KUALA LUMPUR (May 3): CelcomDigi Bhd, the merged entity of Celcom Axiata Bhd and DiGi.Com Bhd, has pulled out from participating in the equity of Digital Nasional Bhd (DNB) after Putrajaya said it will allow the formation of a second 5G network provider in the country as soon as next year.
The group said in a stock exchange filing that its wholly-owned subsidiaries, Digi Telecommunications Sdn Bhd and Celcom Mobile Sdn Bhd, have terminated their respective agreements to subscribe for a 12.5% stake each in DNB "as the long stop date to fulfil all the conditions precedent has lapsed".
CelcomDigi had announced on Oct 7 last year that there were 13 conditions precedent set out to be fulfilled, 12 of which — ranging from regulatory approvals to waivers from financiers — have to be done by Oct 30, while the final approval from shareholders has to be obtained before year-end.
So far, CelcomDigi has not called for a shareholder meeting for the approval of equity participation in DNB, based on stock exchange filings.
The termination of the agreements came just hours after Communication and Digital Minister Fahmi Fadzil announced on Wednesday (May 3) that the government has decided to tweak the 5G single wholesale network model, and allow a second 5G wholesale network to be established once DNB achieves 80% coverage of populated area by the end of this year.
Citing reasons like avoiding single point failure, Fahmi said it is necessary to allow a second network provider as a backup to fall back to whenever DNB’s services are down.
Last October, four mobile network operators — Celcom, Digi, YTL Communications Sdn Bhd and Telekom Malaysia Bhd — announced that they will collectively take up a 65% stake in DNB while Maxis Bhd and U Mobile Sdn Bhd opted out.
Shares of CelcomDigi closed four sen or 0.9% higher at RM4.44, giving the group a market capitalisation of RM52.09 billion.