Digital Nasional Bhd (DNB) stated the 5G share subscription agreements (SSAs) will be revised to accommodate just the four remaining major telecommunications firms.
Following latest developments which seems to have foiled the earlier set deadline of Aug 31 for an agreement to be met between all six mobile network operators (MNOs) after over a year of talks, DNB said discussions on 5G access agreements will continue with the six MNOs involved, and this may take a new form, whether it be separate or to work independently.
DNB has been in discussions with the six MNOs — Maxis Bhd, U Mobile Sdn Bhd, Celcom Axiata Bhd, Digi Telecommunications Sdn Bhd, YTL Communications Sdn Bhd, and Telekom Malaysia Bhd.
A Reuters report quoting anonymous sources released earlier today, said two mobile carriers declined the offer under the SSAs after the government issued a proposal that four carriers — Maxis, U Mobile, along with Celcom Axiata Bhd and DiGi Telecommunications — take a combined majority stake in DNB.
The government had earlier asked the six mobile operators in the country to agree to take up a combined 70 per cent stake in the agency, but Maxis and U Mobile, as named by Reuters in its news report, apparently declined., as they could not see benefits of being minority shareholders in DNB.
In a statement on Wednesday (Aug 31), following the report that Maxis and U Mobile do not plan to take up stake in the state-owned DNB, the 5G agency said the execution of share subscription agreements (SSAs) with the MNOs will be concluded soon.
It said that although the SSAs were finalised and ready to be executed by the six MNOs on Tuesday, there was a last-minute change in the decision by two MNOs (one had decided not to proceed, while the other had not responded), despite their confirmations to participate earlier.
Accordingly, DNB said revisions of the transaction documents (the SSAs and shareholder agreements) need to be made to allow for the equity subscription by four MNOs (instead of six), which would consequently require further internal approvals from the four MNOs.
“The four MNOs remain interested, and it is envisaged that the equity participation process will progress to completion with the MNOs concerned,” the statement read, adding, in the interim, discussions on 5G access agreements are progressing with all six MNOs, and under a separate and independent track.
DNB said it is committed to ensuring that the 5G network and infrastructure will continue to be deployed on an accelerated basis. And, at present, 5G coverage has reached approximately 30% of populated areas, and is on track to achieve the target of 80% coverage of populated areas by 2024.
Earlier today, in the Reuters report entitled: ‘Malaysia’s 5G plans hit as two carriers decline stakes in state agency – sources,” it cited two of Malaysia’s largest mobile carriers do not plan to take stakes in a state-owned 5G agency, according to “three people familiar with the matter.”
It was deemed to be a setback that threatens to throw the country’s 5G rollout into further disarray whereby the decision by Maxis Bhd (MXSC.KL) and U Mobile has also disrupted the government’s plan to sign agreements with other carriers, said two of the people, who requested anonymity as they were not authorised to talk about the private negotiations.
“(The parties) will have to try and restructure the deal,” said one person.
The report cited a counter-proposal by Maxis, U Mobile and two other major carriers, Celcom Axiata Bhd and DiGi Telecommunications, for the four of them to take a combined majority stake was rejected earlier by the government.
It stated, Maxis and U Mobile could not see benefits in being a minority shareholder in DNB, said two of the sources, but added that the firms have told the government they want to remain in talks for access to DNB’s 5G network.
Digital Nasional Berhad (DNB) which is wholly owned by the Minister of Finance (Incorporated) has been mandated by the Government of Malaysia to be the single neutral party to undertake the deployment of 5G infrastructure and network nationwide and is licensed under the Communications and Multimedia Act 1998 (the Act) to provide wholesale 5G coverage and capacity to other licensees under the Act.
