In a written reply in Parliament, Communications Minister Fahmi Fadzil said U Mobile is expected to receive its award notice to carry out the development of Malaysia’s second 5G network in February 2025, pending the approval of their Detailed Business Plan. As announced in November 2024, U Mobile was picked by the Malaysian Communications and Multimedia Commission (MCMC) as the telco to carry out the implementation of Malaysia’s second 5G network as part of the country’s shift from a Single Wholesale Network to a Dual 5G network model.
However, the orange telco still has several outstanding conditions that needs to be fulfilled before they could offer 5G services on their network.
U Mobile required to fulfill its obligations to Digital Nasional Berhad before commencing 5G services on own network
According to Fahmi, U Mobile has to complete several obligations under the Shareholder Agreement signed by U Mobile and other mobile telcos with Digital Nasional Berhad (DNB) before commencing commercial 5G services on the second 5G network. He added the process to fulfill these obligations may take at least 5 months to complete.
While waiting for the conditions to be fulfilled, Fahmi said U Mobile will be able to begin preliminary works on sites based on the Detailed Business Plan approved by the MCMC.
With U Mobile building the second 5G network, they would be competing against DNB which currently has CelcomDigi, Maxis and YTL Communications on board as shareholders. To recap, the 4 telcos (CelcomDigi, Maxis, U Mobile and YTL) currently hold a collective 65% stake, while the Ministry of Finance (via MOF Inc) holds the remaining 35% stake plus a golden share.
U Mobile will be required to divest their interest in DNB as the telco will be focusing on building its own 5G network. While building their new 5G network, U Mobile can still offer 5G services as part of its access agreement with DNB.
However, questions remain on the payback of their obligations in DNB. It isn’t clear if any other telcos would be joining U Mobile to build the second 5G network, but reports indicate that U Mobile would be doing it alone without new local partners.
U Mobile Chairman Tan Sri Vincent Tan reportedly said that U Mobile will rollout its 5G network in the next 15 to 18 months and it aims to go public on Bursa Malaysia by the end of this year.
MOF must get their money back before second 5G network is implemented
As highlighted by Digital Minister Gobind Singh Deo, the second 5G network implementation will not proceed until the Ministry of Finance gets their money back as part of the transition to a Dual 5G network model. Digital Nasional Berhad was established as a Single Wholesale Network with a budget of RM16.5 billion to develop and operate the 5G network over a period of 10 years.
The Malaysian government has so far pumped in RM500 million for initial equity injection and a shareholder loan of RM450 million into DNB. Gobind shared that the 5G rollout by DNB was mostly funded by private borrowings which include loans guaranteed by the government and other sources of financing. As of November last year, DNB has spent RM5 billion for the development and implementation of the 5G network which currently has achieved over 82% 5G population coverage.
The Digital Minister said the government’s total funding of RM950 million and bank loans guaranteed by the government will be taken over and repaid back by the telcos as part of the transition process. He emphasised that the second 5G network will not be implemented until the funding by the Ministry of Finance into DNB are returned.
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