Digital Nasional Berhad (DNB) has announced that five Malaysian telcos have executed their Share Subscription Agreement (SSA) to take up an accumulative 70% stake in the single wholesale network. Upon successful due diligence, the telcos will inject RM233 million each to acquire a 14% stake.
The five telcos are CelcomDigi Berhad (through Infranation Sdn Bhd), Maxis Broadband Sdn Bhd (Maxis), U Mobile Sdn Bhd (U Mobile), Telekom Malaysia Berhad (TM) and YTL Power International Berhad (YTL). The signing ceremony took place at DNB’s office at TRX Exchange 106 and it is witnessed by Communications and Digital Minister YB Fahmi Fadzil.
According to DNB, the RM233 million injection from each telco will be utilised to meet DNB’s funding requirements. At the moment, DNB is mandated to achieve 80% 5G population coverage by the end of 2023. It has to complete the integration and onboarding of 7,509 5G sites while maintaining the network in terms of performance and service level agreements (SLAs) signed in the Access Agreements.
The Malaysian government via Ministry of Finance (MOF Inc) will retain the remaining 30% stake and hold a special share in DNB. MoF may exit from DNB once the 80% 5G population coverage target is achieved and the determination by the authorities on the commencement of the second 5G network.
The SSAs are expected to be completed between February to April 2024 and are subject to the satisfaction of certain terms and conditions of the SSA in particular the conditions precedent. This includes due diligence, and approvals from the relevant authorities, financiers and certain vendors.
In May 2023, the government announced a 5G policy shift to transition from a Single Wholesale Network to a Dual Network model in 2024 once 80% 5G population coverage is achieved. The decision to have two 5G networks is to provide redundancy and to counter any issues with DNB as a monopoly given its current position as the Single Wholesale Network.
As of end-October 2023, Malaysia has recorded 3.6 million 5G service subscriptions which represents an adoption rate of 10.8%. According to Fahmi, Malaysia’s 5G population coverage is currently at 73%. Once 80% 5G population coverage is achieved, some of the telcos will form Entity B to build the second 5G network. The full details of Entity B will be announced once Malaysia’s 5G population coverage hits 80%.
Commenting on the SSA signing ceremony, CelcomDigi CEO Datuk Idham Nawawi said, “The signing of the Share Subscription Agreement marks a momentous milestone for the Malaysian communications and digital industry, underscoring the strong sector-wide commitment towards realising the Government’s ambition of a Dual Network 5G model and as a lever towards powering Malaysia’s ambitions for the digital economy. The shift to an industry-led model will be instrumental in achieving a successful roll-out in Malaysia by leveraging the collective assets and resources from the telco Industry, and in building a solid platform for future technology evolution and service innovation. CelcomDigi Berhad is pleased to partner with the Government and the industry in building 5G for the future and for all Malaysians.”
Maxis CEO Goh Seow Eng said, “The Share Subscription Agreement is an important step for the nation’s 5G development. Maxis supports the Government’s digital ambitions to bring more economic benefits to Malaysians, including a seamless transition to a dual 5G network.”
Meanwhile, TM Group CEO Amar Huzaimi Md Deris said ”TM’s nationwide fibre infrastructure and digital platforms uniquely position us to drive the nation’s digitalisation efforts. Going beyond connectivity, our commitment to 5G reinforces TM’s true convergence leadership. Together with the industry, we’re building a robust 5G ecosystem, that not only fuels progress but also addresses the diverse needs of the communities. The signing of Share Subscription Agreement (SSA) marks another key milestone in our commitment to support Government’s digital agenda, advancing the nation’s digital economy and fostering growth leveraging on 5G.”
U Mobile CEO Wong Heang Tuck said “U Mobile shares the Government’s vision of leveraging 5G to narrow the digital divide and spur Malaysia towards becoming a more robust digital economy nation. The signing of the Share Subscription Agreement with Digital Nasional Berhad is another step forward to those ambitions and towards the country’s transition to a resilient dual 5G network. U Mobile will also continue to develop accessible quality products and services to drive 5g adoption in Malaysia.”
YTL Power International Berhad Managing Director Dato Yeoh Seok Hong said, “The signing of the Share Subscription Agreement is a first step in the proposals to transition to a dual wholesale network environment. We look forward to guidance from MCMC and the Ministry as parties work on the detailed business plan for the second network to ensure that this model will deliver equitable and inclusive 5G services to the nation.”
Back in October 2022, four telcos – Celcom, Digi, YTL Communications and Telekom Malaysia have signed a conditional Share Subscription Agreement with DNB to acquire a 65% equity stake while the Ministry of Finance will hold 35% stake as well as a golden share. After the change of administration and the 5G policy shift towards a dual network, the public-listed telcos (Celcom, Digi and TM) have terminated the previous SSA citing that the long stop date to fulfill all the conditions precedent under the SSA has lapsed.
Despite not taking an equity stake, all 5 telcos currently are providing 5G services to consumers as they have signed their respective 10-year 5G access agreement with DNB. Maxis is the last major telco to sign the access agreement with DNB and have started to offer 5G to its customers in August 2023.
