Telecom

Two Malaysian Mobile Firms Reject Stakes in 5G State Agency

Malaysia last year scrapped a plan to apportion spectrum to service providers, opting instead for a single shared network to reduce costs, improve efficiency and speed up infrastructure construction, but most major carriers are reluctant to join a state-run 5G agency, sources say. Photo: Reuters.

Two of Malaysia’s largest mobile firms, Maxis Bhd and U Mobile, will not take a stake in a government-owned 5G agency, Digital Nasional Berhad (DNB), three close sources requesting anonymity have said.

The two carrier companies have also complicated the agency’s attempts to attract other carriers, the sources said, putting the country’s 5G rollout under increased strain and delay.

“(The parties) will have to try and restructure the deal,” one person said.

The government had wanted six of the country’s mobile operators to agree on taking a combined 70% stake in the DNB. Wednesday had been the deadline for an agreement after months of talks.

A counter-proposal by Maxis, U Mobile and two other major carriers, Celcom Axiata and DiGi Telecommunications, for the four of them to take a combined majority stake was knocked back by the government.

Maxis and U Mobile could not see benefits in being a minority shareholder in DNB, two of the sources said, but noted that the firms have told the government they want to remain in talks for access to DNB’s 5G network.

Maxis, DNB and Malaysia’s finance and communication ministries did not immediately respond to requests for comment. Celcom, Digi and U Mobile declined to comment.

False Start

Malaysia’s 5G plans have been plagued by delays.

Two smaller carriers began trial 5G operations in December 2021, but the four main carriers refused to get on board, saying the government’s plans for DNB to control all 5G spectrum would undermine competition and raise concerns over pricing and transparency.

They then asked the government to allow a second 5G service to be set up.

The government rejected that proposal but said it would offer the carriers stakes in DNB to alleviate their concerns. It argues that its plan will reduce costs, improve efficiency and accelerate the building of infrastructure.

DNB has said the country’s communications regulator will adopt stringent public guidelines to ensure fair pricing and a smooth rollout.

Reuters, with additional editing from Alfie Habershon

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Alfie Habershon

Alfie is a Reporter at Asia Financial. He previously lived in Mumbai reporting on India's economy and healthcare for data journalism initiative IndiaSpend, as well as having worked for London based Tortoise Media.