KUALA LUMPUR (Oct 11): Axiata Group Bhd led mobile network operators’ (MNOs) decline on Tuesday (Oct 11) morning following the announcement of equity investment into the country’s 5G network special purpose vehicle Digital Nasional Bhd (DNB) last Friday.
Axiata, a KLCI constituent stock, was down as much as 5.3% in early trade, before paring losses to trade 13 sen or 4.9% lower at RM2.52, its lowest in over 12 years, valuing the regional MNO at RM23.03 billion.
DiGi.Com Bhd declined slightly by two sen or 0.6% to RM3.43 per share, while fixed line network provider Telekom Malaysia Bhd (TM) bucked the overall bearish sentiment, gaining as much as 1.7% before paring gains to trade seven sen or 1.4% higher at RM5.25.
Maxis Bhd, which opted out of the equity investment, fell seven sen or 2% to RM3.46 on Tuesday morning.
Last Friday, four MNOs — Celcom Axiata Bhd, Digi Telecommunications Sdn Bhd, YTL Communications Sdn Bhd, and TM — executed share subscription agreements (SSAs) to collectively take up a 65% stake in DNB, while Maxis and U Mobile Sdn Bhd opted out of the deal.
Both Axiata and DiGi.Com told Bursa Malaysia that their equity investments into DNB would involve RM178.47 million cash for 12.5% stake each in the 5G network provider.
TM, meanwhile, will be investing RM285.61 million for a 20% stake in DNB.
It is worth noting that theedgemarkets.com also reported last week, citing anonymous sources, that the country’s six MNOs — including Maxis and U Mobile — have reached agreements on the terms in their respective access agreements (AAs) with DNB to lease DNB’s 5G network.
The execution of the AAs are subject to final approvals by Oct 30 by the boards of these telcos, which have reportedly ironed out issues that they were facing earlier and have decided to subscribe to DNB’s 5G network that is being rolled out nationwide.
The execution of the AAs will be a major milestone, as this will mean 5G services will be made available to Malaysians soon by the six MNOs.