SOURCES SUGGEST MAXIS AND U MOBILE WILL NOT BE TAKING STAKES IN THE GOVERNMENT’S NATIONAL 5G AGENCY, HAVING ARGUED AGAINST THE VALUE IN BECOMING MINORITY STAKEHOLDERS
Malaysia’s relatively unique approach to 5G continues to prove disastrous, with sources this week suggesting that two of the nation’s telcos will not buy a stake in Digital Nasional Berhad (DNB) after all.
The government set up DNB early in 2021, aiming to create a single national 5G operator from which the country’s other 5G operators could rent 5G services. At the time, the government said this would be more efficient and cost-effective than the operators rolling out the infrastructure themselves, noting that the plan eliminated potential overbuild.
The operators, however, said that this plan would be more expensive for them than deploying 5G themselves, with many refusing to engage with DNB at all.
Over the past year, the government has taken various measures to make partnering with DNB more attractive, ultimately settling on a plan that would see 70% of DNB’s ownership handed over to the country’s six mobile operators in individual minority stakes.
By August 2022, the government finally seemed hopeful that the nation’s operators were ready to buy-in, literally, to the government’s 5G vision, with Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz telling the media that the last holdouts –Maxis and U Mobile – had confirmed they would take a stake in DNB.
The two operators, alongside rivals Celcom Axiata and DiGi Telecommunications, had previously argued that they should allowed to own a combined majority stake, though this plan was rejected by the government.
Instead, the Malaysian state began floating the idea that foreign companies could take the place of domestic operators in owning a piece of DNB if necessary, with Tengku Zafrul noting interest had been received from companies in India, Hong Kong, and Singapore.
“There are many who have registered strong interest […] because to them there is no more capex. And then they say we have got the technology and we know how to play the game,” he explained.
Now, however, it seems that discussions have fallen at the last hurdle, with sources suggesting that Maxis and U Mobile are refusing a stake in DNB. According to reports, the two operators still believe there is little value in taking a majority stake in the business but wanted to continue talks about gaining access to DNB’s network.
Without the participation of Maxis and U Mobile, the stake sale process itself is potentially scuppered, with sources suggesting that “(the parties) will have to try and restructure the deal”.
It is possible that the four participating operators will simply have their potential stakes increased to absorb the missing stakes of Maxis and U Mobile, though even this simple solution will require new approvals and will thus delay the country’s 5G rollout yet further.
Malaysia is one of the last countries in Southeast Asia to launch commercial 5G services, with many of its neighbours having been enjoying such technology for over a year now.