Malaysian 5G wholesale operator in Digital Nasional Bhd (DNB) said on Friday that Telekom Malaysia’s share subscription agreement (SSA) to buy a stake in DNB has been terminated after it failed to meet the deadline to finalise the SSA.
Telekom Malaysia signed its SSA – along with CelcomDigi, Maxis, U Mobile and YTL Power International – in December 2023 to take a 14% stake each in DNB for a collective 70% stake. While the other four telcos completed the SSA process at the end of June, TM received a deadline extension until August 21, as it had to await approval from shareholders at an EGM on that date in accordance with its governance requirements.
However, Telekom Malaysia said in a statement on Friday that it needed more time to resolve matters related to the EGM, and had applied to DNB on July 18 for another extension to the deadline. DNB rejected that application, as well as an appeal, and officially terminated the SSA on Friday.
Telekom Malaysia added that the tenure of Nik Azli Abu Zahar, its nominee to serve on the DNB board, has also ceased.
Telekom Malaysia’s ouster from DNB leaves CelcomDigi, Maxis, U Mobile and YTL with a 16.28% stake each in DNB for a collective 65.12% stake. The Minister of Finance (MOF) owns the remaining 34.88% stake in DNB, as well as a Special Share for a designated period. This allocation has been in place since June as a contingency in case Telekom Malaysia was unable to finalise its SSA.
Telekom Malaysia said the termination would not impact its financial results for the year ending December 31, 2024. Under the SSA, each telco is required to inject MYR233 million (US$50.1 million) into DNB.
Telekom Malaysia also stressed that its ouster from DNB is an ownership matter and doesn’t affect its service. “This turn of event does not affect TM’s current 5G offerings to customers, as its 5G wholesale service subscription from DNB remains in place,” the statement said.
The telco also said it will “continue to play a key role in supporting the nation’s 5G ecosystem and transition to the 5G dual network”, citing its fibre broadband business.
