[UPDATED] Six telcos agree to hold DNB equity stakes for 5G roll-out: Annuar Musa

KUALA LUMPUR – Six telecommunications companies have agreed to hold equity stakes in Digital Nasional Bhd (DNB), said Communications and Multimedia Minister Tan Sri Annuar Musa.

He said an announcement on the telcos’ entry into the Finance Ministry-owned special purpose vehicle for the nation’s roll-out of 5G broadband services will be made next week, reported Bernama.

This comes after industry insiders told Singapore’s Straits Times that Malaysian telco giants have agreed on the shared ownership of DNB.

The industry insiders yesterday said the companies were currently conducting due diligence on the deal that is expected to be reached within a fortnight.

This comes ahead of the government’s June 30 deadline for the telcos to sign up for the single wholesale network run by DNB.

The Straits Times report also noted that the Malaysian Communications and Multimedia Commission (MCMC) would be overseeing the price review for the agreement with the telcos, which would be done every three years.

Previously, the country’s four major telcos – Celcom, Digi, Maxis, and U Mobile, collectively known in the industry by the CDMU moniker – have previously resisted the implementation of the national 5G service by DNB.

DNB has been tasked to build the nation’s infrastructure for 5G, which is the next exciting stage of mobile telephony, and telcos would need to subscribe for access and subsequently offer products and services to consumers.

From the start, CDMU members resisted the DNB plan and had proposed their own competing networks, suggesting that it was not a well-thought-out plan.

Instead, they proposed their own plan, which was seen as more of an act of self-preservation.

When the government persisted, they grudgingly accepted it, but soon coalesced into the CDMU we know now. They took unified stands on everything related to 5G and DNB.

They even came out with common statements that carried all their brands, spoke in one voice and requested meetings with the authorities, interestingly excluding all other industry players, including the biggest of them all – Telekom Malaysia Bhd.

Last week, Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz insisted the 5G network roll-out is ultimately a matter of national interest meant to uplift Malaysians and should not be considered merely through the commercial needs of the telcos.

Tengku Zafrul told the Straits Times that the 5G network will boost the economy by RM650 billion and create 750,000 high-value jobs between now and 2030.

He also stated that priority will be given to local telcos to hold equity in DNB, despite interest from other foreign and domestic investors.

However, he said no investor may own more than 20% of DNB – or 25% in the event of a merger among equity stakeholders.

The Finance Ministry will hold 30% of DNB, however, if only a few telcos invest in the special purpose vehicle, the ministry will take up any remaining shares, based on the maximum telcos’ shareholding of 20% to 25%.

Overall the project is expected to cost some RM16.5 billion over the next 10 years to cover 80% of the country’s populated areas, said Tengku Zafrul.

He also expressed hope for all telcos to take up the necessary shares and sign up for the 5G network contracts. 

Similarly, Annuar also stated that the government will look into issuing licences to new players if there is a lack of interest from established telcos to buy shares in DNB. – The Vibes, June 30, 2022