The Dual 5G network seems to be stuck, as mistrust between parties grows

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So at the end of March, our Communications Minister, Fahmi Fadzil told the media that the Dual 5G network meeting was expected to be held in early April. There was no news regarding that until now, as ChannelNewsAsia.com just reported that the next phase is in a status quo. 

According to the media, both government officials and industry executives have not agreed on the conditions precedents (CP). On the CP, it includes which directors would represent the private telcos in Digital Nasional Berhad (DNB), and external experts to complete three confidential audits on the state-owned entity. A senior Finance Ministry official acknowledged that the auditing is still ongoing. 

On top of that, the official also stated that the status quo is due to the telcos having "doubts on the path forward". Moreover, there is also a lack of visibility in the offtake of 5G, as noted by analysts. A bank-owned investment research firm said, “The whole situation is fuzzy because there is no clarity on the pricing of the 5G services and also the question of the shareholding at DNB". 

Besides the mistrust issue, there are reports of DNB's financial concerns. Apparently, DNB borrowed RM2 billion from a local bank to fund the 5G infrastructure rollout alongside other financing agreements. Since nothing has been signed with the telcos, the "bankers are getting nervous" because that would mean DNB needs an extension of the government guarantee which will expire in December 2024.

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