DNB disputes Reuters report, says yet to start 5G talks with telcos

An interview session with Digital Nasional Berhad is seen in Damansara Heights, Kuala Lumpur, November 5, 2021. — Picture by Shafwan Zaidon
An interview session with Digital Nasional Berhad is seen in Damansara Heights, Kuala Lumpur, November 5, 2021. — Picture by Shafwan Zaidon

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KUALA LUMPUR, Nov 11 — Digital Nasional Berhad (DNB) said it has not begun formal negotiations with local telecommunications firms for access to Malaysia’s 5G network as the applicable reference access offer (RAO) was not finalised.

In a statement today, DNB described as inaccurate a Reuters news report yesterday alleging that no major telco has subscribed to access Malaysia’s 5G network operated by the state-owned firm.

“The RAO will form the basis for DNB to enter into commercial agreements with licensees who are access seekers once these feedbacks have been received and evaluated. DNB anticipates finalizing its RAO by end-November upon MCMC’s approval.

“Subsequently, DNB will begin commercial negotiations with the telcos. Hence, we will only be able to sign up the telcos AFTER the publication of the RAO. It is thus clear that DNB has not sought any sign-up and neither expects the MNOs to sign anything until after the RAO is published,” DNB said in a statement today.

DNB also rejected the portion of the Reuters report that alleged 5G data costs to the telcos would be high.

DNB said it believed the cost per GB communicated to the telcos were significantly lower than if the firms each needed to maintain their own 5G network.

“The logic for lower costs with a single shared infrastructure is simple. Everywhere in the world, highways are built and shared for drivers of all makes of cars. Imagine the costs if each make of car were to build their own highways for exclusive use,” they said.

DNB also denied that the telcos would become less profitable as a result of the network leasing arrangement and this could potentially cost the local stock market up to RM45 billion in lost capitalisation.

The company said despite the claim, the stock prices of “all listed telcos” have outperformed the larger FTSE Bursa Malaysia KLCI since the government announced the formation of DNB and the mandate to roll put 5G on February 18.

“Clearly, investors do not believe the telcos will face value destruction.

“In fact, there is every reason that the lower cost of 5G services from DNB should lead to higher net earnings and therefore, logically, translate into a higher stock price of these telcos,” they said.

Yesterday, Reuters published a report claiming that none of Malaysia’s major mobile carriers have agreed to use the government’s 5G network yet due to transparency and pricing issues, ahead of a rollout planned for next month quoting a state agency and industry executives.

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