Digital Minister Gobind Singh says the latest developments at Digital Nasional Berhad mark a new milestone for the ongoing Share Subscription Agreement (SSA) between 5 major telcos and the 5G single wholesale network. To recap, 5 telcos (CelcomDigi, Maxis, U Mobile, TM and YTL) signed the SSA on 1 December 2023 to collectively acquire a 70% equity stake in DNB.
The SSAs were entered to put into effect the Government’s policy shift announced on 3 May 2023 to move from a Single Wholesale Network (SWN) 5G model to a Dual Network (DN) 5G network model.
Telco participation in DNB is required before shifting to Dual 5G network model
There are two phases under the transition towards a Dual Network model. Under Phase 1, the main focus was for DNB to expedite its 5G rollout to achieve 80% population coverage by the end of 2023 and to ensure the participation of the telcos in DNB.
This is followed by Phase 2 which is the shift to Dual Network and the divestment of the government’s equity (via Ministry of Finance) in DNB. When this phase is initiated, some telcos will remain with DNB while the remaining telcos will move to the second 5G network and divest their equity in DNB.
According to Gobind, it is the Government’s aspiration as per the policy announcement, that the SSAs which are an integral process of the first phase, will enable the participation of all the telcos in DNB as shareholders, before the eventual shift to the Dual 5G network.
Following DNB’s appointment of new board members representing the 5 telcos, the new reconstituted board of DNB will convene a meeting soon, to among others, review the due diligence findings, and work towards the fulfilment of the remaining conditions precedent and the completion of the SSAs.
Once the SSAs are completed, the telcos will take 70% equity in DNB (14% per telco) while the MoF Inc will retain 30% equity and a special share which will accord MOF certain special rights for a stipulated period.
Appointment of new DNB board a step towards fulfilling Dual 5G network policy
The Minister added that the latest development is an important step towards fulfilling the Government’s commitment to the implementation of the Dual 5G Network policy. He said the parties will continue the due process to complete the SSAs, and thereon to enhance Malaysia’s 5G network deployment. He said enabling advanced digitalisation via 5G is a key focus of the government, towards rapid growth of the country’s key economic sectors.
At the moment, DNB remains the sole 5G network in Malaysia and it is the only entity assigned the 700MHz and 3.5GHz spectrum for 5G rollout. All major telcos including CelcomDigi, Maxis, U Mobile, TM and YTL are currently providing 5G services through their respective access agreement with DNB.
So far there’s still no timeline on when the SSAs will be completed. The second 5G network was supposed to start in early January 2024 and almost 4 months have passed since DNB achieved its 80% 5G population coverage target. The requirements and criteria for the second 5G network have not been announced yet and the MCMC has not requested DNB to divest its existing spectrum in preparation of the new network.
