Telekom Malaysia fails to get additional time to approve share subscription agreement with DNB
Malaysian telecommunications company Telekom Malaysia (TM) has confirmed that it has received a termination notice from state-run 5G network Digital Nasional Berhad (DNB) regarding its share underwriting agreement (SSA).
The deal, which was signed on Dec 1, 2023, was conditional on Telekom Malaysia obtaining shareholder approval through an extraordinary general meeting. However, Telekom failed to obtain this approval by the original deadline of Aug 21, 2024, and the deal was terminated.
In a statement, the company said it was unable to secure additional time to obtain shareholder approval for the SSA.
“This turn of events does not impact 5G services to TM’s current customers as the 5G wholesale service agreement from DNB continues. The company is committed to providing high quality integrated digital services to various customer segments. TM will continue to play a key role in supporting the country’s 5G ecosystem and the transition to 5G dual network,” the telco said.
Following this development, local telcos CelcomDigi, Maxis, YTL and U Mobile now each hold 16.3% shares in DNB.
Four Malaysian telecommunications companies have submitted bids to build the country’s second 5G network, with the Malaysian government expected to select the winner by the end of the year, according to recent reports.
Based on a ministerial decree issued on June 21, 2024, the winner of the second 5G network tender will receive two 20 MHz blocks in the 700 MHz band and one 100 MHz block in the 3.5 GHz spectrum band.
The operator selected by the government to build the second network will be the winner of the bid, who will then sell their stake to DNB. At the same time, the other operators will remain with DNB and continue to operate and expand their 5G networks. All mobile operators in Malaysia are currently providing 5G services through DNB’s 5G network.
Malaysian authorities had announced in May 2023 that the country would move to a dual 5G network once DNB achieved 80% coverage in densely populated areas, which happened in December 2023.
As of the end of April, DNB’s 5G network had reached 81.5% of the total population area, with a deployment rate of 39.2%. As of the end of April, the number of 5G subscribers nationwide reached a total of 13.2 million.
DNB was established in 2021 by the Malaysian government as a special purpose vehicle to develop the country’s 5G network infrastructure. Currently, private telecommunications companies are using this infrastructure to provide 5G services to their customers. DNB’s 5G network was deployed by Ericsson.
