Malaysia’s ongoing 5G saga took an interesting turn recently when Communications and Multimedia Minister Tan Sri Annuar Musa revealed that six telcos have agreed to take up 70% stake in Digital Nasional Berhad (DNB). He told reporters that an official announcement will be made next week.
When asked to comment during yesterday’s 5G briefing to UMNO Youth, he said the six telcos have agreed to hold equity in DNB and the agreement would be followed by final negotiations on the price and so on.
“So the first phase has been resolved and at least six companies would be given the opportunity to carry out their due diligence as well as the evaluation method for the purpose of actual rollout implementation and DNB learned it may take between one to two months,” he said.
Annuar added, “Hopefully, in another week, by July 8, it would be formalised by the signing of certain documents, then they would be given a period to conduct due dilligence so that at the latest by September, consumers can receive the rollout of 5G service in stages according to the area and infrastructure set up earlier by DNB.”
The Minister said he was happy with the latest developments because the 5G rollout was delayed due to appeal on the determination of using a Single Wholesale Network Model but now there’s a solution that’s accepted by all parties.
It has been reported that the Ministry of Finance will inject RM500 million for its 30% stake in DNB, while the six telcos will each fork out RM200 million for a 12% share. When questioned about the impact of the Celcom-Digi merger, DNB CEO Ralph Marshall said it wouldn’t guarantee the parties’ decision-making in the board. Assuming each telco is allowed to take 11.67% stake each, Celcom-Digi would get 23% post merger. Ralph asked, “What additional say will they have with 22-23 per cent? The policies of DNB, the objectives of DNB, the deliverables of DNB will all remain the same.” He added that details of the board member nominations would be made available in two months as negotiations are currently ongoing.
At the moment, there are no new announcements made by the telcos on the current 5G situation. The six telcos are not officially named but it is likely to include YTL Communications, Telekom Malaysia and the big four telcos – Celcom, Digi, Maxis and U Mobile.
The estimated time for telcos to conduct their due diligence seems to be overly optimistic. The big four telcos have previously issued a joint-statement expressing that they are open to taking equity stake in DNB, however, it must go through a Mergers and Acquisition process. It is worth highlighting that the current Celcom-Digi merger which was announced last year is only expected to be concluded in the second half of 2022.
Before Celcom, Digi, Maxis and U Mobile could start offering 5G services to its consumers, they would need to sign DNB’s Reference Access Offer (RAO) which determines the pricing and deliverables for 5G wholesale services. The big four have previously voiced concerns that the RAO in its current form will not enable affordable and quality 5G services to consumers. There was a report by Singapore’s Straits Times claiming that DNB will offer discounts for 5G access until 80% 5G coverage is achieved, but the report has been refuted by Ralph Marshall as erroneous.
YTL Communications’ Yes 5G remains the first and only telco in Malaysia to offer 5G right now. DNB’s 5G coverage currently covers selected areas of Kuala Lumpur, Cyberjaya and Putrajaya, and they have began expanding to other states such as Johor and Penang. It aims achieve 80% 5G population coverage by 2024
- DNB CEO refutes claims that telcos will get discount on 5G access until nationwide coverage hits 80%
- Annuar Musa: Sale of DNB’s 70% equity stake to six telcos to be finalised by 8th July
- Report: Six telcos to finalise 5G agreement in early July, DNB to offer discounted rates until 80% coverage achieved
- Five reasons why Celcom, Digi, Maxis and U Mobile are reluctant to accept DNB’s 5G access offer