We have been living in the 4G world for quite some time. With this news, is about time for Malaysia to move forward and join the rest of the world in the development and deployment of 5G.
The six telecom companies, Celcom, Digi, Maxis, U Mobile, Telekom Malaysia and YTL Communications, have agreed to non-binding term sheets that might result in the group purchasing up to a 70% stake in Digital Nasional Bhd (DNB).
The nation’s 5G network would be built and run by DNB, according to the Communications and Multimedia Minister, Tan Sri Annuar Musa, who also announced that the main telecom companies have agreed to purchase shares in the business.
Everything was going “according to plan,” he said, and a formal agreement will be revealed the following week. The term sheet was agreed upon prior to the government-imposed deadline of June 30 for the completion of the equity negotiations.
Negotiations took place and an arrangement was reached. Everything will be finished by July 8 and everyone will be on board.Communications and Multimedia Minister, Tan Sri Annuar Musa
He stated that the issues of pricing and transparency of the 5G wholesale access costs, which were a source of friction among the companies, have been dealt with.
Nevertheless, someone working in the industry said:
It is only the signing of a non-binding term sheet for the proposed equity investment in DNB.
This is a routine step in the transaction process, and we will continue to discuss this and conduct our due diligence before making a decision.
At this point, it may be false to imply that DNB and the company have come to terms on taking an equity stake. Additionally, it is premature to imply and presume that it is finalised at this time, the telecom official continued.
Earlier, Annuar stated that if not enough telecoms participated in DNB, he wanted to grant licences to new companies.
Only 11.66% of DNB would be distributed among the six telcos if they all agreed to equal stake purchases.
The government declared it will pay RM 500 million for its own 30% (down from 100% earlier) stake in DNB. It is believed that the stake for each player will be close to RM200 million.
This sums up to RM 1.7 billion that might potentially be invested in DNB, which needs money to roll out the 5G network.
According to an industry executive, if the participants accept the stake, it appears that they will use DNB to fund the 5G rollout rather than individually building their own 5G networks.
He continued by saying that if the players are buying a 70 percent ownership in DNB, they ought to run and govern the company. To avoid burdening consumers, tariff costs for wholesale access prices must undoubtedly be reduced.
If you want to learn more about this whole saga, you can go here.