Malaysia's DNB turns private after 31.18% state stake sale

By Rebecca Stone

Malaysia's Ministry of Finance (MOF) has sold its entire 31.18% stake in Digital Nasional Berhad (DNB), Malaysia's first wholesale 5G network operator. The sale leaves CelcomDigi, Maxis and YTL Communications with equal ownership following completion of a MYR5.2 billion (US$1.27 billion) syndicated Islamic term financing deal that reduced the government's liability to zero.

Communications Minister Fahmi Fadzil told local media: “I am happy to say that from the end of September, the government no longer has any liability. We are very thankful that as far as the mobile network operators are concerned, they have committed to what they said they would.” The New Straits Times reported the remarks.

Fahmi said the government expects DNB to become fully self-financing and ruled out further assistance. Public support has therefore shifted from direct funding to a residual governance role. The three carriers now carry the ordinary equity exposure, and DNB must meet its financing obligations from operating revenue.

What does “fully privatized” mean?

DNB's ownership mix has changed from one state shareholder alongside three operators to three equal operator shareholders. The ministry has divested all 31.18%, but the government still holds a special share to protect national interests and ensure “continued stewardship of key strategic matters.”

Neither the sale nor the release explains the special share's voting rights, veto powers or transfer restrictions. It therefore supports “fully privatized” only in the narrower sense of transferring ordinary shareholding, not eliminating state influence. The release also calls the MOF a majority shareholder as it exits while identifying the stake sold as 31.18%, without reconciling the wording.

It does not publish each carrier's resulting percentage, although it states that the three holdings are equal.

How is DNB funding the transition?

The syndicated Islamic term financing, announced in early October, refinances DNB's Government Guarantee Revolving Credit Facility (GGRCF), which has a stated expiry of September 29, 2026. DNB presents the replacement as a sustainable, long-term funding structure for future growth.

DNB must repay the financing from its own cash flow. The announcement omits the tenor, pricing, amortization schedule and security terms, so the MYR5.2 billion headline does not show the full cost or timing of repayment.

DNB CEO Azman Ismail said the financing, recent spectrum assignments and shareholder transition still underway would sustain operations under Malaysia's dual 5G network structure. He expects revenue from existing access agreements with telecom operators to support debt service, arguing that growing 5G use generates higher income.

That is a forecast tied to traffic and commercial take-up, not a disclosed operating result. The release provides no subscriber total, geographic coverage, throughput, access-contract value or customer ramp, leaving the scale and timing of expected cash flow unquantified.

The completed facts are the stake transfer and the ministry's zero liability. The revenue case remains prospective, and the government has said it will not underwrite it again.

Can commercial 5G replace state support?

DNB plans to expand into corporate and industry sectors. Ismail said greater enterprise use of 5G could improve operational efficiency and create new market opportunities.

That plan extends beyond existing operator access agreements, yet the source names no corporate customers, contract sizes, sector priorities, deployment milestones or revenue targets. The operational benefit remains a management proposition rather than a measured result. DNB has also set no timetable for the expansion.

The spectrum assignments receive only the description “recent.” No bands, coverage obligations or associated capital spending are identified, omissions that matter because DNB's case rests on 5G usage generating higher income.

With the shareholder transition still underway, DNB's next disclosures on debt terms, network usage and signed enterprise contracts will show whether private ownership can finance 5G expansion without public support.