KUALA LUMPUR (Oct 8): The country’s six mobile network operators (MNOs) have reached agreements on the terms in their respective access agreements (AAs) with Digital Nasional Bhd (DNB) to lease the latter’s 5G network.
The execution of AAs are subject to final board approvals, according to sources familiar with the telcos, by Oct 30.
It is understood that the six telcos — including Maxis Bhd and U Mobile Sdn Bhd, both of whom have opted out of taking a stake in DNB — have ironed 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.
On Friday (Oct 7), DNB announced that it had executed share subscription agreements (SSAs) with four telcos — namely Celcom Axiata Bhd, Digi Telecommunications Sdn Bhd, YTL Communications Sdn Bhd and Telekom Malaysia Bhd (TM) — which will collectively take up a 65% stake in the special purpose vehicle (SPV).
Both Celcom Axiata and Digi Telecommunications will each take up a 12.5% stake, while YTL Communications and TM will have 20% each. The Ministry of Finance (MOF) will hold the remaining 35% stake.
DNB noted in a statement that the 12.5% shareholding each for Celcom Axiata and Digi Telecommunications is in recognition of their imminent merger.
Axiata, Digi.Com Bhd and TM announced to Bursa Malaysia on Friday that they entered conditional SSAs with DNB.
In the filings to the stock exchange, the MNOs noted that the SSA is conditional upon the execution of AAs, among others.
DNB said it is currently deploying the 5G network and infrastructure on an accelerated schedule, with a target of 80% coverage of populated areas by 2024.
“As of today, the 5G network has achieved 33% coverage of populated areas, as against a 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,” said DNB chairman Datuk Seri Asri Hamidon.
Asri said the local 5G ecosystem has grown rapidly, with 12 device brands now offering more than 100 5G-compatible models for use in Malaysia.
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 turn down the offer, saying they could not see benefits in being a minority shareholder in DNB.
Note: The article has been updated for accuracy.