Following failures by Digital Nasional Berhad (DNB) to sign a commercial 5G deal with major Mobile Network Operators (MNOs) in Malaysia, it’s been reported that the MNOs have now rejected the proposal by the Malaysian Government for a 70% ownership in DNB.
In an exclusive report, Reuters said that Maxis, Celcom, Digi and U Mobile are countering a proposal by the Government to offer them minority ownership, according to a letter sent by the firms to the Finance Ministry (MOF).
It is believed 9 firms were invited to participate for a 70% ownership in DNB, leaving the four big MNO with only a combined minority stake.
The report also said that the MNOs want a review of the pricing model and network access plan offered by DNB, according to the May 9 letter seen by Reuters.
Despite Industry concerns, the Malaysian Government said in March 2022 that it has decided to retain Digital Nasional Berhad (DNB) as the sole 5G wholesale network provider in the country, following discussion with stakeholders. A 70% ownership in DNB will be offered to MNOs, to be competed by end of June 2022, however no details were revealed about the proposed stake until today.
“We would not be able to justify a passive minority investment in this venture without being able to exercise influence and control to safeguard our investment,” the letter said, according to Reuters.
The firms said they were still willing to explore the government’s proposal, but a stake of at least 51% would be the “most viable to reach an agreement”.
“The MoF-proposed role as minority shareholders does not appear to make it feasible for any of us to add value as shareholders and is not commensurate to our contribution to the industry, or our duty to our shareholders and customers,” the letter said.
To date, only two smaller mobile operators – Telekom Malaysia (unifi) and YTL Communications (Yes) – have signed up to for the free 5G trial until June 2022. Only YTL has offered the 5G service to consumers, starting from RM25/month.
In March 2022, DNB said it welcomes the decision by the Government of Malaysia to retain the 5G Single Wholesale Network (SWN) model for national 5G deployment, with an offer for telecommunications companies (Telcos) to subscribe for equity stakes in DNB.
“We look forward to engaging with the Telcos to discuss and agree all aspects related to the proposed equity participation in DNB.”
“DNB will work with our stakeholders and the Telcos to deliver fair, equal and affordable access to high quality 5G services for the benefit of the Rakyat, with an objective to achieve 80% coverage of populated areas by 2024,” it added.
However DNB still failed to reached an agreement with the major MNOs following months of discussion.
Last month, the MNOs are of the view that a majority of concerns and issues previously raised and discussed with Malaysian Communications and Multimedia Commission (MCMC) and DNB have not yet been adequately addressed, including key principles proposed for the 5G Reference Access Offer (RAO) to be consistent with industry best practices.
The Reference Access Offer (RAO) is a document published last month by DNB, setting out pricing, service commitments and other details of the 5G wholesale model. The document was approved by communications regulator, MCMC.
“As a result, 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 MNOs said.
DNB did not respond to these comments by the MNOs.