LOOKING ahead, we anticipate additional clarity and progress on the government’s roll-out of the 5GDN framework. In a recent key development for 5GDN, the Minister of Finance Incorporated (MoF Inc) exercised its put option on DNB on 1 Dec 2025.
Under this option, MoF Inc will sell its entire shareholding in DNB and transfer its remaining shareholder loan (including accrued interest) and additional shareholder advance (RM250.2 mil) to the three investor shareholders (YTLPOWR, CDB, and MAXIS in equal portions.
Each shareholder must pay RM327.87 mil for their respective portion, and the transaction is required to be completed within two months (approximately by 1 Feb 2026).
While DNB incurred a substantial net loss of RM1.2 bil in financial year 2024 (FY24), we do not rule out the potential for improved financial performance in the coming years, supported by ongoing initiatives to mitigate losses and enhance its long-term viability.
Deployment of NW2 has continued to gather momentum since its commencement in mid-July 2025, with roll-out progress currently tracking ahead of plan.
U Mobile is targeting 80% CoPA by the second half of calendar year 2026 (2HCY26), with a further requirement to reach 95% CoPA by its third year of operations, as stipulated in its detailed business plan (DBP) submitted to the Ministry of Communications (MoC).
Under the DBP, NW2 will be deployed as a standalone 5G network from day one, complemented by the rollout of IBS within four years to enhance indoor coverage.
The plan also includes the provision of fibre connectivity and support for enterprise 5G applications to accelerate digital adoption among businesses.
To fund the roll-out, U Mobile recently secured a RM4.3 bil syndicated loan from CIMB (lead arranger), MAYBANK, AMBANK, and UOB Malaysia to support both capex and working capital requirements.
“Looking ahead, we expect NW2 contract awards to accelerate once U Mobile finalises its broader deployment plans, which are likely to encompass a wider scope of works, including greenfield build-to-suit (BTS) sites and the roll-out of fibre backhaul,” said Kenanga.
Kenanga estimates that approximately 20% of NW2’s targeted 6,515 sites (1,300 sites) during its 1st year of operations will comprise BTS deployments, creating opportunities for tower operators such as OCK, AXIATA (via Edotco), and REACHTEN.
That said, at this juncture, U Mobile remains focused on upgrading its existing 4G sites for NW2, before progressing into new BTS leasing.
“We maintain a NEUTRAL stance on the telecommunications sector amid lingering uncertainty over DNB’s final shareholding and control structure, as well as its associated financial implications and longer-term prospects,” said Kenanga.
Greater clarity on these parameters will shed more light on future sector earnings, capex commitments, and dividend sustainability.
“At this juncture, we prefer fixedline players, as they are less exposed to near-term policy risks—particularly those stemming from the ongoing implementation of the 5G Dual Network (5GDN) framework involving DNB,” said Kenanga.
On a more positive note, the prospect of higher shareholder returns could lend support to sector sentiment. —Jan 6, 2025
Main image: Faculty Of Engineering & Science
