THE development of Malaysia’s 5G network has hit a new snag as a government-brokered deal between state-owned 5G operator Digital Nasional Bhd (DNB) and private telecommunications companies has fallen apart, Channel NewsAsia reports.

This has cast serious doubt over the future of the country’s 5G ambitions. 

Disagreements over key conditions persist and are stalling progress, the report said.

“Government officials and industry executives have acknowledged that after more than four months, both sides have yet to agree on so-called condition precedents (CPs), legal parlance for events that must take place before a contract can come into effect,” it said.

The CPs include the appointment of directors who would represent the private telcos in DNB and the completion of three confidential audits on the state-owned entity by external experts.

“The audits are ongoing, but there is no agreement on the composition of the board. Nothing is moving because telcos are starting to have doubts on the path forward,” a senior Finance Ministry official was quoted as saying.

Under the government-backed 5G initiative, DNB has rolled out more than 80% of the network to date.

Communications Minister Fahmi Fadzil had said that almost 10 million people were subscribed to the 5G service as of end-January, marking an adoption rate of just under 30%.

Another source had told CNA there exists a deep mistrust between industry and government, especially over the secrecy shrouding the internal operations of DNB.

“Our issue with DNB has always been about transparency and that remains a hurdle,” a chief executive of a financial consulting agency was quoted as saying.

The report stated there were also deepening financial concerns at DNB.

DNB has borrowed RM2 billion from the banks  to fund the rollout of 5G infrastructure. But the government guarantee for the company expires in December, according to DNB officials.

DNB is pressuring the Anwar Ibrahim administration to break out of its policy inertia over the 5G rollout plan because the company could face a cash crunch in the coming months without a fresh injection of funds from the government, the report said.  – April 19, 2024.