TM RECORDS INCREASE IN REVENUE TO RM3.4 BILLION

OVERVIEW
Telekom Malaysia Berhad (TM) today announced its unaudited first quarter results for the period ended 31 March 2005.

The Group recorded a 4.8% increase in operating revenue of RM3,414.9 million as compared to RM3,257.0 million recorded for the same period in 2004.

The increase in revenue was mainly attributed to the growth in the cellular and Internet and multimedia, as well as better performance of our overseas operations. For the quarter ended 31 March 2005, the cellular business (domestic & overseas) registered a 14.2% year-on-year growth whilst the internet and multimedia business registered a robust 51.4% growth.

The Group also registered a Profit After Tax and Minority Interest (PATAMI) of RM374.5 million for the quarter ended 30 March 2005, as compared to RM507.1 million registered in the corresponding period last year. The lower profits are attributable to the Voluntary Separation Scheme (VSS) one off compensation payout of RM145.4 million as well as the absence of contribution from the investment in Telkom South Africa that contributed RM87.5 million in the first quarter of 2004. TM divested its 12% stake in Telkom South Africa last year for a sum of RM1, 516.8 million. Overseas investments contributed RM96.7 million to the Group’s PATAMI reflecting a 25.8% contribution as compared to 15.8% from first quarter of 2004.

PERFORMANCE
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.

Cellular
Fixed line continues to be the main cash generator. However, the contribution of the cellular segment to the overall Group revenue continued to grow, in line with the Group’s expectations. Celcom posted a Profit After Tax of RM139.5 million, a 6.5% increase from the corresponding period in 2004, mainly driven by growth in new subscriptions. For the period ended March 2005, Celcom recorded a net customer addition of 452,000 from December 2004. The customer base of 5.79 million reflects a growth of 8.5%. Prepaid customers accounted for 80% of the total customer base while the postpaid customer segment showed encouraging growth of 27,000 new additions in contrast to the negative net addition for the last two quarters. ARPU remains stable despite the strong net customer addition and competitive pricing. With the recent introduction of 3G, TM is confident that this positive trend will continue.

Multimedia
TM’s internet services particularly broadband, continued to register strong growth in the first quarter of 2005, bringing the customer base to 1.96 million for dial up customers while broadband customers increased to 296,000 customers compared to 137,000 in the corresponding period in 2004. With the increased number of ports, TM will continue to meet the increasing demand for broadband. In addition, TM is also upgrading the local access with fibre and wireless broadband in order to meet targets set in the National Broadband Plan.

Overseas Investments
Contribution from TM’s overseas investments has shown significant improvement over that of the corresponding period. TM’s overseas investments contributed approximately RM96.7 million to the Group’s profit after tax, compared to RM80.3 million in 2004. Sri Lanka continued to record strong profits of RM65.9 million, an increase of 63.5%. As the number one mobile operator in Sri Lanka, MTN Networks has a subscriber base of 1.5 million and has just commenced its application for listing on the Colombo Stock Exchange.

MOVING FORWARD
On the current year’s outlook, Dato’ Abdul Wahid Omar, Group Chief Executive Officer of TM, commented: “We will continue to strengthen our financial position while we expect the environment to remain challenging. This view is based on the backdrop of a slowing global economy growth and the recent revision of Malaysia’s GDP forecast for 2005 to 5.4% from 5.7% by the MIER. Nevertheless, the services related sector is expected to remain firm with robust and intense performance in the telecommunications industry.”

The cellular segment will continue to be the main growth driver to TM. Celcom’s aggressive marketing and promotions has begun to pay off as Celcom recorded 8.5% growth in net customer addition of 452,000 during the 1st quarter, the highest since the merger. This brings Celcom’s total customer base to 5.79 million customers. With the introduction of Celcom 3G, we expect to see an uptake in new customer additions once the technology begins to take hold amongst the public. Celcom is the only 3G operator in Malaysia with the widest coverage. In addition to Klang Valley, other market centers covered include Melaka, Johor and Pulau Pinang, making the coverage widely available along the western belt of the country.

As for data, value-added services and broadband business, TM Net will focus on wireless broadband and WiMax, we see that the market is beginning to embrace these technologies. Changing lifestyles and the increasing sophistication of the Malaysian public augurs well for the growth in these sectors.

He also added: “We are pleased with the progress of our overseas investments. The impending IPO of MTN Networks augurs well for the company as it gives an opportunity of ownership to the Sri Lankan public. TM’s foray into Indonesia via PT Excelcomindo is expected to contribute positively to the Group’s earnings in the future. TM is also looking at further synergistic ties with countries in the OIC.

Barring unforeseen circumstances, the Board of Directors is confident that the Group’s performance for 2005 will continue to improve with the implementation of the various initiatives undertaken by the Group over the past few months including key management appointments, the recent VSS exercise, rebranding and our increasing regional investments.”

About TM
Telekom Malaysia Berhad (TM), a leading regional information and communications group, offers a comprehensive range of communication services and solutions in fixed-line, mobile, data and broadband. As one of the largest listed companies on Bursa Malaysia with an operating revenue of more than RM13 billion, TM is driven to deliver value to its stakeholders in a highly competitive environment.

The Group places emphasis on continuing customer service quality enhancements and innovations. Currently, with investments and operations in 13 countries around Asia and globally, TM is focused on sustainable growth in both the local and international markets.

For further information on TM, visit www.tm.com.my.

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