Malaysia to Roll Out 5G Services as Four Telecom Companies Agree to Invest in Gov't Agency

Malaysia's four most prominent telecoms businesses have agreed to purchase equity in the state-run infrastructure entity that controls the network Digital Nasional Berhad (DNB). The government-owned 5G agency released the news on Friday, Oct. 7.

The Big Four Telco Companies That Signed Up

The DNB said that four businesses - Celcom Axiata, DiGi Telecommunications, YTL Communications, and Telekom Malaysia - decided to take up a total of 65% stock in the agency.

The government retains a 35% stake in the company via the Ministry of Finance; this stake is known as a "golden share," and it is accorded preferential status in areas relating to ownership, sale, and transfer.

In preparation for a potential merger between Celcom Axiata and Digi Telecommunications, each of the company will take a 12.5% stock holding. Meanwhile, YTL Communications and Telekom Malaysia will each acquire a 20% ownership investment in DNB.

In the event that the merger was not finalized by the middle of 2023, DiGi firm confirmed that its share would grow to 17.5%, bringing it into parity with the other three operators. The proposed merger was approved by Malaysian authorities earlier this year.

According to DNB, these operators were expected to make 5G services accessible to their end consumers beginning this month and moving forward. This is despite the fact that it was still in discussions with carriers on arrangements to utilize the agency's network.

It's Finally Happening After Months of Delayed Talks

The announcement comes after months of delayed discussions between the companies and the government.

The government attempted to overcome the impasse that had developed in February on the agency's price and deployment plans for 5G by making an offer to sell 70 percent of DNB's shares to six different operators. Having said that, the first offer was only for 65%.

Two large operators, Maxis and U Mobile, had agreed to buy a portion of the company but subsequently backed out of the negotiations in August. This caused a disruption in the government's intentions to negotiate deals with the remaining carriers.

Holdups in Negotiations Left Malaysia Further Behind its Regional Rivals

The rollout of 5G services has been frequently delayed due to complaints from telecom companies and lawmakers over a lack of transparency and discriminatory pricing.

In order to have more control over the implementation of 5G, Maxis and U Mobile were even advocating for a dual wholesale network regime.

In March, the government agreed to allow private operators to own DNB so companies could protect their investments. The deal was supposed to be finalized by the end of June. Due to the lengthy negotiations, Malaysia is farther behind its regional rivals in providing the technology.

Before these delays, the government anticipated that 5G will generate RM650 billion and 750,000 new jobs by 2030.

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Written by Trisha Kae Andrada