TM ANNOUNCES ITS HEADLINE KEY PERFORMANCE INDICATORS

Telekom Malaysia Berhad’s (TM) transformation is progressing well and the Company is set to move on to the second phase of the GLC transformation programme which focuses on generating momentum from the initiatives implemented earlier. To this end, TM today announced its 3 headline Key Performance Indicators (KPIs) for the financial year 2006. The 3 headline KPIs, representing the Company’s main corporate targets are:

* Excludes non-operational item i.e. Dete Asia claim
** ROCE defined as EBIT / Average capital employed

The 3 headline KPIs announced have taken into account the changing dynamics of both local and overseas business environment in the telecommunication industry. It also demonstrate the Group’s commitment to challenge and improve itself further as these targets are stretched when benchmarked against other multi-services peers in the telecommunication industry.

Commenting on TM’s 3 headline KPIs for 2006, Dato’ Abdul Wahid Omar, Group Chief Executive Officer, TM said, “Commitment to these short term targets is crucial in driving the Group in the next phase of GLC transformation programme. The next step in the medium term is to complete our presence, subject to acceptable investment opportunities, in other parts of South & South East Asia in the next 3 years. Earnings growth may be limited in the initial years as the newly acquired entities are expected to be earnings dilutive in the first year of acquisition. Execution of strategies and initiatives in our countries of presence shall also be our key focus to ensure positive returns on our investments and improved contribution from overseas operations. TM recently secured a critical piece in its regional presence with the acquisition of a 49% equity interest in Spice Communications Private Limited. TM now has strong presence in the Asia Pacific region, with investments in Sri Lanka, India, Bangladesh, Indonesia, Cambodia, Singapore and Pakistan, making it one of Asia’s leading regional player. Our aim is to take TM to the next level and transform TM into a true regional mobile operator.”

“On the home front we shall introduce innovative products and packages to improve utilization of fixed line services as well as grow data, broadband and its related services. In addition we aim to strengthen revenue and market share in the mobile segment with mobility solutions and 3G. Cost management throughout the Group will indeed be a main priority to improve margins moving forward. Group synergies will be leveraged upon to unlock better value not only for the customers but also for the Group. This medium term strategy shall be translated into targets and shared with the market from time to time.”

“As announced earlier, we wish to reiterate our commitment to our shareholders as reflected by further refinement of our dividend payout policy from between 20% to 50% of profit attributable to shareholders to 40% to 60% of profit attributable to shareholders. This is to ensure positive returns on investment to investors without sacrificing the Company's execution of expansion plans,” added Dato’ Abdul Wahid.

It is important to note that these headline KPIs are targets or aspirations set by the Company as a transparent performance management practice. They shall not be construed as either forecasts, projections or estimates of the company or representations of any future performance, occurrence or matter as the headlines are merely a set of targets/aspirations of future performance aligned to the Company’s strategy and which have been derived on the assumption that the Group shall operate under the current business environment.

Major challenges will include the continued intense competition in the cellular segment typified by price wars, change in consumer behaviour affecting the fixed line business and exposure to political, economic and regulatory changes in the various countries we operate.


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 12 countries around Asia and globally, TM is focused on achieving sustainable growth in both the local and international markets.

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


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