Discussions are now focused on aligning the wholesale agreement to reflect the policy shift towards a dual 5G network, its analyst Jeffrey Tan said.

“This portends lower access cost or outlay under modified terms, with the likelihood of a shorter tenure (versus a 10-year agreement) contracted in,” Tan said in a company update.

According to him, the discussions were understood to have factored in certain conduct by mobile network operators (MNOs) with explicit terms and clauses forming part of the investment in Digital Nasional Bhd (DNB).

“This would see the MNOs eventually divesting their equity stake(s) in DNB for spectrum in the second 5G network,” he said.

Nonetheless, Tan noted that market concerns are on the company’s mid-term capital expenditure (capex) and dividend sustainability, with the former likely to remain elevated.

“While the management’s current capex guidance implies a manageable capex and sales (excluding 5G) of about 11%, the narrative on growth capex, for instance, fibre investments and 5G (depending on how Entity B plays out) suggests potentially higher capex intensity in the medium term, which could come at the expense of dividend payouts.

“Clarity on the new 5G wholesale model remains a key share price catalyst,” he said.

Tan retained a “Neutral” call on Maxis with a discounted cash flow-derived target price of RM4.03.

At 11.55 am, Maxis’ share price fell seven sen to RM3.95 with 520,700 shares changing hands.