CelcomDigi Wants to Lead Second 5G Network after Taking Up Stake in DNB

CelcomDigi Bhd (KL:CDB), which has just completed its share subscription of a 16.3% stake in Digital Nasional Bhd, believes it is in a strong position to lead the development of the second 5G network for Malaysia.

“We are eager to move into the next phase of transitioning to the 5G dual network model and participating in the upcoming process to build the second 5G network. We welcome a solution that benefits Malaysian consumers and the industry through a fair and transparent selection and transition mechanism that will promote healthy and equitable competition between the two 5G networks, and advance the technological and economic development of the country.

"We have a proven track record and substantial experience in deploying mobile networks over the last 30 years," said CelcomDigi chief executive officer Datuk Idham Nawawi in a statement on Friday.

That, combined with the RM4 billion capital expenditure that it said it has invested to build Malaysia's leading digital network, puts it in a strong position to lead the second 5G network's development, Idham said.

The group had, on Friday, completed the share subscription agreement (SSA) it inked with the Minister of Finance (Inc) and DNB to take up the 16.3% equity stake. YTL Power International Bhd (KL:YTLPOWR), Maxis Bhd (KL:MAXIS) and U Mobile Sdn Bhd also announced that they had completed their respective share subscription agreements on the same day.

DNB, in a separate statement, said the four telcos or mobile network operators (MNOs) have collectively acquired a 65.1% stake in DNB, with each holding 16.3% each. The four telcos have increased their equity stake in DNB following the satisfaction of their respective SSAs.

"The Malaysian government, represented by MOF Inc, retains approximately 34.9% stake and a special share in DNB for a designated period.... For Telekom Malaysia Bhd (KL:TM), the conditions precedent longstop date is Aug 21, 2024. Assuming TM successfully completes the SSA, MOF Inc's stake will reduce to 30%, with the MNOs collectively holding a 70% stake in DNB," it said. 

Telcos who take up stake in DNB have the option to exit DNB later by selling their stake to those who choose to remain in DNB. Those who leave may then form an entity to provide the second 5G network, or choose not to participate in the second 5G network provider at all. 

This option is provided in the shareholders’ agreement that Maxis — together with YTL, CelcomDigi (via Infranation Sdn Bhd) and U Mobile — inked with DNB and MOF Inc, also on Friday, and can be exercised during an equity resructuring that will take place after the put and call option for MOF Inc to sell its stake in DNB to the telcos.

In CelcomDigi's statement, the telco also pointed to its "strong track record of building networks in Malaysia over the last three decades" and how it "operates the widest 4G network in the country, which covers 97% of populated areas nationwide".

It now aims to build Malaysia’s leading digital network with an end state of 18,000 5G-ready sites to deliver seamless 5G and 4G experience to all Malaysians.

"The modernised network, which will enable fast deployment of 5G and 5G-advanced technology across its footprint, is ready to be commissioned as one of the largest standalone 5G networks in the region geared towards driving increased 5G adoption to realise Malaysia’s digital society aspirations.

"CelcomDigi is committed towards the government’s 5G dual network model and is ready to lead the development of Malaysia’s second 5G network," its statement read.