KUALA LUMPUR (Oct 7): Four mobile network operators (MNOs) — Celcom Axiata Bhd, Digi Telecommunications Sdn Bhd, YTL Communications Sdn Bhd, and Telekom Malaysia Bhd (TM) — have executed share subscription agreements (SSAs) to collectively take up a 65% stake in Digital Nasional Bhd (DNB), while their two peers, namely Maxis Bhd and U Mobile Sdn Bhd, have opted out.
The SSAs give effect to the MNOs' subscription of 65% equity in DNB — Celcom Axiata (12.5%), Digi Telecommunications (12.5%), YTL Communications (20%), and TM (20%).
The government on the other hand will retain the remaining 35% stake and hold a golden share, which grants various rights and privileges, as well as covers areas such as ownership, sale, or transfer of shares on the part of the government.
To recap, DNB's original plan was to offer a 70% stake to the six MNOs, which were initially allowed to take an 11.67% stake each under the SSAs.
However, Maxis and U Mobile subsequently decided to withdraw from the 5G programme, saying they could not see benefits in being a minority shareholder of DNB.
Therefore, each of the four telcos is now taking a bigger stake, while the government also owns an additional 5% stake (from 30% to 35%).
In a press statement on Friday (Oct 7), DNB xplained that the 12.5% shareholding each for Celcom Axiata and Digi Telecommunications is in recognition of their imminent merger.
Under the terms of the SSAs and the agreed governance structure between the parties, no single MNO can hold more than a 20% shareholding in DNB, and in the event of a merger between the MNOs, the merged entity cannot hold more than a 25% shareholding in DNB.
DNB, the special-purpose vehicle set up to roll out the 5G network nationwide, said this marks a positive development following extensive discussions between the MNOs and DNB.
It is also anticipating that the MNOs will make 5G services available to their end users from October onwards.
"All parties will now work towards completing the conditions precedent in the SSAs, including executing the access agreements as soon as possible. I expect that all parties will make every effort to deliver 5G availability to all their Malaysian and global 'roaming' customers.
"The MNOs, in particular, have a crucial role to play in ensuring the accelerated adoption of 5G among end users," said DNB chairman Datuk Seri Asri Hamidon.
Over the longer term, Asri noted they will be responsible for bringing to market a host of new 5G-enabled products and services which will have a positive impact on many businesses, be it small, medium or large, as well as the government.
Meanwhile, DNB will continue to deploy the 5G network and infrastructure on an accelerated schedule, targeting 80% coverage of populated areas by 2024.
To date, Asri disclosed that DNB's 5G network has achieved 33% coverage of populated areas against the target of approximately 40% by end-2022.
"The testing and integration of 5G sites by the MNOs have progressed well and I believe they are ready to provide 5G services to end users located in areas where 5G infrastructure is currently available.
In addition, the local 5G ecosystem has grown rapidly, with 12 device brands now offering more than 100 5G-compatible models for use in Malaysia.
"As such, we are encouraged by the establishment of the infrastructure to facilitate the rapid adoption of 5G by the rakyat, businesses, and government," added Asri.