Don’t rush to ink 5G deal: Public interest must not be sacrificed in DNB’s shareholder agreement

I REFER to a Channels News Asia (CNA) report on Nov 30 entitled “Malaysia’s Telcos Set to agree ‘Compromise’ Deal with Government, Ending Face-Off over A Second 5G Operator”.

I take note that this report did not attempt to source any response from any official government sources and that the information from this report was almost exclusively taken from sources from the telco industry.

I also take note that the report referenced the cases in other countries where the roll-out of the single wholesale network (SWN) model was “best by roll-out delays and low mobile broadband penetration”.

There was not mention of the excellent record of DNB to rollout 5G in Malaysia via Ericsson, the main 5G network equipment provider which has catapulted Malaysia to a top three global ranking position in terms of 5G speeds and increased 4G speeds as traffic is being offloaded to the 5G network, according to Ookla.

(Editor’s Note: Ookla is the global leader in fixed broadband and mobile network testing applications, data and analysis.)

In signing any shareholder agreement with the telcos on the ownership of Digital Nasional Bhd (DNB), the Communications and Digital Ministry and the Finance Ministry (MOF) which is the 100% owner of DNB must take into account of the following four items as a way to protect public interest:

Dr Ong Kian Ming
  • Golden share

The government must hold on to its “golden” share in DNB which allows it to make crucial decisions on certain issues involving DNB such as decisions to change the share ownership structure or to sell DNB to another party or set of parties.

This is to ensure that the assets and structure of DNB are protected and not sold to other private sector entities so as to prevent profiteering by telcos who will become DNB shareholders.

  • Government holds veto power

The government must be able to appoint the DNB chairman and must have veto power over the appointment of the CEO.

At a time when there has been so much uncertainty over the direction and survival of DNB as an entity, these powers are necessary in order to ensure the ability of DNB to survive as a going concern and not utilised by the telcos for their own private interests.

Without these powers, the telcos (or a group of telcos with a majority stake in DNB) may appoint a chairman and CEO who may change the terms of the Reference Access Offer (RAO) to decrease the telcos payments to DNB which may further jeopardise the maintenance and further enhancement of the 5G network.

  • Control over 5G assets disposal

There must be strict controls over the allocation and possible disposal of 5G assets currently owned by DNB. This is so that the telcos cannot re-allocate the existing 5G infrastructure to benefit their own network rather than to allow DNB to focus on maximising the operational efficiency of the ENTIRE 5G network.

  • Proper due diligence

Finally, there should be proper due diligence and a detailed business plan for evaluation by the Malaysian Communications and Multimedia Commission (MCMC) as provided under the Communications and Multimedia Act 1998 on a possible second network, including the financing and rollout plans AND the impacts on the existing 5G network, including any financial implications to the MOF via its exposure to DNB.

There should not be a rush to sign the shareholder agreement for DNB if the government’s and the public’s interest cannot be guaranteed as per the points mentioned above.

My fear is that without proper safeguards, we will surely move to a situation where government oversight and public interest in DNB’s single wholesale network (SWN) is replaced by a private duopoly control over the 5G network where shareholder returns are prioritised above all else and public interest is de-prioritised. – Dec 1, 2023


Dr Ong Kian Ming was the former DAP Bangi MP and ex-Deputy Minister of International Trade and Industry (MITI).

The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.

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