This article first appeared in The Edge Malaysia Weekly on March 23, 2026 - March 29, 2026

ALL three of Digital Nasional Bhd’s (DNB) mobile network operator (MNO) shareholders have paid a collective RM983.62 million to buy out the Minister of Finance Inc’s (MoF Inc) stake in Malaysia’s first 5G network provider following the exercise of its put option on Dec 1, 2025. This makes DNB a privately owned entity, equally owned by the three MNOs, with the government holding a “golden share”.

Yet a one-month difference in timing between the payments and the ongoing dispute between DNB and Telekom Malaysia Bhd (KL:TM) raise the question of whether the long-drawn-out uncertainties over DNB’s shareholding and spectrum are finally over.

YTL Power International Bhd’s (KL:YTLPOWR) YTL Communications Sdn Bhd — whose YES brand was the earliest to launch 5G commercial services in Malaysia in May 2022 — was the first of the three remaining MNO shareholders to pay RM327.9 million to MoF Inc to raise its stake in DNB to 33.3%.

YTL paid on Wednesday, Feb 4 — just meeting the two-month deadline for MoF Inc’s put option, considering the public holiday-shortened week to observe Thaipusam and Federal Territories Day on Feb 1.

Just over one month later — late evening on Friday, March 6 — CelcomDigi Bhd (KL:CDB) and Maxis Bhd (KL:MAXIS) separately announced to Bursa Malaysia that they, too, had each paid RM327.9 million to MoF Inc, also taking over loans and shareholder advances plus interest.

The one-month difference is telling and lends credence to speculation of outstanding differences, given that CelcomDigi and Maxis were subject to the same deadline on the put option. The country’s two largest MNOs certainly would not have faced cash flow issues that could have prevented them from paying one month earlier.

Maxis’ and CelcomDigi’s payments came three days after DNB on March 3 rejected TM’s early termination of its 5G wholesale network access agreement, which runs until October 2032 and which DNB says “remains valid, binding and enforceable”.

DNB’s statement came six days after TM announced on Feb 25 a new 5G wholesale network access contract with U Mobile Sdn Bhd, the second 5G network operator, “as part of its approach to strengthen mobile competitiveness and advance its convergence ambitions”.

“In connection with this transition, TM has exercised its contractual rights under the existing 5G Access Agreement with DNB, in accordance with the terms of the agreement and subject to regulatory processes and requirements,” TM said in a statement on Feb 25.

“The introduction of the government’s dual 5G network framework provides the opportunity for TM to evaluate options that best support long-term competitiveness and value of its convergence offerings,” it added, committing to “thoroughly” plan and carry out the transition of 5G services to ensure no disruption to customer experience. “Mobile services are a critical pillar of TM’s convergence ambitions, enabling integrated fixed, mobile content and smart services across consumer, SME and enterprise segments.”

Indications are that the matter will be arbitrated, first by the Malaysian Communications and Multimedia Commission (MCMC).

“The matter relates to a commercial agreement between DNB and TM. The specific terms and management of such agreement fall within the purview of the respective parties. As the industry regulator, the MCMC’s role includes ensuring all licensees comply with the applicable regulatory framework under the Communications and Multimedia Act 1998, in safeguarding, among others, the consumers’ interest,” an MCMC spokesman tells The Edge.

“MCMC is closely monitoring the situation and will take any appropriate action if required, in accordance with the relevant laws, to ensure that regulatory requirements and service continuity are upheld,” the spokesman says.

The regulator did not indicate under what conditions TM would be allowed to terminate its access agreement with DNB or whether it is likely to give TM regulatory consent.

Spokesmen from TM and DNB offer few additional clues on specific clauses or financial consideration at stake in their dispute.

“The Access Agreement provides mechanisms to address any differences in interpretation, and TM will pursue the appropriate processes under the agreement. As the matter is being addressed through contractual and regulatory processes, and both the Access Agreement and our arrangement with U Mobile are subject to strict confidentiality clauses, it would not be appropriate to comment further on specific provisions or commercially sensitive terms,” a TM spokesman said in response to questions from The Edge seeking clarity.

Asked if the dispute over its access agreement arose because DNB is no longer a single wholesale network, a DNB spokesman would only say, “This matter relates to a difference in interpretation of certain contractual provisions relating to early termination. DNB will pursue the appropriate avenues available to protect and enforce its contractual rights, with a view to resolving these differences in accordance with the processes under the access agreement and the law.”

While acknowledging that its commercial arrangements with all access seekers “clearly provide for early termination in the context of Malaysia’s transition to a dual-network model, subject to defined timelines and conditions”, the DNB spokesman said “only one Access Seeker, U Mobile, has previously exercised its right to terminate in accordance with the terms and specific conditions of the Access Agreement”.

“DNB remains financially viable as a supply-led infrastructure provider, having undertaken significant upfront investments in the early years of deployment, with strict cost management and long-term sustainability built into its model. DNB continues to remain focused on delivering a world-class, [competitively]-priced 5G network for the benefit of all stakeholders,” the spokesman added.

RHB Research analyst Jeffrey Tan leans towards TM going with U Mobile, telling clients in a March 9 note that TM’s 5G access agreement with U Mobile “should yield good savings in direct cost for TM, which saw a spike in FY2025 due to the shift to a fixed 5G access payment” — even if it would have to forgo RM127 million in unutilised prepaid capacity for DNB.

“TM said it has fully complied with the legal provisions and terms governing the termination of the wholesale access agreement with DNB, which allows access seekers to terminate the agreement within 30 days of the release of a reference access offer (RAO) by another access provider,” Tan writes, noting that U Mobile published its RAO on Jan 25, 2026.

“In the worst-case scenario, TM may need to continue the existing arrangement with DNB for another year (FY2027) with January 2028 being the long stop date for access seekers to terminate,” he adds, referring to the period of six years after the access agreement was inked.

Tan maintains a “buy” recommendation for TM, raising his target price to RM9.30 from RM8.90 after hiking his FY2026 to FY2028 forecasts and upgrading dividend assumptions “to reflect stronger capital management”.

CGS International analyst Prem Jearajasingam offers a different perspective on DNB’s shareholding change. While CelcomDigi and Maxis could benefit from lower capital expenditure (capex) by sharing costs instead of making individual network rollouts, he foresees “medium-term risks for the incumbent mobile operators — Maxis and CelcomDigi — [should] U Mobile reduce prices for mobile virtual network operators (MVNOs) to secure cash flows to fund its own network rollout, thus increasing the risk of competition in the Malaysian mobile sector and weighing on future margins”.

“The recent announcement by TM that it plans to switch its 5G access provider to U Mobile due to lower costs and is willing to forfeit RM127 million in prepaid access fees supports this thesis,” he writes in a March 9 note. He maintains “hold” calls on CelcomDigi (target price: RM3.38) and Maxis (target price: RM4), and an “add” call on TM (target price: RM8.80).

Notably, both YTL and TM — then the youngest and only all-4G network provider, and oldest telecommunications provider respectively with a collective 4.5 million subscribers — were DNB’s first customers for its 5G network when the free 5G trials for Putrajaya, Cyberjaya and Kuala Lumpur were conducted from Dec 15, 2021 to March 31, 2022. At the time, it was understood that Maxis and CelcomDigi wanted to be allowed to roll out 5G themselves as they had for earlier generations of mobile services.

In theory, network quality and user experience on DNB’s 5G network should improve, with DNB having recently been granted an additional 100MHz of spectrum for 5G by MCMC to bring its total spectrum back to 200MHz — the amount DNB had before being instructed to cede half its 5G spectrum to U Mobile.

It remains to be seen if the country’s two largest MNOs continue to harbour a desire to gain 100MHz of 5G spectrum each — reverting to the scenario before DNB was created in March 2021 — or have tasted enough capex savings to change their perspective on DNB.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.