After four telcos signed Share Subscription Agreements (SSA) with DNB last Friday, Finance Minister Tengku Zafrul shared today that more Malaysians will soon be able to access 5G services. He said six telcos which include Celcom, Digi, Maxis, Telekom Malaysia, U Mobile and YTL Communications have all signed 5G access agreements (AA) with Digital Nasional Berhad.
The Minister made the claim on Facebook while sharing a screenshot of a report from The Edge published on 8th October titled “All six telcos execute access agreement with DNB to lease 5G services”. The biggest question is, is the claim that telcos have signed 5G access agreements really true?
At the moment, Digital Nasional Berhad has only announced the signing of the SSA which finalises the equity deal of four telcos taking a stake in DNB. In order to provide commercial 5G services, telcos would need to sign the Access Agreements (AA) with the single wholesale network.
The original report on 5G Access Agreement has been updated
At 8:49am yesterday, The Edge initially reported, “The country’s six mobile network operators (MNOs) have executed their respective access agreements (AAs) with Digital Nasional Bhd (DNB) to lease the latter’s 5G network, subject to final board approvals.” However, at 9:12pm, the article was updated with a new headline “All six telcos reach consensus on access agreement with DNB to lease 5G services”, and the first paragraph now mentions “The country’s six mobile network operators (MNOs) have reached agreements on the terms in their respective access agreements (AAs) with Digital Nasional Bhd (DNB) to lease the latter’s 5G network.”
The updated article now merely mentions that the six telcos have agreed on the terms but the execution is still subject to final board approvals by 30th October 2022.
Telcos have only publicly announced the signing of SSA but not AA
Public listed telcos such as Telekom Malaysia, Celcom (Axiata), Digi and Maxis would have to make an announcement to Bursa when it comes to signing such deals. On Friday, the three publicly listed telcos – Telekom Malaysia, Celcom (Axiata Group Berhad) and Digi announced the signing of their conditional share subscription agreement for an equity stake in DNB.
Under the equity deal, Celcom and Digi will each take a 12.5% stake, valued at RM178.6 million. Meanwhile, YTL and TM will take a larger 20% stake each valued at RM285.7 mil. This leaves the Government via the Ministry of Finance holding a 35% equity stake and a golden share. The reduced percentage for Celcom and Digi is due to their upcoming merger as any merged entity is not allowed to take up more than 25% equity.
If you look at the individual equity deal announcements, all three telcos have listed their conditions which must be settled on or before 30th October 2022. The first condition is the execution of an access agreement between the telco and DNB for 5G wholesale services nationwide. There’s no announcement from YTL Communications on Bursa as they are a (Sdn Bhd) private limited company.
According to sources close to the matter, major telcos have yet to execute the access agreements and they can only sign after they have obtained the approvals from the board. We have also reached out to DNB for clarification on the status of the AA.
As highlighted previously, one of the major concerns by the telcos is the pricing for 5G wholesale access which is listed at RM30,000 per Gbps per month, locked to a 10-year period. DNB has not revised the pricing under its current Reference Access Offer on its website. The big four telcos which include Celcom, Digi, Maxis and U Mobile have previously voiced out that the terms of the RAO in its initial form would not enable affordable and quality 5G services to Malaysians.
Despite not investing in DNB, both Maxis and U Mobile will still be able to offer commercial 5G services to consumers if they sign the Access Agreements.
- DNB: Celcom, Digi and TM are expected to roll out 5G services starting this month
- Budget 2023: DNB to spend RM1.3 billion to achieve 70% 5G population coverage
- After missing several deadlines, Annuar Musa hopes Malaysia’s 5G agreements will be settled by 30 Sept
- Here’s the definitive guide for buying a 5G smartphone in Malaysia, from below RM1000 to flagships