Following the latest developments where only four telcos remain interested to take up equity stake in Digital Nasional Berhad, Finance Minister Datuk Seri Tengku Zafrul Aziz said both Telekom Malaysia (TM) and YTL Communications (Yes) have obtained approval from their board members and are ready to sign an agreement to take up shares in the single wholesale network. He said all four telcos which also includes Celcom and Digi remain positive in subscribing to DNB’s share and the government is giving them two weeks to sign the agreement from 31st August.
He added that Celcom and Digi are still getting approval of their board members to decide whether to increase their equity stake in DNB. The Ministry of Finance had offered 6 telcos to take up 70% stake in the national 5G network in an attempt to solve the 5G stalemate. Initially, six telco were expected to fork out RM200 million for a 12% stake but two declined to proceed with the equity deal during the planned signing on 30th of August. As a result, DNB says it will have to revise the Share Subscription Agreements (SSAs) and the Shareholder Agreement to allow equity subscription by four instead of six telcos. If split equally, each telco would be taking up a 17.5% stake.
In an interview with Bernama, Tengku Zafrul said that the government still holds to the principle that the 5G network needs to be jointly developed with local telcos and maintains its decision to not be the majority shareholder in DNB. He added this is in line with the request from domestic MNOs that they hold equity interest in DNB.
With the ongoing merger between Celcom and Digi, it isn’t clear if the government would allow both telco to increase their shares up to 17.5% each, as the MergeCo will hold 35% once the merger is completed. The Minister said they are considering whether the 70% equity will be divided among the four MNOs, or for the remaining shares to be held by the government, but not at the level of a majority shareholding in DNB.
Tengku Zafrul has said previously that foreign telcos are queueing up to get access to the Malaysia market and are interested to take up shares that are not snapped up. He said the option to offer equity holdings to foreign telcos remains as they have expressed their interest to contribute to the development of Malaysia’s 5G network. He said that the government’s policy is to give priority to local telcos but will not reject the possibility of offering shares to foreign telcos if the outstanding shares are not subscribed.
For telcos that didn’t want to take up an equity stake in DNB, Tengku Zafrul says they can still offer 5G access via the 5G access agreement. He said the DNB is still in the negotiation phase to finalise the agreement without he didn’t provide any deadlines. In a statement released on 31st August, DNB said discussions on the 5G Access Agreements are still progressing with all six telcos on a separate and independent track. U Mobile has also released a statement yesterday assuring that it will be able to provide 5G services to consumers without taking a stake in DNB.
Downplaying the withdrawal of Maxis and U Mobile from the equity deal, the Minister said the decision of the two telcos did not have a big impact on the government in terms of finance as several local banks as well as foreign banks are ready to finance the implementation of 5G in Malaysia. He said the Finance Ministry via its shareholding in DNB will ensure that the 5G network and infrastructure is developed as soon as possible and DNB remains on track to achieve its 80% 5G population coverage by the end of 2024.
At the moment, Yes 5G remains the first and only telco in Malaysia to offer commercial 5G services. TM which announced that Unifi Mobile customers will soon experience 5G back in December has yet to introduce a single 5G offering to consumers. Meanwhile, Celcom has said that consumers may be able to try 5G services in September if there are “no hindrances”.
[ SOURCE 2, IMAGE SOURCE ]
Related reading
- DNB: 4 telcos remain interested to take stake in Malaysia’s 5G single wholesale network
- Report: Maxis and U Mobile refuse DNB stake deal, citing no benefit being minority shareholder
- 5G in Malaysia: What’s the progress so far? | Let’s Talk About #102
- U Mobile says it will able to offer 5G services without investing in DNB
