U Mobile says no to stake in DNB, to go solo on 5G

Telecommunications company U Mobile Sdn Bhd said today it has rejected the government’s proposal to all major telcos to purchase a stake in Digital Nasional Berhad’s (DNB) for the 5G roll-out, via its share subscription agreement (SSA).

In a statement today, U Mobile said that it would be going solo in offering its 5G services and products to consumers.

“U Mobile has had extensive discussions and deliberations on the matter and after taking into consideration the terms of the investment as it currently stands, the telco has decided that it will not pursue the investment option in DNB.

“The telco believes it would better serve Malaysians by focusing on its strengths of providing innovative and unbeatable connectivity and digital services, that would realise the full potential of 5G technology. The telco’s decision not to invest in DNB does not affect its ability to provide 5G services to customers as access to DNB’s 5G network infrastructure is governed by a separate access agreement, which is not linked to the equity investment in DNB,” it said.

DNB was established in early March 2021 to accelerate the deployment of 5G infrastructure and network in Malaysia. It will offer 5G as a wholesale network service to other telcos.

Putrajaya has been in constant negotiations with telcos in the country over the rollout of 5G, with telcos constantly pushing back for more favourable terms — advocating for a dual wholesale network (DWN) model instead of the government’s single wholesale network (SWN) — which they claim would provide better optimising availability and pricing of 5G.

U Mobile said that the company and other telcos are in discussions to finalise the 5G access agreement with DNB.

“Once it is finalised and signed, DNB’s 5G access when combined with U Mobile’s existing 4G network will enable U Mobile customers to enjoy a truly seamless connectivity experience. U Mobile has full faith that DNB will be on schedule for the deployment of quality 5G network infrastructure and that it will carry out the government’s mandate to provide wholesale 5G coverage and capacity on an equitable and non-discriminatory basis via the 5G access agreement.

“U Mobile has been testing 5G services and is looking forward to our customers enjoying the full benefits of 5G with our 5G-ready products and services soon,” it added.

DNB yesterday said that the SSAs will be revised to accommodate just the four remaining major telecommunications firms, after being rejected by two mobile network operators (MNOs).

The national 5G agency said it considered the SSAs finalised and ready to be executed with the six mobile carriers yesterday, but two ultimately did not continue.

DNB said that one operator decided not to proceed while the other did not respond despite its confirmation to participate earlier.

The firm did not name the carriers, although it was earlier reported that Maxis Bhd and U Mobile had declined to take up the shareholder agreement after negotiations did not meet their requirements.

Reuters report quoting sources said that the two mobile carriers declined the offer after the government knocked back a proposal that four carriers — Maxis, U Mobile, along with Celcom Axiata Bhd and DiGi Telecommunications — take a combined majority stake in the agency.

But the government had instead asked six mobile operators in the country to agree to take up a combined 70 per cent stake in the agency, but Maxis and U Mobile reportedly declined, as they could not see the benefits of being a minority shareholder.

Maxis and U Mobile could not see benefits in being a minority shareholder in DNB, according to two of the sources, who requested anonymity as they were not authorised to talk about the private negotiations.

Despite the development, however, DNB said that discussions on the 5G access agreements were progressing with all six major mobile carriers in the country and that the rollout plan is on track.

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