KUALA LUMPUR (Sept 22): The Government has no plan to sell shares in its special purpose vehicle Digital Nasional Bhd (DNB) to local telecommunication companies to finance the nation's 5G rollout, which is expected to cost RM11 billion.
This is because there is no need to do so as the rollout does not involve government allocation because DNB is financing the rollout through market financing, among others, said Deputy Finance Minister II Yamani Hafez Musa in Parliament on Wednesday.
DNB, which was set up specially to undertake the deployment of 5G infrastructure and network nationwide, announced in July that Ericsson had been appointed to design and build the national 5G Network at a total cost of RM11 billion, compared to the initial estimate of RM15 billion.
At the time, DNB said there would be no government funding required for the 5G network roll-out, as Ericsson had undertaken to arrange financing for the supply, delivery, and management of the entire 5G network. DNB, meanwhile, would securitise future cash flows from its wholesale business via sukuk programmes to finance all other network operating expenditure and to repay financiers when they become due. DNB also said more than 60% of the sum to be spent on the network infrastructure will directly benefit Bumiputera interest in the telecommunications industry, as well as Bumiputera contractors.
Yamani, who was debating the King’s address, reiterated these in response to former Prime Minister Datuk Seri Najib Abdul Razak’s query on whether shares in DNB would be sold to telecommunications companies to help finance the multi-billion national project.
On Monday, independent lawmaker Syed Saddiq Syed Abdul Rahman called on the Public Accounts Committee (PAC) to investigate Malaysia’s 5G rollout, as he believed that taxpayers would have to shell out RM11 billion for the project. Syed Saddiq also claimed that Malaysia had departed from international standards by adopting a single monopoly system when it awarded Ericsson the contract to handle the 5G rollout in the country.
However, DNB revealed previously that its tender process had been structured by independent professional services firm Ernst & Young Consulting Sdn Bhd, and that it was done according to global standards and involved four panels, comprising some 50 local and international experts from across 10 countries with 5G network roll-out experience.
The process began with the initial evaluation of 14 network equipment providers, after which eight were shortlisted and invited to bid for the tender, according to DNB, who had also revealed the criteria on which those shortlisted were evaluated.
DNB also previously said that it was, together with Ericsson, on track to launch Malaysia's 5G network in areas within Kuala Lumpur, Putrajaya and Cyberjaya by December 2021, with the aim of achieving 80% nationwide population coverage by 2024.