After missing deadlines, after deadlines, after deadlines, it appears that something is finally moving in the current 5G stalemate situation following the signing of the share subscription agreements by four Malaysian telcos. Celcom, Digi, Telekom Malaysia and YTL Communications have signed their conditional agreements to jointly take up a 65% equity stake in Digital Nasional Berhad (DNB), valued at almost RM930 million combined.
Malaysia’s Finance Minister Tengku Zafrul even posted on Facebook claiming that more Malaysians will soon be able to access 5G. He said all six telcos which include Maxis and U Mobile have “signed” their 5G access agreements with DNB. Is it really true? Are the telcos finally saying yes to DNB? Here’s everything you need to know.
Four telcos signed conditional share subscription agreements on 7th October
On 7th October, four telcos agreed to invest in DNB with Celcom and Digi each taking a 12.5% stake, while TM and YTL take a 20% stake each. If you look at the official announcements published on Bursa Malaysia, these agreements are conditional and are subject to completion of several conditions which include the execution of an access agreement between the operator and DNB.
Despite not taking an equity stake in DNB, other telcos such as Maxis and U Mobile can still offer 5G services if they sign the 5G access agreements. As of 24th October, none of the publicly listed telcos such as TM, Axiata (Celcom), Digi and Maxis has announced the signing of 5G access agreements with DNB.
One of the major concerns of the telcos is the actual wholesale pricing for 5G as the big four have said previously that DNB’s offer will not enable affordable and quality 5G services. According to the Reference Access Offer published on DNB’s website, telcos will have to pay RM13,000 per Gbps per month and it’s locked to a period of 10 years. It doesn’t make sense for the pricing to be fixed for 10 years as data consumption increases on an annual basis while users would gradually expect to pay less per GB.
Telcos are given until the end of October to sign 5G access agreements
As revealed during the recent JENDELA Q3 2022 update, DNB has confirmed that the six telcos have locked in the terms of the access agreements. However, they are given until the end of October 2022 to sign the agreement. This appears to coincide with the 30th October deadline to fulfil the conditions of the Share Subscription Agreements issued by the four telcos.
Obviously, the telcos would only sign the access agreement if the pricing and terms are favourable. We will find out soon as there’s just a week remaining in October 2022.
DNB only completed 54% of 5G sites planned for this year as of Q3 2022
Even without any major telco on board, DNB is still deploying the national 5G network with the aim to achieve 80% 5G population coverage by the end of 2024. It was promised earlier that its 5G network will achieve 40% 5G population coverage by the end of this year with a total of 4,018 sites covering Kuala Lumpur, Putrajaya, Cyberjaya, Penang, Johor, Sabah, Sarawak, Selangor, Negeri Sembilan and Perak.
From the recent JENDELA update, it appears that DNB is falling behind its original plan as they have only deployed 1,915 out of 3,518 sites planned for 2022. That’s less than half of its original 5G site target announced last year. In terms of 5G coverage, DNB claims to cover 33.2% population coverage and it aims to achieve 37.9% by the end of this year. DNB said the delay in Q3 2022 5G deployments was due to challenges in obtaining council permit approval, pending new guidelines from local councils and the high cost of fibre leasing from Sacofa. It has completed over 160 sites in Sabah and Sarawak but none of them has been switched on. The single wholesale network has recently switched on 5G in Melaka and Seremban.
