Maxis to sign 5G access agreement with DNB

Malaysian telecommunications company, Maxis’ subsidiary, Maxis Broadband plans to execute the access agreement for Maxis to gain access to 5G products and services provided by Digital Nasional (DNB) as seen by A+M in a filing on Bursa Malaysia.

According to the filing, Maxis believes that it is in the company’s best interest to enter into this access agreement, especially since the government’s announcement that the implementation of the 5G network in Malaysia will continue through DNB until it reaches 80% coverage in populated areas by the end of 2023 under its initial rollout phase.

The filing reflected the rationale behind the proposed transaction to be Maxis’ commitment to realising Malaysia’s digital ambitions and stated that its aim is to accelerate industry-wide 5G adoption while realising the government’s objectives for digitalisation.

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“DNB remains the single neutral wholesale network provider to undertake the deployment of 5G infrastructure and network nationwide as at the LPD. Therefore, the entry into the Access Agreement with DNB will enable Maxis to provide the 5G services to its customers,” the filing said.

Maxis Group is expected to incur operating expenses of approximately RM360 million per annum for the National 5G wholesale network product. 

Maxis’ consolidated earnings and EPS may be further reduced due to additional interest expense if the operating expenses for the National 5G wholesale network product are funded via bank borrowings.

However, the impact from the operating expenses and any interest expense on consolidated earnings and EPS of Maxis Group is expected to be partially offset by future cost savings from the cessation of Maxis’ existing 4G6 network and incremental income that is expected to be generated through the provision of 5G services by Maxis Group.

This news comes shortly after Maxis released a statement in May indicating interest in supporting the government’s focus on achieving 80% 5G coverage of populated areas (CoPA) by the end of 2023 under DNB. 

Following that, Maxis agreed to utilise the 5G network which was in operation by Digital Nasional in June this year, despite coverage issues according to The Star. At the time of this announcement, Maxis' CEO, Goh Siew Eng reportedly noted that Maxis will sign the 5G access agreement but that it must work closely with the relevant authorities to mitigate the coverage issues.

Fahmi Fadzil, Minister of Communications and Digital also announced future plans to add a second 5G network to complement the existing one.

“Maxis is committed to working closely with the industry to accelerate 5G for the nation in line with the Government’s digital ambitions,” said the company in May last month. It continued by emphasising the economic benefits of an efficient and affordable adoption of 5G-related products to all Malaysians as well as its aim to play a more direct role in the country’s 5G implementation by leveraging its expertise, resources and existing infrastructure.

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