Maxis, U Mobile, four other telcos agree to DNB stake, racing to complete terms of 5G rollout as foreign players ‘queue’ to enter Malaysia

·3-min read
Malay Mail
Malay Mail

KUALA LUMPUR, Aug 15 — Malaysia's six major telecommunications companies have all agreed to take up shares in Digital Nasional Berhad (DNB), and are now in talks to hammer out how much they will have to pay for access to the country's 5G network being rolled out now, according to Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz.

They have until August 31 to complete and agree to the terms, or risk losing out on access to Malaysia's 5G single wholesale network being rolled out rapidly now by the Ministry of Finance owned DNB.

It is understood that Maxis and U Mobile were the last two companies to agree to terms for equity stakes in DNB last Monday. The other four companies — Celcom, DiGi, YTL and Telekom Malaysia — agreed earlier to take up shares in DNB that were offered to them by the government.

Tengku Zafrul told Malay Mail and Singapore's Straits Times in an interview in Kuala Selangor near here yesterday that foreign telecommunication companies are also “queuing up” for access to the Malaysian market.

“There are many who have registered strong interest... because to them there is no more capex. And then they say we have got the technology and we know how to play the game.”

But Tengku Zafrul said that while it is very hard not to allow foreign players into the Malaysian market considering the potential for lower consumer prices, local established telcos should still be given the first bite at the country's 5G network.

“I think we have to give them an opportunity to continue to be the main players as they have invested so much,” the finance minister said, referring to the local telcos.

He also pointed out that while the six Malaysian telcos have agreed to take up shares in DNB, a full completion of the deal can only happen once they agree to the access terms by August 31.

While adamant that the government will not extend the August 31 deadline, Tengku Zafrul acknowledged yesterday that he anticipates the possibility that some of the telcos may still try to delay talks.

“Some of the players probably want to delay longer, but whoever wants to sign can sign first,” he said while pointing out that it would be very hard not to allow foreign players to enter Malaysia after talks are concluded with local telcos.

The six telcos have been jointly offered up to a 70 per cent stake in DNB, with the finance ministry holding the remaining shares. But the stakes are contingent on the former companies agreeing access terms with DNB.

Putrajaya has been in constant negotiations with telcos in the country over the rollout of 5G, with telcos constantly pushing back for more favourable terms – advocating for a dual wholesale network (DWN) model instead of the government’s single wholesale network (SWN) – which they claim would provide better optimising availability and pricing of 5G.

DNB was established in early March 2021 to accelerate deployment of 5G infrastructure and network in Malaysia. It will offer 5G as a wholesale network service to other telcos.