Two of the country's largest wireless carriers - Maxis Bhd and U Mobile - declined to take up stakes in DNB, disrupting the government's plan to sign agreements with other operators, Reuters reported on Wednesday.
The government had wanted six of the country's mobile operators to agree on taking a combined 70% stake in DNB by Wednesday, following months of talks.
Finance Minister Tengku Zafrul Aziz told Bernama the withdrawal of the two companies would likely delay Malaysia's commercial 5G rollout, as some of the remaining firms would need to re-consult their management on potentially taking an adjusted stake in DNB.
The government hoped to eventually complete the equity sale this month, Zafrul said, adding that it was also considering selling some DNB shares to foreign players.
Despite the delay, Zafrul said DNB remained on target to achieve 80% 5G coverage in populated areas by 2024, according to Bernama.
Malaysia's 5G plans have been repeatedly delayed since last year amid an impasse between DNB and major carriers over pricing and transparency, including concern that a sole state-run network would result in a nationalised monopoly.
Two smaller carriers started 5G trials in December 2021, but four major operators - including Maxis and U Mobile - refused to get on board and asked for a second 5G service to be set up instead.
The government rejected that proposal but offered the carriers stakes to alleviate their concerns, arguing the plan would reduce costs and improve efficiency.
DNB has said the country's communications regulator will adopt stringent public guidelines to ensure fair pricing and a smooth roll-out.
(Reporting by Rozanna Latiff; Editing by Ed Davies)