TM RECORDS HIGHER 1ST QUARTER REVENUE OF RM2,005.9 MILLION

Retail revenue continued to improve,
contributing 80.4% of overall revenue
Group’s broadband customers reached 1.4 million

Telekom Malaysia Berhad (TM), Malaysia’s leading next generation communications provider and broadband champion, today announced its financial results for the first quarter ended 31 March 2008. The financial results reflect TM’s performance excluding contribution from TM International Berhad and Celcom (M) Berhad arising from the demerger of the Group that was completed on 25 April 2008. On a proforma basis, TM posted a revenue of RM2,005.9 million for the first quarter ended 31 March 2008, an increase of 2.4% from RM1,958.8 million recorded in the same period last year. This was primarily contributed by broadband and data services which registered a growth of 25.6%. TM’s broadband customers increased to 1.4 million from 0.9 million recorded in the corresponding period last year.

TM registered an Earnings Before Tax, Interest and Depreciation (EBITDA) of RM611.5 million as compared to RM948.6 million recorded in the first quarter 2007. EBITDA was affected by one-off charges such as allowance for doubtful debts of RM117.8 million for certain foreign VoIP debtors and Employee Share Option Scheme (ESOS) cost of RM60.6 million. Excluding the one off charges, the normalised EBITDA for 1Q 2008 was RM832.7 million with margin of 41.0%.

As a result of the decline in EBITDA, correspondingly Profit After Tax and Minority Interest (PATAMI) decreased to RM114.4 million as compared to RM246.1 million in first quarter 2007. Excluding the one-off charges, normalised PATAMI for the current quarter was RM253.3 million.

Speaking at the media briefing, Dato’ Zamzamzairani Mohd Isa, Group Chief Executive Officer, TM, said, “Our retail business continued to register a positive momentum with a 3.9% revenue increase from the corresponding period last year. Retail revenue comprising key growth line of businesses, broadband and data, accounted for 80.4% of the overall revenue. We have pushed forward with continued commitment to our Performance Improvement Program (PIP) efforts. For example, we are pleased with the strong broadband growth and current positive momentum we experience in the enterprise segment. In addition, we are also happy to note that TM’s retail business successfully mitigated the decline in voice revenue, slowing the decline to 5.2% as compared to 9.8% in the first quarter of 2007”.

TM’s revenue composition is as follows:

Dato’ Zamzamzairani added, “We realise that while our line of businesses continue to show growth, at the same time, we also need to manage our cost efficiently in particular credit management and direct costs. Collection and reducing Receivables is now one of the key KPI of our sales team. The demerger objective is to accelerate operational improvement and growth efforts through performance transparency, organisational focus and improved execution capacity. Moving forward, we are prioritising several initiatives to improve our performance across the areas of revenue growth, cost and capital management. This includes among others, growing our broadband and enterprise market, manage working capital and procurement activities more effectively and accelerate monetisation of non-core assets.”

HIGH SPEED BROADBAND PROJECT (HSBB)

The Government has announced that TM will participate in the Public-Private Partnership (PPP) arrangement to roll out HSBB infrastructure and services. The cost of the HSBB investment for Phase 1 is approximately RM11.3 billion with TM investing RM8.9 billion over the next 10 years. The Government will be co-investing RM2.4 billion or one fifth of the total cost over a period of three years. The HSBB coverage is expected to be available across 1.3 million premises. TM will play its role in contributing towards creating an industry ecosystem for the country.

The signing of the agreement between the Government and TM is expected to take place in June 2008.

MOVING FORWARD

With the completion of the demerger exercise between the mobile and fixed-line businesses, TM will intensify its focus on commercial and operational improvements in its broadband, data and fixed-line voice services.

Customer service will remain as one of the main priorities. We are committed to our customers to continue offering creativity and innovation in our products and services and at the same time improving service delivery at our distribution and retail outlets, and contact centre outlets.

TM envisages that its broadband and data services will continue to enjoy a healthy growth. Managing costs remains a challenge in the near term, with a need to accelerate efforts to address operational efficiencies. Additionally, efforts are currently being geared towards the implementation of the High Speed Broadband (HSBB) network, which will enhance public service delivery and consumer lifestyles, and improve the competitiveness of Malaysian enterprises. HSBB will be an important engine for national growth and TM and the industry are set to benefit from it.

Barring any unforeseen circumstances, the Board of Directors expects TM’s performance for the financial year ending 31 December 2008 to remain favourable.

About TM

Telekom Malaysia Berhad (TM), Malaysia’s leading integrated information and communications group, offers a comprehensive range of communication services and solutions in broadband, data and fixed-line. As a market leader in the broadband and fixed-line businesses, 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.

With its extensive global connectivity, TM is poised to position Malaysia as a regional Internet hub and digital gateway for South-East Asia. In line with this, TM is evolving into a Next Generation Network service provider enabling the Group to enhance its efficiency and productivity while providing enriched products and services.

On the Corporate Social Responsibility (CSR) front, the Group has always been a major corporate contributor towards responsible activities in the belief that these practices are a fundamental tenet of good corporate governance. The Group promotes 3 major platforms i.e. education, sports development and community/nation-building. Under education, TM has spent some RM800 million to develop Multimedia University into one of the top universities in Malaysia with more than 20,000 students. TM has also provided scholarships to over 10,000 graduates pursuing academic programmes locally and overseas. On the sports front, TM is actively contributing towards the upliftment of football at all levels while under the community/nation-building platform, the Group contributes towards causes that bring value to the community and nation at large.

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

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