More than a month ago, there were reports that Malaysian telcos are finally on board with 5G after agreeing to take access and a stake in Digital Nasional Berhad (DNB) ahead of the 30th June 2022 deadline. The Communications and Multimedia Minister Tan Sri Annuar Musa said everything is going according to plan and the telcos have reached a certain understanding. He shared that everything will be concluded by the 8th July and mass 5G services will be available in stages, latest by September.
It’s already the first week of August and we have yet to hear any new developments on the current 5G situation in Malaysia.
To recap, DNB is Malaysia’s Single Wholesale Network (SWN) and it is mandated to rollout a national 5G network. It is the only entity that’s allocated the 700MHz, 3.5GHz and 26/28GHz spectrum for 5G use and other telcos are prohibited to build their own network. At the moment, YTL Communication’s Yes 5G remains the first and only telco to offer 5G services in Malaysia using DNB’s network.
Telcos have not signed DNB’s 5G access offer
There are reports that the six telcos have signed the reference access offer (RAO) and the document was a major concern among the big four telcos such as Celcom, Digi, Maxis and U Mobile. The four telcos jointly issued a statement in April that DNB’s RAO in its initial version (1.0) will not enable affordable and quality 5G services for the rakyat. One of the concerns is the wholesale price of RM30,000 per Gbps per month which is tied to a 10-year period.
From our checks with DNB, the telcos have submitted their Access Request Application Forms, which is a first step of seeking access. The telcos have not signed the RAO which outlines the pricing, deliverables and other various terms and conditions. At the time of writing, DNB’s website is still showing the initial version that the telcos don’t agree.
Despite earlier reports that YTL Communications and Telekom Malaysia (TM) have signed up with DNB, TM told us in June that they have not signed up with DNB for commercial 5G access. They are still conducting commercial trails with DNB and negotiating with DNB and their stakeholders to finalise the commercial 5G agreement.
Telcos taking 70% stake in DNB is still a long way to go
It was also reported that Annuar Musa is expecting telcos to conduct their due diligence for DNB equity deal in two months so that consumers can expect rollout of 5G services in stages by September. From what we’ve checked and confirmed, the telcos have signed a non-binding term sheet which is also the first step in the entire process.
The big four telcos have previously mentioned that they are open to taking equity in DNB but it has to be done through a mergers and acquisition process. It seems impossible for such a move to be concluded in two months as it has to be approved by their respective shareholders. If you look at the current Celcom and Digi merger, it is already taking more than a year and it is currently expected to be completed by the end of 2022.
Telcos have not issued any public statements on 5G access and equity deals
With all the buzz that’s happening in the media, not even one public listed telco in Malaysia has issued an official statement on its 5G rollout. If the telcos are truly on board, they would definitely make a huge announcement informing its shareholders and customers that 5G services will be rolled out soon. The silence from the telcos just shows the sad reality that 5G in Malaysia is still up in the air.
At the moment, DNB is still continuing to expand its 5G network with YTL Communications as its sole active user. Besides covering Kuala Lumpur, Selangor, Cyberjaya and Putrajaya, the 5G network has expanded to Johor Bahru and Ipoh. Penang will be covered soon as indicated on their coverage map. DNB aims to achieve 40% 5G population coverage by the end of 2022 and up to 80% by the end of 2024.
Annuar Musa recently said that 1,000 schools throughout Malaysia including rural areas will be getting 5G coverage by the end of 2022. Meanwhile, his constituency of Ketereh in Kelantan was also named the first rural location in Malaysia to get 5G under a pilot project.
- Ketereh is Malaysia’s first rural location to get 5G under pilot project
- Annuar Musa: 1,000 schools including rural areas in Malaysia will get 5G by end of 2022
- Annuar Musa: Sale of DNB’s 70% equity stake to six telcos to be finalised by 8th July
- Five reasons why Celcom, Digi, Maxis and U Mobile are reluctant to accept DNB’s 5G access offer