AMBank Research believes that the second 5G network will be rolled out in early 2024, depending on DNB’s network coverage of populated areas reaching 80% by the end of this year.
KUALA LUMPUR: AmBank Research expects the share subscription agreement (SSA) in Digital Nasional Bhd (DNB) and the new equity structure to be finalised and subscribed by the end of this month to expedite 5G development rollouts across the country.
It believes that the second 5G network will be rolled out in early 2024, depending on DNB’s network coverage of populated areas (CoPA) reaching 80% by the end of this year.
As of Sept 30, DNB’s 5G network CoPA had reached 70.2%, with 5,873 sites.
It said to achieve the target, all telecommunication companies (telcos) must take an equity stake in Entity A, and once achieved, telcos can move to Entity B and have their stakes acquired by those left in Entity A, in addition to the government relinquishing its shareholding in DNB to the private entities.
“We reckon that Entity A could consist of Telekom Malaysia Bhd
(TM), CelcomDigi Bhd and YTL Communication Sdn Bhd, who were the first three telcos to agree to subscribe for equity stakes in DNB.
“Meanwhile, Entity B comprises Maxis Bhd and U Mobile Sdn Bhd, who previously declined DNB shareholding participation,” it said in a note.
AmBank Research said these players potentially have equal substantive stakes in DNB, assuming the latter is 100% owned by them.
The equity stakes would rise to 20% with a substantive value of RM300mil compared to the previously proposed 65% telcos’ shareholding, which implied an average of RM210mil for a 14% stake each.
With fibre prices being lowered following the revision of mandatory standard access pricing, which regulates wholesale pricing for high-speed broadband, AmBank Research expects broadband prices of other telcos to follow suit after TM’s revisions on the reference access offer (RAO) for wholesale charges and a reduction in its own Unifi retail prices.
“We reckon Maxis will reach an agreement with TM’s RAO and likewise revise home fibre prices by the end of this month to maintain competitiveness with the dominant fibre optic operator’s new broadband prices,” it said.
It also believes the wholesale price ceiling for the second 5G network should be on par with DNB’s 5G network, which is currently set at 13 sen per gigabyte.
The research house also noted the good news from the Budget 2024 announcement.
The government has allocated RM60mil for the implementation of the 5G Cyber Security Testing Framework and 5G Technology Local Expertise to counter rising cyber threats, especially data theft. — Bernama
