CelcomDigi terminates equity deal with DNB following Malaysia’s 5G policy change to Dual Networks

CelcomDigi has announced via Bursa Malaysia that it has terminated the share subscription agreement with Digital Nasional Berhad (DNB). This comes after the Malaysian government announced that it will transition towards a Dual Network approach for 5G rollout.

Here’s the statement issued by CelcomDigi:

TERMINATION OF PROPOSED SUBSCRIPTION

DigiTel and Celcom Mobile had each entered into a Share Subscription Agreement with DNB on 7 October 2022 (collectively, the “SSA”). CelcomDigi hereby announce that both DigiTel and Celcom Mobile have terminated their respective SSA with DNB effective on 3 May 2023, as the long stop date to fulfil all the conditions precedent under the SSA has lapsed.

The termination of the SSA is not expected to have any significant effect on earnings, net assets and gearing of CelcomDigi group for the financial year ending 31 December 2023.

CelcomDigi

Late last year, four telcos – Celcom, Digi, Telekom Malaysia and YTL Communications have signed a conditional share subscription agreement to take a stake in DNB. Celcom and Digi have signed to get a 25% stake in DNB, while TM and YTL take 20% each. The government through the Ministry of Finance controls the remaining 35%.

Celcom and Digi can still offer 5G services as the equity deal termination does not affect the 5G access agreement with DNB. The four have also signed 5G access agreements in order to offer commercial 5G services to consumers.

The cancellation of the equity deal should not impact 5G services offered by CelcomDigi as the access agreements signed are independent from the share subscription agreement. U Mobile currently offers 5G services despite not signing up to take an equity stake in DNB.

Communications and Digital Minister Fahmi Fadzil announced today that DNB will continue to rollout 5G until it achieves 80% population coverage by end of this year and a second 5G network will be established starting this year. According to the minister, the DWN model will avoid a single point of failure and offer redundancy for 5G.

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