Report: Maxis poised to lead Malaysia's second 5G network rollout

KUALA LUMPUR, Aug 23 — Maxis Bhd is expected to lead the rollout of Malaysia’s second 5G network, according to RHB Research.

Online news portal Free Malaysia Today (FMT) reported that Maxis, controlled by Ananda Krishnan, is one of four telecommunications companies that submitted bids to the Malaysian Communications and Multimedia Commission (MCMC) for the second 5G network, alongside CelcomDigi Bhd, Telekom Malaysia Bhd, and U Mobile Sdn Bhd.

Communications Minister Fahmi Fadzil confirmed the bids earlier this month, with an announcement on the winning bid expected by the end of the third quarter. According to the report, RHB Research noted that Maxis has a strong chance due to its early 5G network modernisation and solid track record in commercial execution.

RHB also suggested Maxis is holding back on capital expenditure (capex) to prepare for the 5G outcome while balancing mid-term dividend expectations. AmInvestment Bank echoed this sentiment, reporting that Maxis reduced its capex spending by 25 per cent in the first half of FY2024, from RM296 million in 1H FY2023 to RM222 million.

In its Q2 FY2024 financial report, Maxis stated that capex spending would remain below RM1 billion for FY2024, before considering any financial impact from 5G. The company also confirmed its participation in the spectrum tender for the second 5G network and aligned itself with the government’s decision on the dual 5G network.

The report said Maxis CEO Goh Seow Eng expressed the company’s readiness to build the second 5G network immediately to accelerate Malaysia’s 5G plan and its economic benefits.

Meanwhile, state-run 5G network operator Digital Nasional Bhd (DNB) announced last month that Maxis, CelcomDigi, U Mobile, and YTL had completed their share subscription agreements (SSA) with DNB. Telekom Malaysia Bhd was still awaiting shareholder approval for the SSA.

The SSA stipulates that the five telcos will collectively acquire a 70 per cent stake in DNB, with each holding a 14 per cent stake, while the government will retain a 30 per cent stake. Telcos will also have the option to exit DNB to join the second 5G network.

DNB was established in 2021 to develop Malaysia’s 5G infrastructure, which is currently used by the telcos to offer 5G services.