Maxis agrees to join Malaysia's wholesale 5G network

Maxis agrees to join Malaysia's wholesale 5G network

Digital Nasional Malaysia.jpg

The Malaysian operator was the only mobile network operator (MNO) that hadn’t agreed access agreement with Digital Nasional Berhad.

Maxis has revealed in a statement to the Bursa Malaysia that it will sign an agreement to access the countries wholesale 5G network.

Digital Nasional Berhad (DNB) was initially formed and appointed by the government of Malaysia to build a single 5G network in 2021. Under the plans, it will sell coverage and capacity to Malaysia’s MNOs.

This unique approach to 5G was met with delays, as MNOs disputed the arrangement, on the grounds of competition, security, and transparency.

In a bid to annul their fears and give back some control, the Malaysian government released 70% of the equity in DNB to the MNOs in 2022 – an offer Maxis declined alongside U Mobile.

Maxis continued to be the most strongly apposed to the DNB model as it became the only MNO to not agree commercial access rights in 2022.

Maxis said at the time it was waiting for the review of the single wholesale model to be completed by the new government, led by Anwar Ibrahim, that commenced just after he took office towards the end of last year.

It was speculated that Maxis were hoping to be able to build their own 5G network, if the single model was not upheld.

In the end, Ibrahim’s government announced a second wholesale network would come to Malaysia in early 2024, as long as DNB reached its 80% coverage target by the end of 2023.

Maxis now has a choice: reside itself to working with DNB, or hold out for 2024 and an unknown entity, while its competitors grow their 5G subscriber count. It appears to have opted for the former.

In its statement to the Bursa Malaysia, Maxis said the rationale and benefits of the transaction with DNB include supporting its commitments to realising Malaysia’s digital ambitions and enhancing Maxis’ converged network solutions.

Speaking on the risks associated with using the network, it stated, “Maxis cannot assure its shareholders that should issues arise, they will not adversely affect its customers’ experience or quality of service to its customers as Maxis has no control over operation of the DNB 5G Access Network, which may in turn affect its operations and profitability.”

Maxis expects to incur operating expenses of about 360 million ringgit ($79.59 million) per year for the access agreement.

Faced with criticism on a lack of transparent pricing and potential monopolistic behaviours, DNB will be subject to a review of its wholesale pricing strategy by Malaysian Communications and Multimedia Commission. This was another action point from Ibrahim’s review.

DNB claims that its pricing for 5G is cheaper than what MNOs spent on 4G.

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