THE Government is open to new and foreign companies holding equities in the country’s new and sole 5G network operator, after two local telco providers said they would not be taking up stakes in Digital Nasional Berhad (DNB).
Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said some foreign mobile network operators (MNOs) already operating 5G globally are keen to fill the gaps left behind by Maxis Bhd and U Mobile Sdn Bhd’s exit from the Government’s 5G rollout.
“As long as new players or existing players can help to speed up the implementation of 5G to the people, the Finance Ministry will give its support,” Tengku Zafrul said yesterday (Sept 2), adding that there are many such industry players.
Tengku Zafrul, however, left it to the Communications and Multimedia Ministry and Malaysian Communications and Multimedia Commission (MCMC) to decide on the matter as it falls under their jurisdiction.
He added that the decision of the two MNOs not to subscribe to DNB shares did not have a big impact on the Government in terms of finance as there are several local banks as well as foreign banks that are ready to finance the implementation of 5G in Malaysia.
On Wednesday (Aug 31), Reuters reported that Maxis and U Mobile would be pulling out of DNB’s 5G rollout plan as they were not keen on being minority shareholders in DNB.
This comes after the Government knocked back a proposal made by the two companies and two other major carriers – Celcom Axiata Bhd and Digi Telecommunications Sdn Bhd – for the four to take a combined majority stake in the agency.
The Government had instead asked six mobile operators in the country to agree to take up a combined 70% stake in the agency by Wednesday (Aug 31).
To date, only U Mobile has publicly stated that it will not pursue the investment option in DNB. Maxis has yet to respond to the Reuters report.
“Four other telcos still on board”
Meanwhile, Tengku Zafrul said Telekom Malaysia Bhd (TM) and YTL Communications Sdn Bhd (YES) are ready to sign an agreement to subscribe to DNB’s shares.
Celcom and Digi, on the other hand, still need the approval of their board members to decide whether to increase their equity stake in DNB, Bernama reported.
“All four MNOs remain positive in subscribing to DNB’s shares and we are giving them two weeks to sign the agreement from Aug 31,” Tengku Zafrul said.
Tengku Zafrul added that the Government has also invited the involved MNOs to take the opportunity to increase their equity holdings in DNB, noting that the process is ongoing and will take a week or two to complete.
“In that process, we have agreed that if there are MNOs that do not participate, the others can raise equity stake and if not, it is limited to 70% for six MNOs,” he explained.
This is because the equity holding changed after U Mobile and Maxis pulled out of the deal and the Government only wants to hold 30% stakes in DNB, with the remaining 70% distributed to industry players and MNOs.
Tengku Zafrul also told Bernama that the MNOs that do not subscribe to DNB shares can still offer 5G access through the 5G Access Agreement.
U Mobile had said that it, along with the other telcos, is still in discussion to finalise the 5G access agreement with DNB.
On November 2021, Reuters reported that none of Malaysia’s major mobile carriers had agreed to Putrajaya’s single-shared 5G network, which was unveiled earlier in the year.
It said telcos were hesitant in accepting DNB’s proposed pricing plan, under which they would supposedly end up paying more than they would if they rolled out 5G on their own.
Since then, calls have been made across the board to review the decision to appoint DNB as the sole 5G network operator, allow a second 5G service to be set up and have a special briefing on the issue in Parliament.
In an apparent move to appease the telcos, the Government eventually offered to sell 70% of DNB to mobile operators, with the Government to hold the remaining 30% of stakes in DNB through a planned injection of RM500 mil by the Finance Ministry.
However, the sale has still not been completed even months after it was first mooted. – Sept 3, 2022
Main photo credit: Malay Mail
