None of the country's major mobile operators have signed up to the government's 5G network because of concerns over the pricing plan proposed by the Digital Nasional Berhad (DNB), according to the report on Wednesday.
But DNB said in a statement that talks to settle commercial terms were yet to start. It said it was in talks with the carriers on a "reference access offer" (RAO) - a public document that will cover the details of its 5G wholesale model, including pricing and service commitments.
"Subsequently, DNB will begin commercial negotiations with the telcos," it said, adding that the document is expected to be finalised at the end of this month.
"Hence, we will only be able to sign up the telcos after the publication of the RAO."
The deadlock comes after the government in February set up an agency to build a centralised wholesale 5G network, abandoning earlier plans to apportion spectrum to carriers, in a bid to accelerate infrastructure buildup nationwide.
DNB had told Reuters it still hoped to deploy 5G services with some operators on board in three urban centres next month, with long-term agreements to be signed in early 2022.
On Thursday, it reiterated its view that its rollout plans would lower the cost of 5G network buildup, and that telco shares have outperformed expectations, despite carriers' fears that the government initiative would hurt their business.
The Reuters' report had prompted two opposition members of parliament to call for a review of the 5G model.
Lawmaker Syed Ibrahim Syed Noh said any rollout delay risked having a negative impact on mobile customer services, foreign investment and Malaysia's digitalisation efforts.
"With this development, the government must review the single network wholesaler model... and not rush into (the project) without a thorough negotiation process with telecommunications companies," he told a news conference.
Another lawmaker, Fahmi Fadzil, went one step further and called on the government to "cancel the monopoly" held by DNB.
(Reporting by Rozanna Latiff; Editing by Martin Petty and Sanjeev Miglani)