How TM’s Exit From DNB Validates Malaysia’s Dual 5G Network Model

• Malaysia’s dual 5G network model gets its first real stress test as Telekom Malaysia terminates its DNB wholesale pact and moves to U Mobile’s network
• TM’s switch signals that infrastructure competition is working–but raises uncomfortable questions about DNB’s financial viability

Malaysia’s dual 5G network model has been the government’s big bet on infrastructure competition since 2024. Now, that bet is being cashed in–and the results are complicated.

On February 25, Telekom Malaysia (TM)–DNB’s largest wholesale customer and, through Unifi Mobile, one of its most consequential stakeholders–announced it had signed a three-year, RM2.4 billion 5G wholesale agreement with U Mobile, the country’s newest 5G network provider. At the same time, TM formally moved to terminate its existing 5G Access Agreement with Digital Nasional Berhad (DNB) entirely.

The termination noticeissued on February 24, was sent to both DNB and the Malaysian Communications and Multimedia Commission (MCMC), and remains subject to regulatory consent.

On paper, this is exactly what the dual network model was designed to produce: an operator making a competitive commercial choice between two infrastructure providers. In practice, TM’s decision sends a much more significant signal–one that the rest of the industry, and DNB’s shareholders, will be watching very carefully.

What TM is getting from U Mobile

Under the agreement, U Mobile will provide end-to-end 5G Multi-Operator Core Network (MOCN) services to TM, covering provisioning, system integration, activation, testing and continuous optimisation. This effectively enables Unifi Mobile to migrate its 5G services from DNB’s network to U Mobile’s infrastructure once the transition is completed.

U Mobile CEO Wong Heang Tuck was unambiguous about what the contract represents–the deal was awarded following a structured evaluation process, and he positioned it as validation of U Mobile’s network quality and enterprise-grade capabilities.

The company is targeting 80% Coverage of Population (COPA) by the second half of 2026, with its rollout progressing ahead of schedule. That’s a credible claim: U Mobile had already reached 54.9% COPA less than seven months after receiving MCMC approval.

For TM, the move is framed as a strategic necessity. Mobile services are central to its convergence ambitions–integrating fixed broadband, mobile, content and smart services across consumer, SME and enterprise segments. The introduction of the dual network framework, TM said, allowed it to evaluate options that best support long-term competitiveness. It evaluated, and it chose.

Why DNB should be worried

With TM’s exit now formalised, the financial pressure on DNB becomes considerably harder to ignore. The entity has been carrying a difficult balance sheet for some time: DNB recorded a net loss of RM1.2 billion in the financial year ended December 2024, with total liabilities of approximately RM4.9 billion.

The government’s Ministry of Finance has already exercised its put option to fully exit its DNB shareholding, compelling CelcomDigi, Maxis and YTL–the three remaining shareholders–to buy over the government’s stake at approximately RM327.9 million each, with completion expected in early 2026.

Those shareholders are now absorbing both ownership and financial exposure at a moment when their largest access customer has just walked out the door. Analysts at BIMB have warned that persistent DNB losses could result in an estimated RM400 million annual earnings drag, representing a 20–25% downside risk for CelcomDigi and Maxis.

CelcomDigi had itself flagged in a stock exchange filing that U Mobile’s rollout could pressure DNB’s revenues if access seekers begin switching providers.

That switch has now begun.

The dual network model: Working as designed, or showing its cracks?

Malaysia’s move to a dual 5G network model was premised on a straightforward logic: competition between two infrastructure providers would drive better quality, better pricing and faster deployment.

The government maintained this position even as critics questioned whether the Malaysian market was large enough to sustain two wholesale 5G networks profitably. TM’s decision to switch providers–through a structured evaluation process rather than inertia–is evidence that the competitive dynamic is real.

U Mobile won the business on merit, not because it was the only option. That is exactly the outcome the policy intended. But the model’s success creates a paradox for DNB.

The entity that pioneered Malaysia’s 5G rollout, achieved over 80% population coverage, and laid the foundational infrastructure for the country’s digital economy ambitions now faces a shrinking revenue base, rising financial obligations and shareholders who must decide how much more they are prepared to invest to keep it viable.

What comes next

TM’s termination of its DNB agreement is still subject to regulatory consent, meaning MCMC will have a say in how this transition is managed. The process is expected to be planned carefully to ensure no disruption to Unifi Mobile customers, and both networks are likely to coexist operationally during the handover.

For U Mobile, securing TM is a landmark commercial win that goes well beyond revenue. It positions the company as a credible wholesale competitor capable of winning business from Malaysia’s largest fixed-line operator–and signals to the remaining MNOs that switching networks is a real option, not a theoretical one.

For the broader industry, attention now turns to whether CelcomDigi, Maxis and YTL–all shareholders in DNB–face the uncomfortable tension of deciding whether to follow TM’s lead, or to remain on DNB’s network to protect their own investment in it. That is the next chapter of Malaysia’s dual 5G story, and it may be the most consequential one yet.