It also reckons the second 5G network will be rolled out in early 2024 depending upon DNB’s network coverage of populated areas (CoPA) reaching 80% by the end of 2023.
As of Sept 30, DNB’s 5G network CoPA has reached 70.2% with 5,873 sites.
It said to achieve the target all telcos must take an equity stake in Entity A and once achieved, telcos can move to Entity B and have their stakes acquired by those left in Entity A, in addition to the government relinquishing its shareholding in DNB to the private entities.
“We reckon that Entity A could consist of Telekom Malaysia Bhd (TM), CelcomDigi Bhd and YTL Communication Sdn Bhd, who were the first three telcos to agree to subscribe for equity stakes in DNB previously.
“Meanwhile, Entity B comprises Maxis Bhd and U Mobile Sdn Bhd who previously rejected DNB shareholding participation,” it said in a note.
AmBank Research said these players potentially have equal substantive stakes in DNB, assuming the latter is 100% owned by them.
The equity stakes would rise to 20% with a substantive value of RM300 million compared to the previously proposed 65% telcos’ shareholding, which implied an average of RM210 million for a 14% stake each.
With fibre prices being lowered following the revision of mandatory standard access pricing (MSAP), which regulates wholesale pricing for high-speed broadband, AmBank Research expects broadband prices of other telcos to follow suit after TM’s revisions on the reference access offer (RAO) for wholesale charges and reduction in its own Unifi retail prices.
“We reckon Maxis will reach an agreement with TM’s RAO and likewise revise home fibre prices by the end of this month to maintain competitiveness with the dominant fibre optic operator’s new broadband prices,” it said.
It also believes the wholesale price ceiling for the second 5G network should be on par with DNB’s 5G network, which is currently set at 13 sen per gigabyte.
The research house also elaborated on the good news from the Budget 2024 announcement.
The government has allocated RM60 million to implement the 5G Cyber Security Testing Framework and 5G Technology Local Expertise to counter rising cyber threats, especially data theft.
“We view this positively as improvement in cyber security would boost the adoption of 5G and digitalisation by enterprises and consumers.
“In addition, exemption on the 8% service tax to telecom products as part of the government’s initiative to lower 5G access costs and overall product prices could accelerate the recruitment of new subscribers,” it stated.