• Smaller Small Medium Big Bigger
  • Default Helvetica Segoe Georgia Times

Malaysia's wholesale 5G operator, Digital Nasional Berhad (DNB), has refuted claims made in a news report on Friday that negotiations with mobile operators to acquire equity stakes in DNB have collapsed, citing an alleged lack of internal transparency as a contributing factor.

In December 2023, Telekom Malaysia, Maxis, U Mobile, YTL, and CelcomDigi (via Infranation) signed shared subscription agreements (SSAs) to collectively acquire a 70% stake in DNB. Each company obtained a 14% stake, while the Minister of Finance (MOF) retained the remaining 30%, along with a "special share."

Initially, the SSAs were expected to be finalized between February and April 2024. However, a report from Channel News Asia, citing anonymous sources, stated that negotiations regarding the specifics of the SSAs have hit a roadblock due to disagreements on "condition precedents" that need to be resolved before the contracts can be enforced.

The report highlighted several concerns, including the selection of directors to represent DNB’s telecommunications companies and the completion of three independent confidential audits on DNB. Further complicating matters was the government's plan to introduce a second 5G wholesale network later in the year, given that DNB has already achieved coverage of over 80% of populated areas in Malaysia. According to the SSAs, each telecom company had the option to withdraw from DNB in order to invest in the new 5G operator.

The report stated that the due diligence reviews (which are essential for telecom companies to determine whether to stay with DNB or switch to the second 5G operator) were initially expected to be completed in January but are still in progress. Anonymous executives from Telekom Malaysia and Maxis, as quoted in the report, expressed skepticism regarding the wisdom and economic viability of investing in a second operator in the short term.

Furthermore, recent data from Malaysia's Ministry of Communications has indicated that approximately 10 million people subscribed to 5G by the end of January 2024, equating to an adoption rate of nearly 30%. DNB released a statement on Friday dismissing the misleading report and confirming that the process of finalizing the SSAs is still in progress.

The statement rejected assertions made in the CNA report regarding a purported lack of transparency within DNB and dismissed allegations of distrust between DNB and certain telecom companies regarding its internal operations, particularly concerning contracts awarded to Ericsson and third-party software providers. DNB clarified that the tender process for 5G network equipment, ultimately won by Ericsson, was overseen by an independent global professional services firm involving experts from 10 countries with 5G network experience. The process was reviewed by various parties, including the Malaysian Cabinet in 2022 and 2023.

On Friday evening, a report from the government news agency, BERNAMA, emphasized Maxis' official reaffirmation of support for the establishment of a second 5G network in Malaysia. Subsequently, on Sunday, a report quoted Prime Minister, Datuk Seri Anwar Ibrahim, announcing a meeting to address concerns regarding DNB's purported lack of transparency in its internal operations, scheduled for the following week.

Pin It