All six of Malaysia’s main mobile network operators have now reportedly agreed to take up equity in a state-controlled 5G wholesale provider, Digital Nasional Berhad (DNB).
However, a government statement has suggested that finalising terms on network quality, dispute resolution and cost still need to be worked out; the target is the end of the month. Thus, there may still be room for further delay after the many years in which Malaysia has fallen behind other countries in the region in bringing 5G to market.
The Malaysian operators had earlier held off until government proposed that the operators take a combined 70% stake in DNB – none of them with a stake bigger than 20% or 25% if two merged companies were involved. The government will hold the remaining 30% stake. The deal to take up a stake in DNB also requires shareholders to buy 5G capacity from DNB.
Even after the stake proposal there was operator resistance, According to some news reports, the stalemate may have ended when government warned that foreign players might wish to take part.
Most operators have not been too happy with the DNB concept. Some even suggested two 5G wholesale networks would be better. According to The Straits Times non-binding term sheets were signed at the end of June. Celcom, DiGi, YTL, and Telekom Malaysia came on board, but Maxis and U Mobile – which together hold more than 40 per cent of the market share – were the final holdouts. The key terms were apparently only finalised on 8 August.
The government has high hopes for 5G in terms of job creation and economic value. However, lack of competition and a difficult economic situation worldwide, among other challenges, may yet prove stumbling blocks to the success of DNB.
