PETALING JAYA: Maxis Bhd’s decision to invest in Digital Nasional Bhd (DNB) signifies that industry players acknowledge the 5G network operator’s cost-effectiveness, said BMI Country Risk and Industry Research.
All the involved telecommunications players, it said, have recognised that it would be more cost-effective to pool their investments onto a shared platform, where all would have equal access rights.
This approach appears to be more favourable than building separate networks and negotiating expensive interconnection agreements.
BMI, a Fitch Solutions company, said the five telcos’ decisions are likely influenced by rising inflation, which weighed heavily on their highly leveraged mobile businesses.
Furthermore, by taking up equity in DNB, they are able to influence its commercial decisions, including vendor selection, infrastructure deployment schedules, and retail and wholesale tariffs.
“Maxis’ reluctant agreement to join rivals TM, CelcomDigi, U Mobile and YTL in taking a position in DNB suggests that it sees no value in continuing to lobby the government to scrap the DNB scheme and instead allow operators to build their own 5G networks,” it said.
“The soon-to-be-established second 5G platform could be repositioned as a carrier-neutral network to which smaller players and virtual service providers could sign up,” BMI also suggested.
The research firm forecasts Malaysian 5G connection figures to reach 33.8 million by 2032, representing 75.3% of the total mobile user base.
Last week, communications and digital minister Fahmi Fadzil said the five major telcos – CelcomDigi, Maxis, Telekom Malaysia, U Mobile and YTL Communications – will support DNB’s 5G network implementation until it reaches 80% coverage in populated areas before switching to a dual network model.
He also confirmed that Maxis had on July 11 signed a 5G access agreement with DNB after reaching a resolution on several issues related to the deal.
As of June 30, DNB has achieved 64.7% 5G network coverage and is on track to meet its set targets, he added.
Maxis is the last of the country’s mobile network operators to agree to execute the 5G access agreement with DNB.
In a filing with Bursa Malaysia on July 14, Maxis said it will seek its shareholders’ approval in order to execute the agreement.
“DNB remains the single neutral wholesale network provider to undertake the deployment of 5G infrastructure and network nationwide as at the latest practicable date.
“Therefore, the entry into the access agreement with DNB will enable Maxis to provide 5G services to its customers,” it said.
As at 11.53am, Maxis’s share price was down 1 sen (0.25%) at RM 4.04, giving it a market capitalisation of RM 31.64 billion.