The Share Sale Agreement between Digital Nasional Berhad and mobile network operators has been finalized. The new contract differs significantly from the previous agreement signed under the Single Wholesale Network model.
The new SSA permits the introduction of a second network, which will run parallel to DNB’s own RM15 billion 5G network with Swedish vendor Ericsson. However, the second 5G network can only be established once DNB achieves 80% coverage of the population by the end of 2023, as agreed upon by the government-owned entity.
The second SSA could have been delayed because the agreement included a significant caveat. The new SSA states that if DNB fails to meet the 80% COPA target, it will delay the transition into the 5G DN model. If DNB fails to meet this target, MCMC may take action, including imposing fines and suspending or even terminating DNB’s license.
The regulator may have included a clause to prevent DNB from using tactics that could delay or prevent the rollout of 5G DN. Currently, DNB has achieved 73% COPA with approximately 25 days left to complete the remaining 7%. However, the COPA coverage is being argued as contentious due to many complaints about poor signal strength inside buildings, which is where 5G speed is most needed.
DNB’s future is uncertain, and one significant question still arises: whether the MNOs will continue to rely on DNB’s services once they begin developing the second network. The government has stated that it will eventually exit DNB upon achieving its 80% COPA target, and equity participants will then be eligible to become shareholders of the Second 5G Network. This further compounds the fear that DNB’s RM15 billion network could become a white elephant.
