TM'S REVENUE UP 4.1% TO RM10.2 BILLION FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2005

OVERVIEW
EBITDA up 6.3% to RM4.7 billion
Group’s mobile customers surpassed 16 million
Higher Q3 2005 PATAMI of RM775.9 million

Telekom Malaysia Berhad (TM) today announced its unaudited financial results for the nine months ended 30 September 2005.

The Group posted a revenue of RM10.2 billion, an increase of 4.1% from RM9.8 billion registered for the corresponding period last year mainly due to higher contribution from the mobile and internet and multimedia segments. Its Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) grew by 6.3% to RM4.7 billion from RM4.4 billion achieved last year. The Group also registered a higher operating profit of RM1.8 billion, an increase of 8.7% from RM1.6 billion registered in the same period last year.

The total number of mobile customers for the Group has surpassed the 16 million mark to 16.6 million. Mobile customers from the Group’s international operations amounted to 10.3 million while the domestic mobile customers stood at 6.3 million. Broadband customers at 417,000 represented a growth of 85% from the corresponding period in 2004.

The Group’s nine months Profit After Tax and Minority Interest (PATAMI) however was lower by 11.9% to RM1.6 billion from RM1.8 billion recorded last year. This was due to the effect of the one-off VSS compensation payment in the first quarter of 2005 and the absence of gain on disposal and contribution from TM’s investment in Telkom South Africa (TSA) which was divested last year (these two items will continue to have its impact on the Group’s PATAMI for this year). The nine months ended 30 September 2005 included a gain on disposal and dilution of Dialog Telekom Ltd. (Dialog) totaling RM258.7 million and a net gain on dilution of RM84 million from PT Excelcomindo Pratama Tbk. (XL) arising from their respective IPO’s.

Q3 2005 on Q2 2005 For this quarter, revenue increased by 3.9% to RM3.5 billion as compared to RM3.3 billion recorded in the second quarter of 2005. EBITDA grew by 22% to RM1.7 billion from RM1.4 billion registered in the last quarter and PATAMI increased by 82.1% to RM775.9 million from RM426.1 million posted in the second quarter of 2005.

Q3 2005 ON Q3 2004 For the current quarter versus the corresponding quarter in 2004, revenue increased by 5.1% to RM3.5 billion as compared to RM3.26 billion recorded last year. EBITDA grew by 19.8% to RM1.7 billion from RM1.45 billion and PATAMI increased by more than 100% to RM775.9 million from RM330 million posted in the corresponding quarter of 2004.

Commenting on the results, Tan Sri Dato’ Ir. Md. Radzi Mansor, Chairman, TM said, “The 5-pronged strategies announced earlier have helped to put the Group in the right direction. Whilst our fixed line revenue continue to provide us with healthy and strong cash flow, our revenue growth is mainly driven by the strong performance of our ‘growth’ services with a year-on-year growth of 16.1% in mobile and 33.6% in internet and multimedia. At the same time, the Group has also diversified its earnings base with 10.8% of revenue contribution coming from our overseas investments.”

“On our overseas investments, I am happy to report that we are stepping up our effort to drive value from our existing and new investments. We know that we need to close the gap left by TSA. As reported earlier, Dialog, our mobile operation in Sri Lanka was successfully listed on the Colombo Stock Exchange last July. This is followed by XL’s IPO recently in September. We are optimistic that we will be able to benefit from the growth potential of these markets and see the impact reflected in our future results.”

SEGMENTAL PERFORMANCE
FIXED LINE
Consistent with continued migration from traditional fixed voice-only services to mobile and Voice Over IP (VOIP) services, revenue from the Group’s traditional fixed voice services was lower at 42% of the Group’s Revenue for the current period as compared to 46% of revenue in the corresponding period last year. For the current period, the traditional voice services contributed RM4.3 billion to the Group revenue as compared to RM4.5 billion in the corresponding period last year.

MOBILE
Celcom’s PBT up 57%

The Group’s mobile business, spearheaded by Celcom (Malaysia) Berhad (Celcom) continued to grow amidst the competitive operating environment. Celcom posted a Profit Before Tax of RM773.6 million for the current year to date, a jump of 57% from RM491.5 million recorded in the same period last year. EBITDA also improved by 8% to RM1.6 billion as compared to RM1.5 billion recorded in the same period last year.

Celcom registered a net addition of 203,000 customers in the third quarter of 2005 bringing its total customer base to 6.3 million. Prepaid customers accounted for 80% of Celcom’s total customer base while postpaid customers make up the remaining 20%. To date Celcom 3G customers stood at 15,000.

Celcom provides the largest network and the widest coverage in the country.

The overseas mobile operations continued to contribute significantly to the Group. Contribution was led by a 60% revenue growth of Dialog, TM’s mobile business in Sri Lanka, and 31% of TM International Bangladesh Limited (TMIB), TM mobile business in Bangladesh which carries the brand Aktel.

INTERNET AND MULTIMEDIA
Broadband customers at 417,000

Internet and multimedia business registered a strong year-on-year growth of 33.6%. This is reflected by its contribution to the Group revenue which grew by 66% to RM496.7 million from RM298.7 million recorded in the half-year of 2005. TM Net Sdn Bhd’s broadband customers, as compared to the first half of this year, increased to 417,000, a growth of 19% from 352,000 customers, whilst its dial-up customers increased to 2.048 million from 2.006 million.

TM Net maintains its leadership position by offering competitively priced products and services.

OVERSEAS INVESTMENTS
Overseas investments contributed 21.2% to Group PATAMI

TM’s overseas investment continued to contribute significantly to the Group revenue. For the nine months ended September 2005, TM’s overseas investment contributed 10.8% or RM1.1 billion to the Group revenue. PATAMI contribution was 21.2% or RM261.5 million to Group’s PATAMI.

MOVING FORWARD
On the outlook for the remaining of the year, Dato’ Abdul Wahid Omar, Group Chief Executive Officer, TM said: “As shown by our third quarter results, our growth is driven by mobile, data and internet and multimedia services. This is where the future is heading and therefore it is crucial that we intensify our efforts to meet the expectations in these areas. We will focus to grow our mobility solution and 3G services while at the same time aggressively rolling out broadband and its related services.”

“The fixed line business remains an important component of our revenue composition and we will mitigate the decline in fixed voice revenue and expand on data related services.”

“We have also made our presence felt in the telecommunications scene within the Asian region. Going forward, we need to further enhance the value from our international investments and continue improving our regional presence. With our recent acquisition of MobileOne in Singapore, TM can now further explore potential synergies and product innovation on a greater scale.”

“I am happy to note that we are on track in transforming TM into a leading telecommunications company in this region, at the fore front of technology and forward looking.”

“We expect the environment to remain challenging and very competitive. Barring unforeseen circumstances, the Board of Directors expects the Group’s performance for the remaining of 2005 to be satisfactory.”

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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