KUALA LUMPUR (Dec 1): Digital Nasional Bhd (DNB) is to be 70%-owned by five local mobile network operators (MNOs), while the remaining 30% will be retained by Putrajaya, accompanied by a golden share, according to Communications and Digital Minister Fahmi Fadzil.
The five MNOs — comprising CelcomDigi Bhd, Maxis Bhd, Telekom Malaysia Bhd, U Mobile Sdn Bhd and YTL Communications Sdn Bhd — finally inked share subscription agreements (SSAs) with DNB and the Ministry of Finance Incorporated (MOF Inc) to subscribe to a 14% stake each in the government-owned 5G network infrastructure outfit.
In exchange for the respective 14% stakes, each telco will inject RM233 million into DNB, which the latter will utilise to meet its funding requirements — currently focused on achieving coverage of populated areas (CoPA) of 80%.
The SSAs are expected to be completed between February and April 2024, subject to a due diligence process being completed by the MNOs.
Beyond this, details on the SSAs and their effect, which were disclosed by Fahmi, were limited at best.
When asked in detail about the SSA — rights provided by the government’s golden share; DNB’s board composition; exit clause for MNOs interested in the second network of Entity B; and impact on DNB’s mandate — Fahmi deflected these queries by saying, “Ask the MOF (Ministry of Finance)/ Ministry of Communication and Digital’s (KKD) secretary general/ future DNB chairman later,” during a press conference on Friday.
According to a KKD document provided after the event, the special share provides certain rights to its holder — including on national interest and the appointment of a director representing MOF Inc. This is in addition to MOF Inc’s rights as ordinary shareholder.
Touching on the second 5G network, Fahmi repeated that establishment of its operator — Entity B — would only be announced by the government once DNB’s 5G network attains a CoPA of 80%.
However, the KKD document provided also stated that MOF Inc “may exit from DNB upon DNB achieving the 80% CoPA target, and the determination by the authorities (Malaysian Communications and Multimedia Commission [MCMC]) on the commencement of the second 5G network”.
The 5G network’s CoPA currently stands at 73%.
Composition of second entity yet to be determined
On the composition of Entity B, Fahmi reiterated that the MNOs would either come to a mutual agreement, or a final decision will be made by MCMC.
“All the regulatory obligation, including spectrum allocation, licensing and others, will be applied on a non-discriminatory basis, so that both networks will be on a level playing field,” the KKD said, meaning that whatever regulatory obligations provided to DNB will also be made available to the second entity.
Fahmi stressed that the second entity will be purely commercial — meaning that the government will have no stake in it.
“Entity B will be a completely commercial entity, we will not have any stake in Entity B,” he said.
"So the second entity will be announced after we reach 80% CoPA, and at that time, each organisation will consider discussions and determine conclusively which one is ready to move to Entity B.
At the same time, MCMC will act as the overseeing party to ensure both entities compete fairly and ultimately provide benefits to the people," he added.