KUALA LUMPUR (March 29): U Mobile Sdn Bhd announced on Saturday that it has received the official letter of award from the Malaysian Communications and Multimedia Commission (MCMC) for the deployment of Malaysia's next-generation 5G network, and that it is excited to commence the roll-out.

“U Mobile is honoured to receive the confidence from the Malaysian government and the MCMC to implement Malaysia’s newest 5G network. With this mandate, U Mobile looks forward to playing a more critical role in realising the government’s ambitions to make Malaysia a regional leader in the digital economy by delivering a superior experience through our enterprise-grade next-gen 5G network," said U Mobile chief executive officer Wong Heang Tuck in a statement.

"We are committed to supporting the nation’s digital transformation by driving 5G adoption, supporting Malaysia’s aim of becoming a high-income digital nation,” Wong added.

U Mobile also lauded the government's strategic dual network vision for 5G, highlighting its potential to enhance industry sustainability, promote competition, and foster innovation.

It also expressed confidence that it would, leveraging its over 17 years of experience, deliver a cutting-edge 5G network, with a superior 5G and 5G-Advanced experience for all Malaysians.

The MCMC first announced U Mobile, linked to tycoon Tan Sri Vincent Tan Chee Yioun, as the selected implementer of Malaysia's second 5G network on Nov 1, 2024. The MCMC cited a "rigorously undertaken process encompassing detailed deliberations on technical and commercial aspects", without elaborating on the specifics.

The selection surprised many, as U Mobile is significantly smaller than competitors CelcomDigi Bhd (KL:CDB) and Maxis Bhd (KL:MAXIS) in subscriber base and financial strength. U Mobile stated that it would collaborate with stakeholders, including the MCMC and other telcos like CelcomDigi and Telekom Malaysia Bhd (KL:TM), subject to MCMC approval, for the 5G roll-out.

The announcement triggered demands from various quarters — government backbenchers, opposition politicians, and industry players — for greater clarity of U Mobile’s proposal merits and clear investment guidelines for potential partnerships. Questions also arose regarding a significant foreign shareholding in U Mobile, specifically under Singapore's Temasek Holdings Pte Ltd, which was reportedly as high as 71%.

In response, the MCMC issued a statement explaining the selection of U Mobile, citing factors such as its business and technical plans, complaint records, customer satisfaction, and infrastructure project track records.

Subsequently, Temasek's Singapore Technologies Telemedia Pte Ltd announced that it would sell a majority stake in U Mobile to Mawar Setia Sdn Bhd — owned by Tan and Johor princess Tunku Tun Aminah Sultan Ibrahim — which would reduce its stake to 20%. Tun Aminah is the daughter of the King, Sultan Ibrahim Sultan Iskandar.

Malaysian telcos had been lobbying for a second network since the establishment of Digital Nasional Bhd (DNB), a Ministry of Finance-linked company, as the sole 5G wholesale provider. The unity government agreed to this, and opted for a dual 5G network, after DNB achieved 80% coverage in populated areas.

Currently, CelcomDigi, Maxis, U Mobile and YTL Communications Sdn Bhd, a subsidiary of YTL Power International Bhd (KL:YTLPOWR), each hold a 16.3% stake in DNB. The government, through Minister of Finance Inc (MOF Inc), retains approximately 34.9% equity and a special share.

DNB had projected RM16.5 billion for the 10-year 5G network development, financed by private loans, stating it wouldn't require government funds. The transition to a dual network, however, raised concerns about DNB’s role and financial sustainability, given its loan obligations.

Digital Minister Gobind Singh Deo stated last month that DNB had been restructured following the dual network decision, without providing details. 

He added that the government would receive payment for its DNB shares, which it would transfer to the telcos per their shareholders’ agreement. Government loans to DNB, including interest, would also be repaid by telco shareholders, while government-guaranteed loans would be refinanced, releasing government obligations.

Gobind also said the government had made a RM500 million equity injection into DNB in 2021, and a RM450 million shareholder loan via MOF Inc in May 2023, to support its initial operational activities.

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