Digital Nasional Bhd (DNB) has secured RM5.2 billion in syndicated Islamic term financing, marking a pivotal development in Malaysia’s ongoing rollout of a dual 5G network. The financing arrangement, completed ahead of the expiry of DNB’s Government Guarantee Revolving Credit Facility on Sept. 29, provides the wholesale network operator with a more sustainable funding structure as ownership transitions to its three mobile network operator (MNO) shareholders.
The refinancing is one of the largest syndicated facilities arranged for an unlisted Malaysian company and is designed to support DNB’s operational and investment activities. It also underpins the planned exit of the Ministry of Finance Inc (MOF Inc) as an ordinary shareholder, with ownership expected to be equally divided among CelcomDigi Bhd, Maxis Broadband Sdn Bhd, and YTL Power International Bhd by early fourth quarter 2026. MOF Inc will retain a special share in DNB despite relinquishing its ordinary shares.
This financing milestone coincides with regulatory developments, including the assignment of the full 100MHz spectrum in the 3.3GHz to 3.4GHz band to DNB and the conversion of DNB’s entire 240MHz spectrum holdings into a Spectrum Assignment, effective Oct. 1. The new spectrum arrangement offers greater regulatory certainty and expands capacity for advanced network technologies such as Massive MIMO, carrier aggregation, 5G Advanced, and artificial intelligence-driven capabilities.
Datuk Azman Ismail, DNB’s chief executive officer, described the financing as a significant endorsement of the company’s business fundamentals and long-term role in Malaysia’s digital economy. He emphasized that the funding enables DNB to operate independently while continuing to invest in network enhancements and capacity expansion.
Industry experts have noted that while the financing offers the capital needed for operations and investments, and the spectrum assignment provides the regulatory certainty required to plan long-term network infrastructure, the commercial success of DNB depends on effective utilisation and monetisation of the spectrum. This includes generating sufficient wholesale demand from MNOs, setting appropriate access pricing, and achieving high network utilisation to meet debt servicing and future investment needs.
Analysts have previously highlighted concerns regarding DNB’s funding requirements. Kenanga Research projected that DNB’s net losses might narrow from RM1.21 billion in financial year 2024 to RM750 million in 2027 but cautioned on the potential financial impact on shareholders CelcomDigi and Maxis. These losses were estimated to affect roughly 8% of the 2027 earnings of both companies.
CelcomDigi stated that the new financing is expected to reduce the need for additional equity injections from MNO shareholders, allowing them to focus on accelerating 5G network efficiency and performance. The company emphasized that combining its nationwide network assets with DNB's 200MHz of contiguous mid-band spectrum would enhance 5G capacity, coverage, and customer experience, while supporting cost efficiencies through infrastructure sharing.
Credit rating agencies have flagged DNB-related funding needs as a principal uncertainty for CelcomDigi’s cash flow outlook but generally regard any additional funding requirements as manageable given the group’s current financial position. Nonetheless, they cautioned that material increases in commitments could strain financial metrics.
Research firms have noted that while DNB’s financial condition is expected to improve gradually, its profitability hinges significantly on cost management. Furthermore, broader challenges remain in 5G monetisation across the sector, with operators continuing to grapple with converting enhanced network capabilities into substantial revenue growth, particularly from consumer segments.
In this context, DNB’s new financing and spectrum assignment represent important steps in Malaysia’s 5G development, though the company’s long-term financial sustainability will depend on market demand, pricing strategies, and operational efficiencies.