KUALA LUMPUR (Oct 26): The government is expected to seal deals with local mobile network operators (MNOs) for the latter to acquire stakes in Digital Nasional Bhd (DNB) this year, despite the delay caused by the review of “some details”, according to Communications and Digital Minister Fahmi Fadzil.
The initial target was to have the MNOs sign the share subscription agreement (SSA) this month.
However, it is not known how many MNOs will acquire a stake in DNB, considering a second 5G network is permitted for telecommunications companies (telcos) that are keen to invest.
Last month, Fahmi reiterated that all of the five MNOs — CelcomDigi Bhd, Maxis Bhd, Telekom Malaysia Bhd, U Mobile Sdn Bhd and YTL Communications Sdn Bhd — will hold equal stakes in currently government-owned 5G network infrastructure outfit DNB.
Speaking to the media after he officiated DNB’s 5G Experience Centre here at The Exchange 106 on Thursday, Fahmi disclosed that the process of reviewing the SSA for stakes in DNB has been completed.
“I had hoped that it could be done within the month of October, but there was some slight delay, because there were some details that we had to review.
“I'm happy to say that the review is done. So, we can communicate this with the respective MNOs, and then we can, Inshallah (God willing), if everything is okay, we can probably proceed in a short period of time,” Fahmi told a press conference.
The minister declined to reveal the specific terms in the SSA that were reviewed by both the federal government and MNOs.
“There are some things that have been discussed, and there were some proposals, counter-proposals, some discussions, some analysis that needed to be done, some assessments from the technical point of view, and from the financial aspect.
“And these things do take a bit of time, but I am happy to say that we are almost ready to announce a date for signing. I just need to have a quick word with all of the MNOs very soon,” he said.
Speculation is rife that some local MNOs are not interested in taking a stake in DNB shares, while waiting to participate in rolling out the second 5G network, dubbed Entity B.
Prime Minister Datuk Seri Anwar Ibrahim reportedly said Huawei is slated to play a major role in the second 5G network. It is not clear how the Chinese network infrastructure provider was selected, as the government did not seem to have conducted an open tender process for the matter.
Different opinions on second 5G network
Fahmi acknowledged that there were differences in opinions among the Ministry of Finance (MOF), MNOs, DNB, and the Malaysian Communications and Multimedia Commission (MCMC).
“I'm very thankful, to the ministry, MCMC, DNB, the MNOs and MOF, for helping and facilitating, ensuring that the environment is conducive for dialogue, for discussions,” he said.
“[There were] some disagreements, but ultimately a way forward for the nation. So, that's what I can comment on,” he added.
In May, the government announced that it will allow a second 5G network to operate from next year, on the grounds that this would help avoid single-point failure when only one entity handles the country’s 5G infrastructure.
The single wholesale network (SWN) adopted by DNB aims at expediting the roll-out of the 5G network, and to also reduce the capital expenditure burden on the MNOs as they are not required to invest in 5G infrastructure. The cost savings will be passed to the public in the form of lower tariffs. In short, the retail price for 5G should be lower than 4G service in the SWN model.
Nonetheless, with the second network to be rolled out later, this raises uncertainties if the retail tariff of 5G will be lower than 4G eventually.