Why has the agreement between telcos and DNB for the 5G network stalled?

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The Agreement Between Telcos and DNB for Malaysia's 5G Network Has Stalled Due to Unresolved Condition Precedents

The agreement between Malaysia's telcos and Digital Nasional Bhd (DNB) for the 5G network rollout has stalled primarily because both parties have yet to agree on crucial condition precedents (CPs). These CPs are essential events that must occur before the contract can be finalized, and their absence has impeded the finalisation of the Share Subscription Agreements (SSAs) where telcos are set to take up a collective 70% stake in DNB.
Unresolved Condition Precedents Hinder Agreement Finalisation

The core of the impasse lies in the disagreement over specific condition precedents that must be met before the Share Subscription Agreements (SSAs) can be fully enacted. Among these outstanding points are the appointment of directors to represent the telcos on DNB's board and the successful completion of three confidential audits focused on the state-owned 5G network. These elements are critical for the telcos to proceed with their investment and assume their stake in DNB.
Telcos Have Made Initial Investment Pending Final Approvals

Following the signing of the SSAs, each of the five major Mobile Network Operators (MNOs) has already injected RM233 million into DNB. This initial financial commitment was made with the understanding that the deal was pending further due diligence and the necessary approvals from various authorities, financiers, and specific vendors. The ongoing failure to agree on the CPs has kept the overall transaction in a state of suspended animation, despite this initial investment.
DNB Denies Allegations of Impropriety and Lack of Transparency

Digital Nasional Bhd has vehemently denied allegations of lacking clarity in its internal operations and impropriety in its governance and procurement practices. The company asserts that its tender and procurement processes adhere to strict governance standards and best practices, including the rigorous evaluation process for the RM5 billion contract awarded to Ericsson. DNB stated that Ericsson secured the highest score in this evaluation, which was structured by an independent global professional services firm with input from approximately 50 experts from 10 countries.

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Why has the agreement between telcos and DNB for the 5G network stalled?

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