CDB, MAXIS, and YTLP have received a put option notice from the Ministry of Finance (MoF), requiring them to acquire the remaining 42% government stake in Digital Nasional Bhd (DNB), along with assuming the associated loans, accrued interest, and additional shareholder advances.
In accordance with the shareholders’ agreement, each party will fork out RM327.9 mil, and this transaction is expected to be finalised within the next two months. Upon completion, each company will hold a one-third equity stake in DNB.
“This news is within our expectations. As highlighted in our telecommunications sector report dated 14 May 2025, the shareholder agreement has a put option for MoF to sell its ordinary shares in DNB within one month after 12 November 2025,” said TA Securities (TA).
Following the MoF’s exit, DNB will transition into a privately led entity, which could lead to greater cost efficiency, stronger capex discipline, faster rollout decisions, and better optimisation of network coverage and infrastructure.
Meanwhile, this development is both timely and necessary to ensure DNB remains competitive, particularly with the emergence of U Mobile as its main rival.
U Mobile is rolling out a second 5G network, which may affect DNB if access seekers decide to migrate to the alternative provider. In terms of 5G coverage in populated areas, DNB has achieved approximately 82.4% nationwide as of July 2025, while U Mobile has reached 58.2% as of October 2025.
“We expect both CDB and MAXIS to be able to fund this exercise using internal funds, supported by their respective cash balances of RM663 mil and RM899 mil as of the third quarter of financial year 2025 (3QFY25),” said TA.
Upon completion, both companies will account for their 33.3% stakes in DNB using the equity method. This shall bring potential earnings risk for both companies, as DNB remains loss-making.
For 2024, DNB recorded a net loss of approximately RM1.2 bil. As such, both CDB and MAXIS could face earnings volatility if DNB’s performance does not improve as expected.
“In all, we maintain an OVERWEIGHT stance in the telecommunications sector. We expect service revenue to remain resilient despite the competitive operating environment, as telco operators continue to focus on value-driven propositions rather than engaging in an all-out price war,” said TA.
Meanwhile, Phase 2 of JENDELA is anticipated to commence by early next year, which should provide further opportunities for local telco players. Key downside risks identified by TA include unprecedented price competition and unfavourable regulatory changes. —Dec 3, 2025
Main image: datos.gob.es
