PORT KLANG (Jan 17): U Mobile Sdn Bhd is confident it will be able to roll out the second 5G network without the need for government funding or new local partners, according to its chairman Tan Sri Vincent Tan Chee Yioun.

Citing his experience in the telecommunications industry, Tan said U Mobile plans to roll out the network in the next 15-18 months.

In a media briefing, he dismissed analysts' comments that U Mobile would struggle to roll out the second 5G network independently.

"Why don't we wait until 15 and 18 months and see the meaning of struggle? We were offered more loans than we needed. We are experienced [in this field]. I started Digi [many] years ago, then U Mobile and REDtone Digital Bhd (KL:REDTONE),” he told the media during a visitation to Pulau Ketam.

When asked about the potential collaboration, Tan ruled out local partners and said he is looking for a partnership with Chinese telecommunications suppliers, such as Huawei Technologies Co Ltd and ZTE Corp.

“We do not need new local partners. We are looking at Chinese suppliers, either Huawei or ZTE. They are the best in terms of 5G technology. They will be supplying the 5G equipment and provide financing. We need to fork out our own capex (capital expenditure) together with financing from the banks. But, everything is still not yet finalised,” Tan added.

He was also tight-lipped in regard to the capex required for rolling out the second 5G network.

On Jan 15, Hong Leong Investment Bank said in a note that U Mobile will likely struggle to roll out Malaysia’s second 5G network, pushing the company to even consider a merger. 

The research house noted that the deployment is “an uphill task for U Mobile considering its size and financials”.

Separately, Kenanga Research said the roll-out of the network could face delays as U Mobile must first finalise additional partnerships, appoint a 5G-advanced technology vendor, and secure financing, among other preparatory steps.

U Mobile may pick CelcomDigi Bhd (KL:CDB) as its partner, a possibility supported by their history of collaboration, though Maxis Bhd (KL:MAXIS) may still be roped in due to the small gap between their subscriber bases, making them a “viable option”, Kenanga said. 

On U Mobile, Tan plans to float the mobile network operator's shares on Bursa Malaysia by end-2025 and is working on its initial public offering (IPO). However, he did not provide details on the amount of money it hopes to raise.

“We are still working on the fund to raise…it is too early. We hope to submit the proposal by the next few months and be listed on Bursa Malaysia by the end of this year,” Tan said.

The mobile network operator’s IPO plans have been on the cards since 2016. It was initially targeted for 2018, and was later delayed to 2020.

Tan was reported in July last year as saying that U Mobile will go for an IPO after rejecting a buyout offer from Maxis. The news reported that U Mobile was planning to raise more than US$500 million (RM2.25 billion) in an IPO in Kuala Lumpur this year.

Founded in 2006, U Mobile is Malaysia's youngest telecommunications company with a network ready for 5G.

U Mobile has over 10,000 network sites nationwide. The telecommunications operator's subscriber base had reached nine million customers at end-2023, its website showed.

Separately, U Mobile has entered into a memorandum of understanding (MOU) with Sarawak Digital Economy Corp Bhd (SDEC) to establish a strategic partnership aimed at realising the ambitions of the Sarawak Digital Economy Blueprint 2030, which envisions a robust digital economy as well as an inclusive digital society for the state by 2030.

To achieve this, U Mobile will work with SDEC on initiatives that accelerate digital transformation for small and medium enterprises (SMEs) in Sarawak, as well as narrow the digital divide for those in underserved areas.

Through this partnership, U Mobile and SDEC will collaborate to drive the adoption of 5G technologies and solutions in Sarawak’s SMEs, U Mobile said in a statement.

This includes providing 5G network connectivity, educational programmes, devices, and innovative use case solutions to empower local businesses and enhance their competitiveness in the digital economy.

"By collaborating with SDEC, we aim to empower Sarawak’s communities and businesses with cutting-edge 5G technology and digital solutions, ensuring that no one is left behind in the journey towards a digitally connected future. We are proud to play a role in supporting Sarawak’s vision to build an inclusive and green digital economy by 2030,” said U Mobile chief sales officer Alex Tan in the statement.

SDEC chief executive officer Datuk Sudarnoto Osman said fostering industry collaboration, including exploring potential 5G use cases with U Mobile, is essential to ensuring Sarawak remains at the forefront of technological advancements.

"Our focus remains on empowering the people and businesses of Sarawak with access to cutting-edge digital solutions, driving sustainable growth and innovation," Sudarnoto added.

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