Digital Nasional Berhad (DNB) announced this evening that Telekom Malaysia’s (TM) Share Subscription Agreement (SSA) to acquire a stake in DNB has been terminated. According to DNB, TM has failed to fulfil the conditions by 21 August 2024 after it was granted an extension from 21 June 2024.
According to the statement, TM requested an additional extension until 31 December 2024, however, DNB was unable to extend the deadline further after they deliberated on the request.
TM fails to obtain an extension from DNB
The other four telcos – CelcomDigi, Maxis, U Mobile and YTL have completed their SSAs with DNB on 28 June 2024. As a result, the four telcos collectively acquired a 65.1% stake in DNB (16.3% each). Meanwhile, MoF retains an approximately 34.9% stake along with a special share for a designated period.
All five telcos including TM signed their SSA on 1st December 2023 and the original plan was to have the five telcos take a cumulative 70% stake in DNB. Each of the telcos had injected RM233 million into the single wholesale network as an Access Agreement Prepayment which will be converted as Shareholder Advance to DNB upon SSA completion
Responding to DNB’s announcement, TM acknowledged that its SSA with DNB was terminated after it failed to appeal for an extension. The telecommunications giant said it requested for more time to obtain their shareholders’ approval at an EGM due to the SSA being a related party transaction. It said that additional time beyond 21 August was required to address matters related to the EGM.
TM also said that the SSA termination will not affect its current 5G offerings to the customers. It still has an ongoing 5G access agreement with DNB which is separate from the SSA. It added that they will continue to play a key role in supporting the nation’s 5G ecosystem and transition to the 5G Dual Network.
What happens to the second 5G network race?
At the moment, the race is on for Malaysia’s second 5G network and TM is one of the four telcos that have submitted their bid to the MCMC. Without taking a stake in DNB, is TM out of the second 5G race? Most importantly, will the second 5G network plan be put on hold as the policy shift from a Single Wholesale Network to a Dual Network requires the full participation of service providers in DNB?
