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The company says the deal will not impact its ability to provide 5G services to customers
Malaysia’s approach to 5G has been highly controversial. Rather than auction 5G frequency licences to telcos, as is the norm in most countries around the world, the Malaysian government instead opted to set up a state-owned 5G wholesaler, Digital Nasional Berhad (DNB), in early 2021.
Malaysia’s five major mobile operators – CelcomDigi, Maxis, U Mobile, Telekom Malaysia, and YTL Communications – were initially highly resistant to working with DNB, arguing that they could rollout 5G infrastructure far more effectively as individuals. Ultimately, however, after over a year of stagnant negotiations and government threats, the five companies all agreed to sign 5G agreements with DNB, as well as each acquiring a 14% stake in the business.
In total, this would see 70% of DNB owned by the operators, with the government holding the remaining 30%.
The operators were given until June 21 this year to complete Share Subscription Agreements with DNB, a deadline which was met by all the operators apart from Telekom Malaysia, which sought an extension until August 21st. At the time, Telekom said it was waiting for shareholder approval from an extraordinary general meeting.
Now, with the extended deadline expiring over a week ago and DNB rejecting requests for further delays, the stake sale to Telekom Malaysia has been cancelled.
The decision will leave the four participating telcos with 16.28% stakes in the business, for a collective stake of 65.12%, as per a contingency plan devised by the Ministry of Finance.
Telekom have been quick to point out that this failure to secure a stake in DNB will not impact the company’s ability to provide 5G services to customers, with the companies’ wholesale deal unaffected.
“This turn of event does not affect TM’s current 5G offerings to customers, as its 5G wholesale service subscription from DNB remains in place,” explained Telekom in a statement.
It is worth noting here that DNB may soon have direct competition in Malaysia’s 5G arena. The government is currently seeking an operator partner to help set up a second national 5G wholesaler, with communications minister Fahmi Fadzil noting that CelcomDigi, Maxis, Telekom Malaysia, and U Mobile have all submitted bids to be selected as the government’s 5G partner.
If selected, provisions are in place that would see the winning company divest of any stake in DNB.
Fadzil says the government is likely to choose a winner by the end of the year.
It is unclear whether this bidding process was a factor in Telekom’s delayed approach to acquiring a stake in DNB.
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