Digital Nasional Berhad (DNB), Malaysia's state-backed single wholesale 5G network operator, has secured $1.27 billion in Islamic financing to fund its 5G deployment, Dealroom reports.

The financing arrangement gives DNB a dedicated capital pool for the next phase of its network build. DNB operates as the sole wholesale 5G infrastructure provider in Malaysia, a model in which mobile operators buy capacity on the shared network rather than building duplicate 5G radio infrastructure themselves. The country's six mobile operators — including Maxis, CelcomDigi, U Mobile and YTL Communications — signed access agreements with DNB in 2022 and 2023 after prolonged commercial negotiations and regulatory pressure from the Malaysian Communications and Multimedia Commission (MCMC).

The deal's size — $1.27 billion — places it among the larger telecom financing transactions in Southeast Asia this cycle, and its Islamic structure reflects the depth of Malaysia's sharia-compliant capital market, which regulators and state-linked entities routinely tap for large infrastructure programmes. For DNB, whose network build has been funded through a mix of shareholder equity and vendor financing since its launch, the syndicated Islamic facility provides a more diversified funding base at a moment when the company is shouldering the full cost of a nationwide rollout.

The financing arrives amid a policy debate over the future of Malaysia's single-network 5G model. The government has signalled that a second wholesale 5G network could be permitted once coverage targets are met, a shift that would end DNB's monopoly on 5G infrastructure and introduce competitive dynamics into the wholesale market. Operators including U Mobile have publicly lobbied for the right to build their own 5G networks, arguing the current arrangement concentrates too much infrastructure control in a single entity.

Capital of this scale strengthens DNB's hand in that debate. A committed multi-billion-ringgit facility signals to operators, vendors and regulators that the wholesale operator has the balance sheet to complete its deployment obligations without depending on further injections from shareholder Khazanah Nasional, the Malaysian sovereign wealth fund.

The funds are earmarked for DNB's 5G push — the continued densification of its radio network, additional spectrum deployment and capacity expansion as subscriber traffic on the shared network grows. DNB's vendor ecosystem has centred on Ericsson, which won the original contract in 2021 to build and manage the national 5G network in a deal valued at 11 billion ringgit over ten years.

The transaction also matters beyond Malaysia. Several emerging markets are studying wholesale and shared-network models as a way to cut the cost of 5G rollouts where individual operators cannot justify duplicate investment. DNB's ability to raise large-scale commercial financing — rather than relying purely on state support — will be read as a test of whether the single wholesale network model can stand on its own financial feet.

Malaysia's government and MCMC have tied decisions on a second 5G network to the completion of the current coverage build, meaning DNB's execution over the coming quarters will determine both the pace of its deployment and the shape of the country's future 5G market structure.