Maxis and U Mobile have till today to accept terms for 5G rollout or risk missing out
KUALA LUMPUR, Aug 8 — Two of Malaysia’s biggest telecommunications companies risk missing out on the 5G network contracts and shares in Digital Nasional Berhad (DNB) if they do not comply with Putrajaya’s terms by today.
According to a Straits Times (ST) report, Maxis and U Mobile who together hold 40 per cent of the market share are apprehensive over issues concerning DNB’s governance of the 5G roll out seeing as they are the sole wholesale provider for the super fast wireless network service.
“If they want to participate, they have to confirm today (Monday). No ifs and buts and conditions,” a well-placed official told ST.
“DNB said on July 1, it will take two months to finalise the stake sale and the government intends to stick to end-August,” another source told the Singapore daily.
According to the report, each of the six telcos would have had to cough up RM200 million each for an equal 11.7 per cent share of DNB, based on the Finance Ministry’s injection of RM500 million for its 30 per cent stake.
On May 23, Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz indicated to two of the big four telco firms that the government intends to stick to its June 30 deadline for them to sign up for 5G network contracts and shares in the state 5G agency, rejecting a move by the companies to demand a controlling stake in Digital Nasional Berhad (DNB).
On June 16, Tengku Zafrul told ST that an extension to “early July, but no later than that” was possible, if required, to tie up loose ends.
Tengku Zafrul did however mention a term sheet laying out “the main terms of governance and the equity issues” would be prepared in line with their “our primary goal of providing 5G services to as many users and businesses as possible in the shortest amount of time”.
Then on June 29, industry sources told ST that Malaysia’s top telecommunication corporations have agreed on shared ownership of DNB.
The report added that the agreement will include a price review that would be overseen by the Malaysian Communications and Multimedia Commission (MCMC) every three years.
It also indicated that wholesale pricing would be discounted until DNB achieves 80 per cent of nationwide coverage, which is estimated to happen by 2024.
Putrajaya has been in constant negotiations with telcos in the country over the rollout of 5G, with CDMU 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.