KUALA LUMPUR – Shares of CelcomDigi Bhd and Telekom Malaysia Bhd (TM) rose in the early session following the signing of share subscription agreement (SSA) to hold equities in Digital Nasional Bhd (DNB).
At 10.26am, CelcomDigi rose five sen to RM4.25 with 298,200 shares traded, while TM’s share price edged up one sen to RM5.31 with 482,200 shares changing hands.
Meanwhile, Maxis eased three sen to RM3.93 with 85,300 shares traded.
On December 1, it was announced that five mobile network operators (MNOs) had entered into conditional SSAs with DNB and the Minister of Finance, Incorporated (MoF Inc) to subscribe for equity stakes in DNB.
The five MNOs were CelcomDigi through Infranation Sdn Bhd, Maxis Bhd, U Mobile Sdn Bhd, TM and YTL Power International Bhd (YTL).
The SSAs will see each MNO injecting approximately RM233 million that will be utilised to meet DNB’s funding requirements.
The SSAs give effect to the MNOs’ collective subscription, subject to satisfactory due diligence, of 70% equity or 14% each in DNB with the government, through the MoF Inc, retaining the remaining 30% and holding a special share.
In a note today, Kenanga Research said the signing marked the first step in enabling the transition to 5G dual network from the single wholesale network model.
“We are ‘neutral’ on this development given that the final outcome on the mechanics of 5G dual network is not revealed yet, including the final equity stake for each telecommunication company (telco), key financial information on DNB, mode of payment, and any revised access rates charged by DNB to each telco,” it said.
Hence, this implied that their cash flow prowess and capacity to pay dividends remain intact at this juncture, it added.
“Therefore, we remain cautiously optimistic on the telecommunications sector pending further details and clarity. We maintain our ‘overweight’ call on the sector,” said Kenanga Research.
According to DNB, there were 3.6 million subscribers to the 5G service in the country as of end-October 2023. – December 4, 2023
