5G Malaysia: Fahmi says all 5 telcos will all join DNB, to end shareholding soon – SoyaCincau

Communications and Digital Minister Fahmi Fadzil announced that the 5G Task Force successfully reached an agreement regarding the 5G access agreement and equity participation for Digital Nasional Berhad (DNB). Besides getting all five telcos in DNB for 5G access, he said all telcos will take an equity stake in the 5G single wholesale network.

According to the statement, the five operators – CelcomDigi, Maxis, Telekom Malaysia, U Mobile and YTL Communications, are in the process of finalizing their shareholding in DNB. In addition, they will support DNB’s 5G development until it achieves 80% 5G population coverage by the end of 2023 before moving to a Dual Network approach in January 2024.

According to Fahmi, DNB’s 5G network achieved 64.7% 5G population coverage by the end of June 2023 and is on track to achieve its 80% target by the end of this year. He also shared that Maxis customers will soon be able to enjoy 5G as they are seeking the approval of their shareholders to sign the 5G access agreement with DNB during the EGM to be held next month.

So what happens to the Dual Network strategy?

Malaysia's 5G Dual Network Model

In retrospect, the government announced a policy change to transition from a 5G Single Wholesale Network to a Dual Network approach in May this year. Besides the goal of dismantling the 5G monopoly, the decision was made to avoid a single point of failure and establish redundancy for 5G.

Shortly thereafter, CelcomDigi and TM announced the termination of the Share Subscription Agreement with DNB. According to CelcomDigi, the termination of the equity deal will pave the way for CelcomDigi to participate in any new process including equity participation with the industry. Last year, four telcos – Celcom, Digi, TM and YTL Communications, signed a conditional share subscription agreement with DNB with a collective 65% equity stake in the state-owned network, while the government retained its 35% stake.

In the latest announcement, this means that all telcos will have a stake as well as maintain a 10-year 5G access agreement with DNB, before a second network is allowed next year. There is still no clarity on the development of the second 5G network (Entity B) and what the next steps will be once all telcos are on board with DNB (Entity A).

Today, DNB is still a 100% government-owned network with RM500 startup capital from the Ministry of Finance. During its development, the single wholesale network was designed to operate on a cost-recovery model funded by wholesale commitments from telcos. As highlighted by Malaysian Communications and Multimedia Commission (MCMC) COO Dato Mohd Ali Hanafiah Mohd Yunus, the government will divest its stake in DNB, turning it into a fully private entity once the 80% 5G population target is reached.

Who will build Malaysia’s second 5G network?

With a locked 10-year access agreement with DNB, what is the motivation or incentive to encourage a second competing network? Will telcos be able to justify additional investments to build a second network in Malaysia if they are already fully committed to DNB in ​​both shareholding and access agreements? Or is the government looking at new players including foreign entities to build a 5G secondary network in Malaysia?

Currently, DNB is still the 5G monopoly as the government has not revoked former Communications and Multimedia Minister Saifuddin Abdullah’s order to award the 700MHz and 3500MHz spectrum exclusively to DNB. At the same time, MCMC has yet to restore the spectrum neutrality technology that prevented all telcos from offering anything beyond 4G using their existing spectrum. According to MCMC, the two will quickly reverse once Malaysia achieves 80% 5G population coverage. Does Malaysia really need to wait until 80% for the second network to be enabled and what will happen if we don’t reach it by the end of this year?

#Malaysia #Fahmi #telcos #join #DNB #shareholding #SoyaCincau

Leave a Comment