by BERNAMA / TMR Pic

TWO mobile network operators’ (MNOs) decision not to subscribe for Digital Nasional Bhd’s (DNB) shares will not have a major impact on the government financially as it is understood that several local and foreign banks are prepared to finance the 5G implementation in Malaysia.

Finance Minister Tengku Datuk Seri Zafrul Tengku Aziz (picture) said this also reflects the confidence of the private sector in the country’s 5G development plan.

There is also the possibility that shares in the state-owned 5G agency would be offered to foreign MNOs.

“The option to offer equity shareholdings to foreign MNOs is also there because various foreign MNOs have expressed their desire to contribute to the local 5G network development.

“The government’s policy is to prioritise domestic MNOs, but it does not rule out the possibility of offering the remaining shares that can be subscribed in DNB to foreign MNOs,” he told Bernama today.

“Of course, the decision impacts the 5G implementation timeline (in terms of delaying it) for the people and businesses, and we need to accept the fact that Malaysia is (already) lagging behind in terms of 5G applications compared to neighbouring countries in the region,” he added.

Recently, two out of the four MNOs committed to subscribing to DNB’s shares have to re-discuss with their top management and respective boards of directors on the possibility of subscribing different amounts of equity shareholdings.

Four MNOs, namely Celcom Axiata Bhd, Digi.Com Bhd, YTL Communications Sdn Bhd and Telekom Malaysia Bhd, are standing firm by their respective decisions to subscribe to DNB shares.

It is understood that Maxis Bhd and U Mobile Sdn Bhd do not plan to take a stake in DNB.

New SSA in September, 80% 5G Coverage by 2024

“We hope that this decision can be finalised in September,” Tengku Zafrul said, referring to the share subscription agreement (SSA). 

He also hoped that 5G services can be offered to benefit Malaysians as soon as possible.

“The most important thing is that the 5G implementation will benefit the people and businesses. During the negotiation period to finalise the SSA, I understand that DNB has also negotiated on the 5G access agreement,” he said.

For MNOs that do not subscribe to DNB shares, they can still offer 5G access via the 5G access agreement.

The finance minister said the 5G infrastructure development is very important for Malaysia to build a digital-based economy with the potential to achieve various multiplier effects, such as a cumulative rise in the GDP of up to RM650 billion for the 2022-2030 period, as well as generate 750,000 skilled and high-income jobs.

“It will also benefit nine industries and sectors, and will encourage the development of 15 smart cities,” he said.

The Finance Ministry, via its equity shareholding in DNB, will ensure that the 5G network and infrastructure are developed as soon as possible, and that DNB remains on track to achieve 80% 5G coverage in populated areas by 2024.

Yesterday, U Mobile announced that it will not pursue investments in DNB for the deployment of 5G.

The telecommunication company (telco) said the decision was made after taking into consideration the terms of the investment as it currently stands, prior to extensive discussions and deliberations on the matter.

The telco believed that it would better serve Malaysians by focusing on its strengths of providing connectivity and digital services, that would realise the full potential of 5G technology.

Nevertheless, U Mobile said its decision not to invest in DNB does not affect its ability to provide 5G services to customers as access to DNB’s 5G network infrastructure is governed by a separate access agreement, which is not linked to the equity investment in DNB.

“U Mobile, along with the other telcos, is in discussion to finalise the 5G access agreement with DNB.

“Once it is finalised and signed, DNB’s 5G access when combined with U Mobile’s existing 4G network will enable U Mobile customers to enjoy a truly seamless connectivity experience,” it said in a statement.

The telco also said it has been testing 5G services and is looking forward to its customers enjoying the full benefits of 5G with its 5G-ready products and services soon.

U Mobile added that it is supportive of the government’s vision of a single wholesale network model for 5G deployment in Malaysia and is grateful to have been invited by the government to invest in DNB.

“U Mobile has full faith that DNB will be on schedule for the deployment of quality 5G network infrastructure and that it will carry out the government’s mandate to provide wholesale 5G coverage and capacity on an equitable and non-discriminatory basis via the 5G access agreement,” it said.

Previously, a report by Reuters stated that U Mobile and Maxis had decided to not take stakes in DNB.

The report, quoting sources, said both telcos could not see the benefits in being a minority shareholder of DNB, adding that the firms have told the government they want to remain in talks for access to DNB’s 5G network.

It further said that this decision has disrupted the government’s plan to sign agreements with other carriers and potentially throws the country’s 5G rollout into further disarray. — Additional reporting by S BIRRUNTHA