Singapore-linked 5G operator chosen independently, does not breach good governance: Malaysia Communications Minister

Mr Fahmi, quoted by The Edge, added that the selection process was fully managed by the MCMC, and clarified that it was conducted through a “beauty contest” process, not a direct award. 

In Malaysia, the maximum foreign shareholding permitted for a network service provider is 49 per cent, he said. 

Meanwhile, U Mobile is already committed to reducing foreign holdings to 20 per cent, which Mr Fahmi raised in parliament. 

“U Mobile will reduce its foreign majority shareholding to 20 per cent from the current 48.3 per cent to ensure greater Malaysian control,” the mobile network operator said in a media statement on Nov 2.

Currently, state-owned 5G operator, Digital Nasional Bhd (DNB), is the country’s primary 5G provider. 

Mr Fahmi also stressed that U Mobile’s representation on the board of DNB did not contradict good governance. 

“It was a decision by the previous administration to allow mobile network operators to subscribe to shares in DNB, granting them board representation,” said Mr Fahmi, as quoted in The Edge.

It reported that currently, U Mobile and three other companies — CelcomDigi, Maxis, and YTL Power International Bhd each hold a 16.3 per cent stake in DNB, with the Ministry of Finance holding 34.88 per cent. 

On Nov 6, MCMC also clarified in a media statement that the selection of U Mobile was based on various factors, including the business and technical proposals submitted, as well as its customer satisfaction levels and complaint rates. 

Its performance in executing other infrastructure projects also played a part in the decision, the statement read, including “their notable contribution to the Universal Service Provision projects such as Jendela Phase and the 4G upgrading project” which was again reiterated by Mr Fahmi in parliament. 

The Jendela plan was formulated to provide wider coverage and better quality of broadband experience.

Mr Fahmi however did not explain why U Mobile’s bid was selected over other competitors, notably Maxis and CelcomDigi.

CelcomDigi has over 20 million subscribers while U Mobile only has around 8.5 million subscribers, according to the official sites of both operators. 

Maxis has over 13 million customers, according to its 2023 annual report.