, high-speed broadband (HSBB) services in Malaysia. Elsewhere in the region, such as Singapore and Thailand, 5G has already been rolled out commercially. The Philippines, Indonesia, and Vietnam are also in the process of doing so.

At closing, shares of Maxis Bhd were up four sen or 1.22% at RM3.33, while Telekom Malaysia Bhd shares rose one sen or 0.19% to RM5.23. Also closing higher were shares of Axiata Group Bhd (up five sen or 1.78% at RM2.86) and DiGi.Com Bhd (up 17 sen or 5.23%) at RM3.42. Malaysia’s telecommunications and media regulator, the Malaysia Communications and Multimedia Commission (MCMC), has announced that it does not object to the planned Celcom-Digi merger.

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