TELEKOM MALAYSIA RECORDS 9 MONTHS PROFIT AFTER TAX AND MINORITY INTEREST OF RM1,789.3 MILLION

Kuala Lumpur, Tuesday, 30 November 2004 - Telekom Malaysia Berhad expects to turn in strong financial results for the full year of 2004.

The Group registered a Profit After Tax and Minority Interest (PATAMI) of RM1,789.3 million for the nine months ended 30 September 2004, as compared to RM890.7 million registered in the corresponding period last year. This is mainly driven by Exceptional Gain of RM622.4 million from the sale of Telkom South Africa, Telekom Malaysia's subsidiary in South Africa and RM22 million from the sale of Sheba Telecom, Celcom (Malaysia) Berhad's (Celcom) subsidiary in Bangladesh.

Exclusive of the Exceptional Gain, the Group's PATAMI grew by 28% from RM890.7 million for the same corresponding period last year to RM1,144.9 million.

The Group also recorded a 13.8% increase in operating revenue of RM9,785.8 million as compared to RM8,596.3 million recorded for the same period in 2003.

Dato' Abdul Wahid Omar, Group Chief Executive Officer, Telekom Malaysia Berhad said, "The increase in revenue was mainly attributed to the growth in the cellular and multimedia as well as better performance of our overseas operations. For the 9-month ended 30 September 2004, the cellular business registered a 48.4% growth whilst the internet and multimedia business registered a 26% growth. Our overseas investments contributed RM388 million to the Group's PATAMI."

PEFORMANCE

Fixed Line Business and Residential continued to be the major contributor to the Group's revenue, followed by cellular, leased services and internet and multimedia.

Internet services continued to record encouraging growth for the third quarter of 2004, bringing the customer base to 1.86 million for the dial up customers while broadband customers increased to 226,000 customers compared to 71,000 in the corresponding period in 2003. The demand for high speed broadband continues to increase steadily and to meet this demand Telekom Malaysia has increased port availability to more than 500,000 lines. To this end, Telekom Malaysia's subsidiary, TM Net Sdn Bhd (TM Net) is also targeting to grow its hot spots to 1,000 by middle of 2005.

For the period ending 30 September 2004, Celcom recorded a Profit After Tax of RM383.6 million, a 79.4% increase from the corresponding period last year.

MOVING FORWARD

On the current year's outlook, Dato' Abdul Wahid Omar, Group Chief Executive Officer of Telekom Malaysia commented: "Our performance for this quarter has been positive. We will continue to focus on further strengthening our financial position and service competitiveness. Now that the restructuring of TM Telco into TM Wholesale and TM Retail is firmly in place, the prospects for our core telco business are indeed very challenging. We are optimistic that this exercise will ensure a strong and stable cash flow generation from fixed lines as well as increase revenue by capitalising on existing infrastructure."

With the completion of the Celcom integration in October, Celcom is aggressively addressing its market share in the local cellular market. Celcom recorded 32.6% growth in net customer addition of 302,000 during the 3rd quarter, the highest since the merger. This brings Celcom's total customer base to 4.975 million subscribers.

As for data, value-added services and broadband business, Celcom, in collaboration with TM Net recently launched Celcom WiFi which allows customers to enjoy wireless broadband internet access via Short-Messaging-Service (SMS). The move is in line with the Group's effort in accelerating the rollout of broadband using both fixed and wireless access to achieve the target set in the National Broadband Plan by the Government.

The Group is also looking at investment opportunities in other emerging markets especially in selected parts of Asia.

Barring unforeseen circumstances, the Group is optimistic of its prospects for the remaining of 2004 to be stable.