KUALA LUMPUR, Sept 2 — Finance Minister Tengku Datuk Seri Zafrul Tengku Aziz, in an exclusive interview with Bernama, shares the latest developments in the share subscription agreement (SSA) of Digital Nasional Bhd (DNB) and the government’s strategic plans for it.
Can the Ministry of Finance (MOF) comment on the two mobile network operators (MNO) which have officially announced that they would not subscribe to DNB shares?
The government takes notice of the decision by the two MNOs. What is important is that four MNOs, namely Celcom Axiata Bhd, Digi.com Bhd, YTL Communications Sdn Bhd (YES), and Telekom Malaysia Bhd (TM), have maintained their decision to subscribe to the shares.
Joint ownership of equity in DNB also means the MNOs which are involved can develop the 5G network together through the Single Wholesale Network without high capital and at the same time enable them to focus on upgrading the existing 4G service to the people. Overall, this will ensure an inclusive 5G service that can be enjoyed by all in Keluarga Malaysia.
Will the 70 per cent be divided among the remaining MNOs?
The government still holds to the principle that the 5G network needs to be jointly developed with local MNOs and maintains its decision to not be the majority shareholder in DNB. This is in line with the request from domestic MNOs that they hold equity interest in DNB.
The government welcomes the decision by the four MNOs which are still committed to develop the 5G network with DNB. As for the 70 per cent equity in DNB, we are considering whether it will be divided among the four MNOs, or for the remaining shares to be held by the government, but not at the level of a majority shareholding in DNB.
The option to offer equity holdings to foreign MNOs remains as they have expressed their interest to contribute to developing the domestic 5G network. Government policy is that domestic MNOs will get priority, however, if there is a balance of outstanding shares to be subscribed, the government will not reject the possibility of offering DNB shares to foreign MNOs.
What is the impact of having only four, instead of six MNOs subscribe to DNB shares, in terms of financials and implementation? What is the new date for the SSA?
From the discussion process, I understand that all questions and issues raised had been explained and resolved. The lead arranger in this matter had held discussions with each MNO separately, as well as with all MNOs simultaneously to resolve whatever prevailing issues. However, I was told that two MNOs made a withdrawal at the last moment.
Surely, that decision has its impact in terms of slowing down the timeline of the implementation of 5G for the people as well as for business, but we have to accept the reality that Malaysia’s implementation of 5G applications has been delayed compared to our regional neighbours.
In the latest development, two of the four MNOs which have committed to subscribe to DNB shares had to discuss again with top-level management and their respective boards the possibility of subscribing to different equity holdings. We hope the decision can be finalised by September so that we can offer the 5G service as soon as possible for the benefit of Keluarga Malaysia.
From the financial aspect, there is no major impact on the government because we understand that both local and foreign banks will provide financing for the implementation of 5G in Malaysia. This also reflects the confidence of the private sector in the 5G project.
What is the subsequent plan/strategy for DNB to ensure that the SSA proceeds smoothly?
What is most important is the implementation of 5G for the benefit of the people and business.
In the negotiation period to finalise the SSA, I understand that DNB also held negotiations on the 5G access agreement. For the MNOs that did not subscribe to DNB shares, they can still offer 5G access via the 5G access agreement.
The development of 5G infrastructure in Malaysia is very important for the country to build a digital economy, which has the potential to reap multiplier effects, such as the expansion of the cumulative GDP to RM650 billion for the period from 2022-2030, as well as the generation of 750,000 skilled jobs and high income.
It will also benefit nine industries and sectors, and spur the development of 15 smart cities.
The MOF, via a stake in DNB, will ensure that the 5G network and infrastructure are developed as soon as possible and that DNB remains on track to achieve 80 per cent 5G coverage in populated areas by 2024. — Bernama
