PETALING JAYA: Maxis Bhd’s plans for 5G is still up in the air given that the group was the only mobile network operator (MNO) that has not signed an equity or wholesale agreement with Digital Nasional Berhad (DNB).
The matter was also an item of interest among curious shareholders, who sought clarity on the company’s 5G plans at the group’s annual general meeting on May 18.
When asked why Maxis has been reluctant to ink a deal with DNB, group CEO Goh Seow Eng told shareholders that the group was “working with DNB and the ministry on the access agreement” network, as reported by The Edge.
“Maxis looks forward to providing 5G-related products and services to our customers as soon as possible,” said Goh.
On the government’s decision to allow a second 5G network instead of the originally proposed single wholesale network model, Goh said allowing competition would bring benefits to multiple stakeholders.
“Maxis believes that having two 5G networks will benefit the industry. Competition will ensure operational and cost efficiencies and continuous network improvement,” he said.
The dual network market structure, he elaborated, would provide MNOs the ability to differentiate by providing better choice and value for money for customers.
Goh also echoed the communications and digital minister’s rationale that having two networks would mitigate the risk of a single point of failure.
Research houses not alarmed
RHB Investment Bank analyst Jeffrey Tan in a note today highlighted that Maxis is still having discussions on modifications to access conditions (including pricing).
“The consent of shareholders may likely not be required if wholesale prices are more accommodative,” said Tan.
Tan, however, admitted that the uncertainty regarding 5G will continue to weigh on the group.
“A lower 4 sen DPS (dividend per share) (98% payout) declared highlights uncertainties on the 5G capex front (contingent on the structure and cost of the dual network model),” he said.
“We expect the issue to continue weighing on the group’s earnings and dividend outlook,” he added.
Meanwhile, delays in signing the access agreement are not of much concern to Public Investment Bank analyst Eltricia Foong.
“It remains unclear whether it will be able to offer 5G services to its customers anytime soon,” she said.
“Nevertheless, we see minimal impact arising from this as the take-up rate for 5G remains slow,” she said.
Kenanga analyst Ahmad Ramzani Ramli noted that Maxis has still yet to decide on the launch date of its 5G service.
“Negotiations are also underway between all MNOs on the formation of Entity A (the consortium that will own and operate the first 5G network and Entity B (the entity that will own and operate the second 5G network),” he said.
However, he pointed out that Maxis enjoys a strong brand loyalty amongst its premium customers, which remains to be an upside for the company.
Maxis and U Mobile were the only two MNOs which did not sign up for equity participation with DNB.
However, unlike Maxis, U Mobile had agreed to participate in the wholesale access agreement with DNB to offer 5G services to consumers.
In response to a question on whether Maxis would merge with U Mobile to develop its 5G network, Goh said “We don’t comment on anything that is speculative in nature”.
At 11.45am, Maxis Bhd’s share price slipped 3.91% or 17 sen to RM4.18, giving it a market capitalisation of RM32.81 billion.