Fresh twist in 5G saga

MALAYSIA’S troublesome 5G rollout is taking another strange turn.

Digital Nasional Bhd (DNB) is now insisting that Telekom Malaysia Bhd (TM) cannot leave its fold – or more specifically, cannot opt out of the access agreements between the two.

The background to this is that in 2021 the government decided to have a single 5G network funded and rolled out by DNB, a state-owned entity.

A few years later, a new government was formed, which then decided that the single-network model was a bad idea and issued a second 5G licence to a telecommunications company (telco) best described as a challenger to the larger players.

All the existing telcos had earlier inked access agreements with DNB, as that arrangement came first.

Now TM is seeking to exit that agreement and instead sign access arrangements with the second 5G network provider.

DNB’s contention is likely based on its interpretation that TM’s right to opt out of the access agreement has lapsed – something TM disputes, noting that it is acting within its rights and in the best interests of both itself and its customers.

Concurrently, it is understood that DNB has initiated legal action against infrastructure service providers it had previously contracted, citing late or insufficient delivery of services.

This litigious stance is yet another illustration of how controversial Malaysia’s entire 5G rollout has become.

For the big telcos, although this is not a situation they had envisaged or wanted, their exposure appears limited to the access fees they are paying to DNB in dribs and drabs.

As equity shareholders in DNB, they are also expected to inject additional capital into the company, although that has yet to transpire.

Meanwhile, U Mobile Sdn Bhd – the challenger operator awarded the right to build the second 5G network – could face a major hiccup if indeed TM’s plan to use its services gets blocked by DNB.