Communications and Digital Minister Fahmi Fadzil said Malaysia’s 5G population coverage has reached 76.1% as of 30th November 2023. This means there’s less than 4% remaining for Digital Nasional Berhad (DNB) to achieve its expedited target of 80% 5G population coverage by the end of this year.
Fahmi added that once Malaysia achieves its 5G rollout target, the government will decide on the establishment of the country’s second 5G network. This comes after five telcos (CelcomDigi, Maxis, U Mobile, Telekom Malaysia and YTL Communications), executed their Share Subscription Agreement (SSA) to collectively acquire a 70% stake in DNB on 1st December 2023.
Under the deal, each telco will inject RM233 million into DNB for a 14% stake and the funds would be treated as prepayment for their 5G access agreement. The injected funds will become shareholder advances once the necessary conditions including due diligence are fulfilled. Meanwhile, the Malaysian government will retain its 30% stake as well as a special share.
As announced by the public-listed telcos, the Shareholders Agreement will also set out the terms for the transition to a dual 5G network model, including a put option for the Ministry of Finance to sell its shares and transfer its shareholder advance in DNB. The longstop date for fulfilling the Share Subscription Conditions Precedent and Shareholder Advance Conditions Precedent is set at 9 weeks from the date of SSA or 20 days after the first board of directors meeting of DNB.
Back in May 2023, the Malaysian government announced a 5G policy shift from a Single Wholesale Network to a Dual Network model, citing the need to have redundancy and to counter any issues with DNB being a 5G monopoly. According to Fahmi, once 80% 5G population is achieved, some of the telcos will move on from DNB to build the second 5G network.
As of end-October 2023, Malaysia recorded 3.6 million 5G service subscriptions which represents an adoption rate of 10.8%. All five major telcos currently offer 5G services to consumers including Maxis which signed their 5G access agreement in August 2023.
At the moment, DNB is the sole entity that’s permitted to roll out 5G in Malaysia as it was established as a state-owned single wholesale network in 2021. To offer 5G services, telcos would need to sign access agreements with DNB as the MCMC had revoked technology neutrality for telcos to utilise their existing spectrum for 5G in July 2021.
After pushback from telcos, the government offered to reduce its stake to 30% and offered equity to telcos that signed the 5G access agreement. Four telcos (Celcom, Digi, Telekom Malaysia and YTL Communications) signed the first SSA in October 2022. In May this year, the three public-listed telcos announced the termination of the deal as the long stop date to fulfil all the conditions precedent under the SSA had lapsed.
[ SOURCE ]
