DIGITAL Nasional Bhd (DNB) has confirmed the withdrawal of two mobile network operators (MNOs) from taking a stake in 5G network services.

In a statement, DNB said it will sign with the remaining for telecommunication companies, and then discuss access with the two companies that have pulled out.

The national 5G agency said although the Share Subscription Agreement (SSAs) were finalised and ready to be executed by the six MNOs yesterday, there was a last-minute change in the decision by two MNOs, with one deciding not to proceed, while the other had not responded, despite their confirmations to participate earlier. 

“Accordingly, revisions to the transaction documents (SSAs and shareholder agreement) need to be made to allow for the equity subscription by four MNOs (instead of six), which consequently require further internal approvals from the four MNOs,” it said in the statement. 

Although DNB did not name the two MNOs, a Reuters report quoting sources had stated that Maxis and U Mobile do not plan to sign on for a stake in the project as they do not see the benefit of being a minority shareholder.

However, both companies will remain in talks with DNB to access the 5G network, the sources said.

DNB said four MNOs remain interested, and it is envisaged that the equity participation process will progress to completion with the MNOs concerned. 

“The discussions on the 5G Access Agreements are progressing with all six MNOs and under a separate and independent track,” it said in the statement.

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

Previously, a proposal by Maxis, U Mobile, Celcom Axiata and DiGi Telecommunications for the four companies to take a combined majority was rejected by the government. 

Earlier today, Malaysian Communications and Multimedia Commission chief operating officer Mohd Ali Hanafiah Mohd Yunus said telco companies have started on the 5G technical test. 

He said the tests comprised five phases in total and they are currently at phase 4, while phase 5 includes aspects of determining the package. 

On July 1, Communications and Multimedia Minister Annuar Musa was reported to have said that users could expect 5G network services in stages by September at the latest, with six companies having signed agreements to take up equities in DNB.

For now, only YTL Communications, through Yes, is providing 5G services to users in Malaysia. 

DNB, which is the government’s special purpose company for the rollout of 5G, had previously announced the availability of the network in certain areas in Putrajaya, Cyberjaya and Kuala Lumpur. – August 31, 2022.