Plan to divest DNB shares will benefit 5G industry, says economist

 

Economist Geoffrey Williams says breaking up the 5G monopoly is a step in the right direction. (AFP pic)

PETALING JAYA: An economist and an internet veteran have hailed the government’s move to give up its stake in Digital Nasional Bhd, a vehicle of the finance ministry tasked with rolling out the country’s 5G network.

Geoffrey Williams of the Malaysia University of Science and Technology said there was no reason for the government to own the 5G network when it was viable from a commercial perspective.

“The idea that it can be privatised and the monopoly broken up is a step in the right direction towards a more competitive market and a more liberal industrial policy,” Williams told FMT.

On Monday, the chief operations officer of the Malaysian Communications and Multimedia Commission, Ali Hanafiah Yunus, said a private entity would take over DNB once the 5G network target of 80% coverage of populated areas (CoPA) was achieved.

Ali revealed that the provision of 5G services would then come under two private entities. “Entity A will take over DNB, where it will resume the operations and implementation. Entity B will start from scratch,” he said.

Williams said if the government could recover some of its costs by selling its 35% stake in DNB, even at a profit, the original investment would have been worthwhile. The revenue can then be used for more pressing priorities.

He also said it was likely that entity A would be a conglomerate or co-investment among existing telcos, adding that this would give local companies a better chance to be part of the initiative and allay fears of foreign ownership or dominance in the 5G space.

Currently, the finance ministry holds 35% of shares in DNB. It also holds a golden share in the company, which grants various rights and privileges and covers areas such as ownership, sale or transfer of shares on the part of the government.

In October last year, CelcomDigi Bhd, through its wholly owned subsidiaries, Digi Telecommunications Sdn Bhd and Celcom Mobile Sdn Bhd, agreed to collectively take up a 65% stake in DNB alongside YTL Communications Sdn Bhd and Telekom Malaysia Bhd.

However, on May 4, CelcomDigi announced that its subsidiaries were pulling out of the deal following communications and digital minister Fahmi Fadzil’s statement the government had greenlit the establishment of a second 5G network.

Meanwhile, Mohamed Awang Lah said the government should not wait until the 80% CoPA target was achieved before disposing of its shares in DNB.

“It should be done as soon as possible, irrespective of coverage areas by DNB. After all, CoPA has never been defined in sq km,” said Mohamed, who previously headed Jaring, Malaysia’s first internet provider.

He said that as a matter of principle, the government should not be in the business of competing with private companies. - FMT