Why did two Malaysian telcos reject the DNB 5G deal?

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Two Malaysian Telcos Declined DNB 5G Share Subscription Agreements Due to Minority Shareholder Concerns

Two major mobile network operators (MNOs) in Malaysia have rejected the 5G share subscription agreements (SSAs) with Digital National Berhad (DNB). Maxis Berhad and U Mobile were reportedly among those that declined to proceed with the SSAs. This decision stems from their assessment that there were no discernible benefits to becoming a minority shareholder in DNB, particularly after a proposal for a combined majority stake was rejected by the government.
Rejection Rooted in Minority Shareholder Status

Maxis and U Mobile are understood to have declined the shareholder agreement because they could not identify significant advantages in holding a minority stake in DNB. This perspective emerged after discussions regarding the equity participation in the national 5G agency did not align with their strategic interests or perceived value proposition. The SSAs were initially prepared for execution with six mobile carriers, but two ultimately chose not to move forward.
Government Rejected Proposal for Combined Majority Stake

The rejection by Maxis and U Mobile is linked to the government's decision to turn down a proposal where these four carriers—Maxis, U Mobile, Celcom Axiata Bhd, and DiGi Telecommunications—would have jointly held a majority stake in DNB. Instead, the government had initially requested that six mobile operators collectively acquire a 70 per cent stake in the agency. The rejection of the majority stake proposal by the government likely contributed to the unwillingness of Maxis and U Mobile to accept a minority position.
DNB to Revise SSAs for Four Carriers

Following the withdrawal of two operators, DNB has indicated that the 5G SSAs will be revised to accommodate the remaining four major telecommunications firms. DNB stated that the transaction documents, including the SSAs and Shareholder Agreement, require adjustments to reflect equity subscriptions by four MNOs instead of six. This necessitates further internal approvals from the interested parties before the process can be finalised.
5G Rollout Progresses Despite Shareholder Changes

Despite the changes in equity participation, DNB affirmed that discussions concerning 5G access agreements are progressing with all six major mobile carriers. The agency also reiterated its commitment to the accelerated deployment of the 5G network and infrastructure. Currently, 5G coverage has reached approximately 30 per cent of populated areas, and DNB remains on track to achieve its target of 80 per cent coverage by 2024.

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Why did two Malaysian telcos reject the DNB 5G deal?

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