TM versus DNB 5G dispute and MoF’s double role

Telekom Malaysia’s move to exit its 5G wholesale access agreement with Digital Nasional Berhad comes at a sensitive time for the industry. Malaysia is in the middle of shifting from a single wholesale 5G model to a dual network structure, and TM is now trying to move from DNB to U Mobile as its 5G partner while DNB insists the long term contract is still valid.

The government has framed the TM–DNB clash as a commercial contract dispute between two licensees under the Malaysian Communications and Multimedia Commission. The Communications Minister has also repeated that the national 5G rollout target of 95% coverage in populated areas remains, with current coverage already around 80%, so a second network can proceed. On the surface, consumers are told that nothing changes for the wider 5G plan.

Behind that, the two companies are taking opposite positions. TM says it exercised its contractual rights under the 5G Access Agreement after a detailed legal review and that its notice to terminate is valid. It links the decision directly to the implementation of the dual 5G network model and points to dispute resolution mechanisms in the contract. TM has also assured customers that services will continue while any transition is handled in phases.

DNB says the opposite. It maintains that the access agreement with TM runs until October 2032 and that the contract sets specific conditions for early termination. In DNB’s view, TM has not followed those conditions, so the notice is not effective and the agreement remains valid, binding and enforceable while DNB considers its options. In other words, TM is trying to leave, DNB is treating TM as still locked in.

At the same time, TM has already chosen its future 5G path. It has signed a three year 5G Multi Operator Core Network arrangement with U Mobile. Under this new deal, U Mobile will provide end to end 5G services to TM, including provisioning, system integration, activation, testing and continuous optimisation of the 5G MOCN setup. TM presents this shift as part of its convergence strategy, where mobile, fibre, content and smart services are integrated under one group.

It is important to remember that TM has long term infrastructure relationships with both DNB and U Mobile. From the beginning of the single wholesale 5G rollout, TM has been a key fibre and transmission partner to DNB, not only a retail access customer. TM also has a long running infrastructure and backhaul partnership with U Mobile, and the new 5G MOCN wholesale deal sits on top of that. In all these roles TM is an infrastructure and wholesale partner, not an equity owner.

This is where the ownership picture matters. After the current restructuring is completed, DNB will be fully owned by three operators: CelcomDigi, Maxis and YTL (via the Yes 5G business). The government investment arm, Minister of Finance Inc, is selling its stake and shareholder loans to these three companies. TM is not a DNB shareholder and it is also not a shareholder in U Mobile. It is the only large operator that uses (or has used) DNB’s wholesale 5G services without having any equity or board seat in the company.

There is also a governance conflict of interest that is difficult to ignore. DNB is a special purpose company set up under the Ministry of Finance, and its CEO is appointed by MoF as shareholder of the 5G vehicle. TM is a listed company, but its CEO appointment still requires consent from MoF Inc as special shareholder, on top of approval by TM’s board. In practice this means the same ministry has influence over who leads both DNB and TM, while those two companies are now in a direct commercial dispute over a multi year 5G contract. On paper, the TM–DNB fight is framed as a normal clash between two licensees, but in reality the government, through MoF, sits on both sides of the table.

As MoF exits DNB and sells its stake to CelcomDigi, Maxis and YTL, that formal overlap at the shareholder level should reduce. However, this transition is still in progress, and the current dispute over TM’s 5G access agreement is happening while MoF continues to play a key role in both entities. That timing complicates the picture for the industry, even if the dispute is handled strictly through the contract’s own processes.

From an industry structure point of view, TM’s realignment has several effects.

First, it changes the balance of traffic and revenue between the two 5G networks. If TM gradually moves its 5G wholesale needs from DNB to U Mobile, then U Mobile’s second network gains more scale, while DNB becomes more dependent on its three shareholder operators CelcomDigi, Maxis and YTL Yes. This makes the split between the two nationwide 5G networks clearer, instead of having one dominant wholesale platform serving all major operators in the same way.

Second, it sharpens TM’s position in the market. TM wants to be a convergence player, using Unifi Mobile as one part of a broader mix that includes fibre broadband, content and enterprise solutions. By placing its 5G radio access and core needs with U Mobile under a MOCN model, while continuing to supply fibre to both U Mobile and DNB, TM positions itself at the centre of Malaysia’s 5G infrastructure layer rather than tying its future only to the single wholesale network.

Third, it changes the risk for DNB. Losing a major wholesale customer like TM would put more weight on traffic from DNB’s shareholder operators to support its long term business case. At the same time, DNB can argue that its owners are deeply committed to the platform, since they are both shareholders and wholesale customers. How this plays out will depend on future pricing, usage and how fast DNB can move beyond the initial rollout phase into a more stable, cost sharing model for its three owners.

For consumers and enterprises, the short term message is continuity. The minister has said the coverage targets remain, TM has promised an orderly and phased transition, and DNB has made clear it will protect its contractual interests while keeping services running. As long as these statements hold, most users will simply see ongoing 5G expansion, with performance depending on how each network invests in capacity and optimisation.

In the medium to long term, the bigger story is about structure and bargaining power. One national 5G network will be owned by three large mobile operators that also buy its services. The other will be operated by U Mobile, with TM as a major infrastructure and wholesale partner but not a shareholder. TM’s attempt to exit its DNB access agreement and shift to U Mobile sits right at the centre of this change, and the way the dispute is settled will help define how independent and balanced Malaysia’s dual 5G networks really are.