Sunday, June 4, 2023

Digital Nasional Berhad (DNB) likely to be Disbanded – Analyst

Following the announcement by Government for the deployment of a second 5G network in Malaysia, one market research firm believes privately driven 5G networks will see spectrum reallocated to mobile network operators (MNOs).


In a market research report published today, RHB Investment Bank said in a note that, under Phase 2, the Government intends for a new entity to roll out the second 5G network (Entity B) with Entity A taking over the 5G network rollout from DNB.

“The latter scenario suggests that the company (DNB) will be disbanded after it reaches its coverage milestone with MNOs taking over thereafter – likely via the sale of DNB by the Finance Ministry, which results in the 5G rollout and control/ownership going back to the MNOs,” reported TheEdgeMarkets.

RHB Investment Bank said it estimates the overall 5G spectrum outlay at more than RM6 billion as it expects the 5G spectrum – 700MHz, 3500MHz, and mmWave bands – being re-allocated to the four big Mobile Network Operators (MNOs). This translates into some RM1.6 billion per operator, with the upfront fee projected at RM695 million and the annual fee at RM59 million.


On Wednesday, the Malaysia Government announced that Digital Nasional Berhad (DNB) will continue to deploy its 5G network until it reaches 80% coverage in populated areas by the end of 2023.

DNB has deployed its 5G networks using the 700MHz, 3500MHz bands. It also has access to the 26Ghz mmWave band. It is believed that the 5G population coverage had reached 57.8% with another 22% (about 2,000 additional sites) to be deployed by year-end.

Another mmWave band for 5G, the 28Ghz, is still being reserved by the Government.

A transition to a dual 5G network model will be implemented starting January 2024. For phase 2, it referred to the current Digital Nasional Berhad (DNB) 5G network as Entity A and the upcoming new 5G network in 2024 as Entity B.


The participation of Telecommunications service providers in Entity A and Entity B will be decided later, it said in a statement.

The Government added that “Entity A” will continue to operate the 5G network built by Digital Nasional Berhad (DNB) and Ericsson.

In support of the Government’s decision, CelcomDigi announced yesterday that both Digi Telecommunications Sdn Bhd (“Digitel”) and Celcom Mobile Sdn Bhd, (“Celcom Mobile”) have terminated previous respective Share Subscription Agreements (“SSA”) signed in November 2022 with DNB, effective 3 May 2023.

“As per the Government’s announcement, the earlier process to subscribe to Equity in DNB through the respective SSA is rendered void. The termination of the respective SSA will clear the path for CelcomDigi to participate in any new process, including Equity participation, together with the industry,” CelcomDigi said in a statement.

“This does not have any impact to our 5G services. CelcomDigi customers currently on 5G connections may continue to enjoy the service, according to ongoing product offers,” it added.

For the moment, CelcomDigi customers on selected plans could enjoy free access to the DNB network until the end of May 2023.

Prior to this announcement, CelcomDigi had a combined stake of 25%, the second largest shareholder in DNB, followed by YTL Communications (20%), and TM (20%). The Ministry of Finance (MoF) holds the remaining 35% as well as a Golden Share. The golden share grants MoF various rights and privileges and covers areas such as ownership, sale, or transfer of shares on the part of the Government.

With CelcomDigi pulling out, the remaining shareholders of DNB are now YTL, TM and MoF.

Other 5G service providers, U Mobile and Telekom Malaysia both supported the Government’s decision to shift to dual 5G networks.

“Once the dual 5G networks is in place, U Mobile will ensure interoperability between the two networks. We also envision that we will be able to aggressively innovate in order to bring the full benefits of 5G to all our consumers. We are also looking forward to working with various industries to innovate services that improve efficiencies using 5G technology,” U Mobile said in a statement.

Telekom Malaysia in a statement said, “TM will work closely with the Government and the industry to ensure the success of both Phase 1 (80% service coverage by DNB) and Phase 2 (shift to two networks) for Malaysia’s 5G implementation. TM looks forward to continue playing an active role in the 5G implementation, leveraging its nationwide fibre infrastructure, extensive digital platforms (data centres, edge nodes) and rollout experience,”

Meanwhile, Maxis did not provide any actual date for its 11.88 million mobile subscribers to enjoy 5G. It is the only major mobile network operator that has failed to launch a 5G service in the past year.

[PDF] – Dual wholesale network (DWN) 5G model announcement by KKD

Kugan is the co-founder of MalaysianWireless. He has been observing the mobile industry since 2003. Connect with him on Twitter: @scamboy

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