Malaysian 5G Network Owner Terminates Stake Subscription Agreement With Telekom Malaysia

By Ying Xian Wong

Telekom Malaysia's share subscription agreement with state-owned Digital Nasional, the country's sole 5G service provider, has been terminated after the company failed to secure additional time to seek shareholder approval.

In a late Friday filing, Telekom Malaysia said it requested an extension from Digital Nasional last month, as the agreement was a related party transaction. However, Digital Nasional rejected the request. TM later submitted an appeal for reconsideration, which was also declined. On August 23, Digital Nasional issued a termination notice for TM's share subscription agreement.

However, Telekom Malaysia emphasized that its existing 5G services for customers won't be affected, as its 5G wholesale service agreement with Digital Nasional remains in place. The termination isn't expected to have a significant impact on TM's financial performance for 2024, the company added.

In June, Digital Nasional announced the completion of share subscription agreements with four mobile network operators -- Maxis, CelcomDigi, U Mobile, and YTL Power International. The four operators acquired approximately 65.1% equity in DNB, with each holding a 16.3% stake. The Malaysian government retains a 34.9% stake and a special share in DNB for a designated period, DNB said in a statement.

Telekom Malaysia had requested an extension to seek shareholder approval, with the final deadline set by DNB for August 21. The stake taken by each company was higher than the 14% initially expected in December 2023.

Write to Ying Xian Wong at yingxian.wong@wsj.com

(END) Dow Jones Newswires

August 25, 2024 21:21 ET (01:21 GMT)

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