Zafrul: DNB stakes for 5G rollout may be opened to new players

Zafrul: DNB stakes for 5G rollout may be opened to new players
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KUALA LUMPUR (June 17): The Ministry of Finance (MOF) will not extend the June 30 deadline for telcos to finalise their decisions on the purchase of a stake in Digital Nasional Bhd (DNB) and to sign up for 5G network contracts.

Should any existing telcos decline to take up a stake in DNB — the special-purpose vehicle set up to rollout 5G network nationwide — the government will consider other options such as issuing licences to new players who are keen on offering 5G under the single network model, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz was quoted by Singapore's Straits Times as saying on Friday.

“If telcos, particularly the larger ones, continue to delay providing 5G services to their customers... his (Communications and Multimedia Minister Tan Sri Annuar Musa) Ministry will consider other options, such as issuing licences to new players to enable the speedy delivery of 5G services in the country.

“Indeed, the interests of Malaysia and its people must take precedence over the telcos' narrow commercial interests," he said.

Ahead of the June 30 deadline, the Big Four — namely Celcom Axiata Bhd, Bhd, Maxis Bhd and U Mobile Sdn Bhd or collectively known as CDMU — have insisted on holding a controlling 51% stake in DNB.

Tengku Zafrul’s views on the matter concurred with Annuar's who said on Tuesday (June 14) that licences will be issued to new players if the number of companies is not enough.

“I have high confidence that all telcos do not want to be left behind in providing 5G, which is why we take the policy of inviting everyone to come on board, but we cannot force them to join.

“Any company that participates in rolling out 5G, we will continue. If the number of companies is not enough, I will issue licences to new players. I'm not going to wait for anybody. I did say, please think about the importance of the national interest.

“We want to roll out 5G according to plan and the government has given space for existing players to come on board. Hence, we have set a dateline (June 30) which we feel is more than enough. Let them complete the negotiation,” Annuar said.

Nonetheless, Tengku Zafrul said an extension of the deadline to "early July, but no later than that" is possible if it is required to tie up loose ends. That said, a term sheet laying out "the main terms of governance, and the equity issues" will be ready in June.

Currently, only Telekom Malaysia Bhd and YTL Communications Sdn Bhd (YES) have opted to take an equity stake with DNB, with the latter (YES) becoming the first telco in the nation to offer its 5G service network to the public.

Recall that in March, the government announced that DNB would retain the SWN model for the nation’s 5G mobile telecommunication network and would offer a 70% stake in DNB to mobile network operators (MNOs).

In April, CDMU, however, said they had yet to agree to the key terms in DNB’s published reference access offer. This was followed by Annuar’s confirmation last month that CDMU wants to have a controlling interest of 51% in DNB. The government was firm on not allowing any telco having a higher stake in DNB.

Under the SWN model, DNB will own 5G infrastructure assets nationwide and lease it to MNOs, as opposed to MNOs developing and owning their own towers, as was practised during the 4G rollout.

Malaysia’s 5G network coverage is targeted to reach 80% of the population by end-2024.

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Malaysia's biggest telcos seek majority stake in 5G agency — document
5G discussion still ongoing as concerns remain, say MNOs
Big Four telcos seek ‘typical M&A’ process for DNB’s equity stake offer

Lee Weng Khuen