Malaysian carriers finally agree to take stake in wholesale 5G network

The Malaysian government has set an August deadline for operators to accept stake in DNB or risk losing access to 5G spectrum

Malaysia’s transition to 5G has been plagued by a significant bottleneck resulting from the government’s decision to forego a spectrum auction and instead launch a state-controlled domestic 5G wholesaler, Digital National Berhad (DNB). While the country’s largest carriers – Celcom, Digi, Maxis, U Mobile, Telekom Malaysia and Time dotcom – have been less than supportive of this approach, all six have now, and finally, agreed to take stakes in DNB.

Beyond complaints about DBN’s high prices and lack of transparency, Malaysian carriers felt they were better able to roll out 5G on their own. Because they still refused to get involved with the wholesaler at the start of 2022, the government proposed that the operators take a combined 70% stake in DNB. Initially, the operators liked this idea, but from the government’s point of view, they were still too slow to pull the trigger.

In order to obtain a decision, the government has set a deadline of August 2022 to accept the stake in DNB. If they did not, the government said, they would lose access to 5G spectrum entirely and foreign players would be invited into the market.

This approach apparently worked. Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz told Malaysian media: “All key terms were finalized last Monday. [August 8]. One or two came at the very last minute and only because they realized that if I don’t come, my competition is there. He added that operators in India, Hong Kong and Singapore were interested.

The terms state that no operator can hold a stake greater than 20%, while in the event of a merger between two companies, the stake cannot exceed 25%. The government will hold the remaining 30%.

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