Communications and Multimedia Minister Tan Sri Annuar Musa said the major telecoms players have agreed to take up stakes in DNB, the company that has been assigned the rights to build and operate the nation’s 5G network
PETALING JAYA: Six telecommunication players have signed non-binding term sheets that can see the group potentially buying up to a 70% stake in Digital Nasional Bhd (DNB).
Communications and Multimedia Minister Tan Sri Annuar Musa said the major telecoms players have agreed to take up stakes in DNB, the company that has been assigned the rights to build and operate the nation’s 5G network.
He pointed out that everything was going “according to plan’’ and an official agreement will be announced next week. The term sheet was signed ahead of the June 30 deadline set by the government for the equity negotiations to be concluded.
He said the “negotiations took place and an understanding was reached... everything will be concluded by July 8 and everybody will be on board.’’
As to matters relating to transparency and pricing of the 5G wholesale access fees which was a bone of contention among the players, he said that “have been sorted out.’’
However, an industry executive pointed out that “it is just the signing of a non-binding term sheet for the proposed equity shareholding in DNB.’’
“This is part of the standard overall transaction process, with further discussions and due diligence still ongoing before a final decision is made.
“Any implication that an agreement has been reached with DNB to take up an equity stake in the company may appear inaccurate at this stage. It is also premature to suggest and assume that it is a done deal at this point,’’ a telco official added.
Earlier, Annuar said he wanted to issue licenses to new players if the number of telcos participating in DNB was not enough.
The six are said to be Celcom Axiata Bhd, Digi.Com Bhd, Maxis Bhd
, U Mobile, collectively known as CDMU. The other two are said to be Telekom Malaysia Bhd and YTL Communications.
StarBiz contacted some of the players but none responded as at press time.
Whatever the arrangements, if all six were to agree of equal portions of a stake buy, then they will only get 11.66% each in DNB.
The government said it will fork out RM500mil for its own 30% (reduced from 100% earlier) stake in DNB. It is likely each player may have to pay close to RM200mil each for their stake.
That totals to RM1.7bil that potentially could be going into DNB, which needs funds to roll out the 5G network.
“If the players take up the stake, it would appear they will help fund the 5G rollout via DNB instead of funding their own 5G networks independently,’’ said an industry executive.
If the players are taking 70% stake in DNB, he added that “they should have control over how DNB is operated and managed. Certainly, tariff charges for wholesale access pricing needs to be lowered to not burden the consumers.’’
The whole contention over 5G rollout in the country began when the government decided to create DNB, a special purpose vehicle.
This is to roll out a 5G network in the country under the single wholesale network model (SWN), much to the chagrin of the players that wanted a natural migration of their own networks from 4G to 5G.
After much noise from the players which proposed a dual wholesale network to counter the SWN, the government decided to offer 70% stake in DNB to the players and keep 30%, while holding a golden share.
Besides that, CDMU had in April objected to some of the details spelt out in the March 31st Reference Access Offer (RAO) for 5G wholesale access with the biggest issue being exorbitant access pricing that could burden consumers, and a 10-year usage agreement.
Then CDMU said “the RAO in its current published form will not enable affordable and quality 5G services for the rakyat and businesses in Malaysia, and will impede the acceleration of 5G services and penetration in the country.’’
The grievances of the players are being addressed and according to a recent media report, the wholesale pricing will be discounted until DNB has achieved 80% nationwide coverage which is expected to happen only by 2024.
It added that a price review is expected and will be overseen by the regulator every three years.
