This article first appeared in The Edge Malaysia Weekly on December 8, 2025 - December 14, 2025

ALMOST four years after enabling Malaysia’s first 5G wireless service in December 2021, Digital Nasional Bhd (DNB) has been promised an additional 100MHz of spectrum for 5G, just ahead of the government’s exit that turns DNB into a privately owned entity — sweetening the deal for its remaining three mobile network operator (MNO) shareholders.

“We have had a bit of disruption, right? Certain spectrum [100MHz out of its initial 200MHz] was taken away from us, but now, it is being reassigned to DNB. I want to first thank the government and our three MNO shareholders who have been very supportive of us since signing the share subscription agreement in [June] 2024,” DNB CEO Datuk Azman Ismail says, referring to the government’s decision to move from a single wholesale network (SWN) to a dual 5G network that DNB “fully supports”.

Having undergone network deployment, as well as transformation and optimisation that lowered the total cost of ownership (TCO) from RM17.2 billion to RM13.2 billion, DNB is now in the “renewal and growth” phase by leveraging on the strengths of its three MNO shareholders, Azman tells  in an interview at DNB headquarters on level 12 of The Exchange 106 in Kuala Lumpur.

Citing the existence of a rival 5G network, he declines to provide specific breakdowns on how the RM4 billion in cost savings was arrived at, only saying that DNB was restructured for better efficiency and lower corporate and network costs with support from its MNO shareholders.

Thanks to the new allocation of 100MHz spectrum in the 3300MHz to 3400MHz frequency band for 5G network implementation, DNB now has 200MHz in the 3300MHz to 3500MHz frequency band, DNB chief corporate officer Datuk Ahmad Zaki Zahid affirms.

Given that some 84.2% of 5G traffic from close to 29 million users runs through DNB’s network, the additional 100MHz is significant for user experience, especially the delivery of 5G enterprise solutions, says DNB chief technology officer Ken Tan Tzi Kieng.

Those familiar with the technical parts of 5G would know that DNB was left with 100MHz in the 3400MHz to 3500MHz frequency band after ceding a 100MHz block in the 3500MHz to 3600MHz frequency band from its original 200MHz 5G spectrum allocation to the second 5G network operator under U Mobile Sdn Bhd, which won the bid on Nov 1, 2024.

The new 100MHz block in the 3300MHz to 3400MHz frequency band being assigned to DNB is a different block but is still contiguous with its existing spectrum, another critical factor for network rollout for better user experience, says Tan.

Relevant regulatory processes are being undertaken for the conversion of the existing 5G spectrum to DNB — in the 3300MHz to 3500MHz band as well as the 703MHz to 723MHz paired with the 758MHz to 778MHz bands — from apparatus assignments to spectrum assignments, according to the Ministerial Direction on 5G Network Implementation No 7 of 2025.

“The Minister [of Communications] may at any time vary, modify or revoke this direction,” states the ministerial directive dated Oct 29 this year.

Tenures for apparatus assignments are short, usually renewable annually, whereas spectrum assignments are typically at least 10 to 15 years long, Ahmad Zaki explains.

With the ministerial direction issued, DNB expects to officially receive the 100MHz spectrum assignment by the first quarter of 2026, Azman says, letting on that the tenure could be longer than 15 years.

Incidentally, DNB’s three MNO shareholders — CelcomDigi Bhd (KL:CDB), Maxis Bhd (KL:MAXIS) and YTL Power International Bhd (KL:YTLPOWR) — have been given two months from Dec 1, 2025 to each pay RM327.87 million, or RM983.62 million collectively, to take over the Ministry of Finance Inc’s equity interest in DNB following the exercise of a put option.

The two months will expire by end-January 2026, which is well within the first quarter of 2026.

In separate announcements dated Dec 2, CelcomDigi and Maxis said they would make further announcements when there are material developments on the put option.

DNB’s Azman says the government will still have a golden share for two years and can appoint a representative on DNB’s board after exercising the put option to be bought out by the remaining three MNOs.

“It could be anyone, not necessarily someone within the government,” Azman says, when asked whether the government’s representative on the DNB board would be from the Ministry of Finance.

At present, the government has two representatives on DNB’s board, namely Treasury secretary-general Datuk Johan Merican as non-executive chairman and Ministry of Digital deputy secretary general (digital development) Ma Sivanesan Marimuthu.

DNB’s other board members are YTL Power managing director Datuk Seri Yeoh Seok Hong, CelcomDigi chief transformation officer Datuk Kamal Khalid, and Maxis audit and risk committee chairman Uthaya Kumar Vivekananda.

There remains persistent market talk and perception that Maxis could also leave DNB.

CelcomDigi had previously requested permission to use existing spectrum to roll out 5G services, something technical experts call “spectrum neutrality”, which existed before 2021 when the government decided to create DNB as an SWN and assigned all 5G spectrum to the latter.

When asked about DNB’s contingency plan in the event another one or two of its shareholders choose to exit, Azman assures that all three MNOs are committed to DNB. He also points out that current wholesale access agreements signed in October 2022 with the MNOs, including U Mobile, remain in effect through October 2032.

Ahmad Zaki, meanwhile, says DNB is working on new access agreements for its shareholders and potential access seekers of its 5G network, given that the existing access agreement was reached before there was a second rival 5G network.

He does not provide a timeline for when the new agreements are to be sealed but agrees that terms that address any additional shareholder exit will be addressed.

What if DNB is asked to give up 100MHz of spectrum again to create a third 5G network?

Noting cost savings from the sharing of active and passive infrastructure, DNB’s Tan admits its three MNO shareholders have different needs but have come to appreciate the current shared model better compared to when the idea first surfaced.

Referring to DNB’s network as a “critical network asset and backbone for Malaysia’s digital infrastructure”, Tan says a longer spectrum tenure gives shareholders greater incentive to invest in the network, which is important for user experience.

Tan admits the loss of 100MHz of spectrum affected 5G network quality but notes that the surge in 5G adoption today, compared to four years ago, means capacity investment in DNB’s 5G network going forward would be more demand-driven rather than supply-led.

While he is unable to say how much total wireless mobile communication traffic is now served by 5G versus 4G or other technologies, he concurs that DNB’s three MNO shareholders could choose to shift more traffic from their respective networks to DNB’s 5G network and save on individual capital expenditure (capex).

According to Tan, cost savings achieved by active and passive infrastructure sharing done in Malaysia among at least three MNOs through the DNB structure have garnered interest from other countries, including Singapore and Australia.

Azman declines to say when DNB is expected to break even, noting that the timeline can be affected by the new access agreement being negotiated. Tan admits that the increase in demand for 5G could also change the equation.

DNB posted RM1.21 billion in losses for FY2024 on the back of RM341.17 million revenue, according to company filings. Retained losses were RM3.16 billion, with total liabilities of RM6.42 billion exceeding total assets of RM4.69 billion by RM1.73 billion.

Analysts have voiced concerns over the potential impact on DNB’s numbers on earnings, cash flow and dividend payouts by CelcomDigi and Maxis. They do not rule out the possibility of better support for DNB to hasten break-even, especially if it has been decided that the MNOs are in for the long haul.

On its part, Azman says DNB remains fair to all three MNO shareholders and is committed to partner them to deliver strategic solutions towards realising the government’s “AI Nation” aspirations. Pointing to a nearby e-SIM-connected laptop as an example, he says entire government offices that handle sensitive information could be a lot more secure compared to the current solutions based on WiFi technology. He is confident that DNB will achieve financial sustainability with the support of its MNO shareholders.

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