The future is uncertain for Digital Nasional Berhad with reports saying that local telcos are planning to ditch the government-run network in favour of building Malaysia’s second 5G network.
The Straits Times reported that focusing on the second network or Entity B would impact the financial viability of the first network and stall the progress of DNB which aims to cover 80% of populated areas in the country.
Now, telco operators are tussling for the chance to build Entity B after the government made the announcement earlier this year to break DNB’s monopoly by introducing the Dual Wholelsale Network (DWN).
Unlike what DNB is doing, reports say that MNOs instead want the second network to focus more on densely populated areas, which reduces average costs while giving control over crucial spectrum bands.
Previously, it was reported that the second provider would enter the fray after DNB reaches 80% coverage of populated areas, which is expected to happen by the end of 2023.
Anwar Hinting that they might pick Huawei but it’s not final
Reports have pointed out that Prime Minister Datuk Seri Anwar Ibrahim is keen to have Huawei on board as the second network provider, saying that it’s the best of both worlds to have Ericsson and Huawei providing 5G to the country.
Former Bangi MP, Ong Kian Ming was quoted saying that after taking office in November 2022, Anwar focused on probing Ericsson’s contract with DNB for alleged irregularities.
If there was a need for a second 5G network, according to the principles of openness and transparency espoused by Anwar… this contract should be done via open tender and not by directly negotiating with any single entity, Huawei included.
Former Trade and Industry Deputy Minister Ong Kian Ming
Meanwhile, Communications and Digital Minister Fahmi Fadzil previously said Entity B has not been created yet and mentioned that the vendor would be picked based on commercial aspects.
Telcos want to do it themselves
Sources also told Straits Times that Telcos prefer to own Entity B instead of taking a stake in DNB so that they can utilise existing assets and roll the network based on demand instead for better cash flow, and obtain spectrum bands for 5G.
Reports say that telcos are still on board with using DNB’s 5G capacity for a minimum of RM2.88 billion over a decade but these deals can be voided once a second provider comes online.
The amount paid by these telcos is reportedly being used to pay off the debt used to build DNB’s network.
Talks on the second network have also stalled equity negotiations in DNB by CelcomDigi, Maxis, uMobile, Yes and Telekom Malaysia—affecting the RM16.5 billion rollout for the 5G network.
Reports also say that the proposed share sale agreement would mean five telcos will each have a 14% share, with the rest of the shares going to the Ministry of Finance, before DNB is fully privatised when Entity B is up and running.
