In an endeavor to harness the digital ambitions of Malaysia, Maxis Broadband, a subsidiary of the nation’s telecom titan, Maxis, is set to ink an access agreement. This move, seen by A+M in a Bursa Malaysia filing, aims to bring Maxis into the 5G arena, courtesy of Digital Nasional’s (DNB) offerings.
The filing suggests that Maxis sees the access agreement as a key strategic move, particularly in light of the government’s pronouncement. Malaysia’s authorities have proclaimed that the expansion of the country’s 5G network, under DNB, will press forward until it encompasses 80% of populated regions by year-end 2023 in its preliminary phase of deployment.
Such a move is born from Maxis’ dedication to driving Malaysia’s digital future. The telecom giant is setting the stage for an industry-wide acceleration of 5G adoption, aligning its goals with the government’s drive for digitization.
With DNB as the solo impartial wholesale network provider assigned to roll out the 5G infrastructure across the country, the agreement will permit Maxis to offer 5G services to its customer base.
However, this agreement isn’t without its financial implications. Maxis Group projects that it will shoulder operating expenses of about RM360 million annually for the National 5G wholesale network product. If bank borrowings fund these operating expenses, Maxis might see a decrease in consolidated earnings and EPS due to additional interest costs.
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Still, Maxis Group anticipates that these operating expenses and possible interest costs will be partly counterbalanced by future cost reductions from the discontinuation of Maxis’ existing 4G6 network. Additionally, the income projected from providing 5G services may further mitigate these financial burdens.
This comes on the heels of Maxis’ announcement in May to endorse the government’s goal of achieving 80% 5G coverage of populated areas (CoPA) by 2023 through DNB.
Despite potential coverage issues, Maxis agreed in June to use DNB’s operational 5G network. Maxis’ CEO, Goh Siew Eng, underscored the need to work hand-in-hand with relevant authorities to alleviate these coverage concerns during this agreement announcement.
Communications and Digital Minister Fahmi Fadzil revealed plans to introduce a second 5G network to supplement the existing one.
Last May, Maxis reiterated its commitment to aligning with the government’s digital ambitions by working closely with industry partners to expedite 5G adoption in the country. The company underscored the economic benefits of adopting 5G technology in a cost-efficient manner, highlighting its aim to take on a more central role in Malaysia’s 5G implementation by leveraging its wealth of expertise, resources, and existing infrastructure.
Source: Marketing Interactive
