KUALA LUMPUR (July 1): Digital Nasional Bhd's (DNB) 70% stake sale may not result in equal shareholdings among participating local telecommunication players (telcos) in the event of a merger.
Chief executive officer Ralph Marshall said on Friday (July 1) that there are provisions made for arrangements to be done in the event of a merger among the six telcos.
“Well, so when that [merger] happens we will look at it again,” he told reporters after attending a special briefing on national 5G rollout to officials from the Ministry of Finance (MoF), Ministry of Communications and Multimedia, and Malaysian Communications and Multimedia Commission (MCMC) on Friday.
"They (the telcos) are allowed [to buy] 12%," Marshall said.
"If they (two of the telcos) merge, they will have 23% to 24%.
"They [will have to] pay for it. There is a limit as to how far it (telcos’ shareholdings) can go. The policies of DNB, the objective of DNB and the deliverables of DNB will all remain the same,” he said.
Marshall assures that ownership structure in DNB will not affect operation of the company.
“They as a shareholder, just like anybody else as a shareholder of a public company, the policy will all continue, no change of the policy, the processes and the objective,” he said.
Marshall added that the stake sale is expected to be completed in two months.
“It is still going through the process, it’s being finalised, the six MNOs (mobile network operators) have signed the reference access offer and they have also signed off on the term sheets, which will then lead to the shareholders' agreement and the [subsequent] completion of shareholders' arrangement, so that’s expected to take another two months,” he said.
On Thursday, Communications and Multimedia Minister Tan Sri Annuar Musa said six local telcos had agreed to take up stakes in DNB ahead of the June 30 deadline, and a total of 70% shareholdings will be spread among them.
Earlier on Wednesday, the MCMC said in a statement that it has “no objection” on the proposed merger between Digi Telecommunications Sdn Bhd, a unit of Digi.Com Bhd, and Axiata Group Bhd’s unit Celcom Axiata Bhd.
The two MNOs together with Maxis Bhd and U Mobile Sdn Bhd are the big four telcos in the country, dubbed CDMU, who had sought a majority stake in DNB, according to reports in May.
No discount on wholesale pricing
On a related matter, Marshall denied a recent media report that DNB wholesale pricing would be discounted until its 5G population coverage achieves 80% nationwide.
“I think that is erroneous,” he said. “We do have 5G available for free until June 30, which was yesterday, that is for anybody who now uses 5G.
“Whoever offers 5G services will end up having to pay for it until the signing of access agreement.
“Once the access agreements are signed, I would think that it would be reasonable to expect some availability of 5G at special prices or hope it would be free, depending on the banks, if the banks say yes, it’s okay. At least until August 31,” he explained.
Marshall updated that DNB’s 5G roll-out had reached 25%, and is on track to meet the 40% target by year end.
“It will be there. It will be available. All of Kuala Lumpur, the Klang Valley, big parts of Selangor, Johor and Penang will all have 5G available by the end of this year and soon after the rest of the country,” he said.