Malaysian mobile operators execute share subscription agreements with DNB

• MNOs expected to make 5G services available to users from Oct 2022
• DNB continues to work towards 80% coverage of populated areas by 2024

Finally. Malaysia’s Digital Nasional Bhd (DNB) announced yesterday that four mobile network operators (MNOs) – Celcom Axiata Bhd, Digi Telecommunications Sdn Bhd, YTL Communications Sdn Bhd (YES), and Telekom Malaysia Bhd (TM) – executed share subscription agreements (SSAs) to take up equity stakes in DNB. This leaves Maxis Bhd and UMobile Sdn Bhd as the two major operators that have declined to take up their allocated stakes in DNB.

The SSAs give effect to the MNOs’ subscription of 65% equity in DNB, with their respective stakes as follows: Celcom (12.5%), Digi (12.5%), YES (20%), TM (20%). The Government will retain the other 35% and hold a Golden Share. The Golden Share grants various rights and privileges and covers areas such as ownership, sale, or transfer of shares on the part of the Government.

The 12.5% shareholding each for Celcom and Digi is in recognition of their imminent merger. Under the terms of the SSA and the agreed governance structure between the parties, no single MNO can hold more than a 20% shareholding in DNB, and in the event of a merger between the MNOs, the merged entity cannot hold more than a 25% shareholding in DNB.

This marks a positive development following extensive discussions between the MNOs and DNB. It is anticipated that the MNOs will make 5G services available to their end users from October 2022 onwards.

“I am pleased that the MNOs have taken up the equity offered by the Government and have executed their SSAs with DNB. All parties will now work towards completing the conditions precedent in the SSAs, including executing the Access Agreements as soon as possible,” said DNB Chairman, Asri Hamidon.

Asri expects that all parties will make every effort to deliver 5G availability to all their Malaysian and global ‘roaming’ customers, adding, “The MNOs, in particular, have a crucial role to play in ensuring the accelerated adoption of 5G among end users. Over the longer term, they will be responsible for bringing to market a host of new 5G-enabled products and services which will have a positive impact on many businesses, be it small, medium or large, as well as Government.”

Meanwhile, DNB will continue to deploy 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. In addition, the local 5G ecosystem has grown rapidly, with 12 device brands now offering more than 100 5G-compatible models for use in Malaysia. As such, we are encouraged by the establishment of the infrastructure to facilitate the rapid adoption of 5G by the Rakyat, businesses, and Government,” Asri added.