TM PRIVATISES VADS AS PART OF GROWTH PLAN

Telekom Malaysia Berhad (“TM” or “Company”) announced today the proposed privatisation of VADS Berhad (“VADS”). The move is in line with the Company’s strategy to drive growth through commercial excellence by optimising its portfolio of products and services, and sales channels. The privatisation of VADS will give TM the opportunity to streamline its businesses to maximise potential synergies and cost savings benefits, charting the path for further growth and earnings enhancement.

The organisational strategic and operational benefits are expected to be captured through the sharing of best practices and better pooling of resources and skills between VADS and TM. The Proposal is also expected to allow the TM Group to better serve its range of customers, particularly in the Enterprise segment. The privatisation of VADS will also eliminate any potential conflict of interest situation between TM and VADS.

Having signed the agreement with the Government of Malaysia on 16 September 2008 for the implementation of high speed broadband (“HSBB”) in Malaysia, TM is looking forward to play a significant role in the country’s information and communications technology (“ICT”) industry. HSBB implementation and the opportunity to optimise and grow VADS’ business augurs well for TM’s new aspiration to become Malaysia’s leading new generation communications provider.

The privatisation of VADS will be at a price of RM 7.60 per VADS share, which represents a premium of approximately 26% and 18% to the 3-month and 5-day volume weighted average price of VADS up to 19 September 2008, being the last trading day prior to the announcement on the privatisation. The highest ever traded price of VADS since its listing in 2002 was RM6.90, after adjusting for VADS’ previous share split exercise. The privatisation price of RM 7.60 per share represents a premium of 10.1% to the highest traded price. The total privatisation cost to TM will be approximately RM 417 million. The privatisation is expected to be carried out through a selective capital reduction and repayment exercise by VADS. Upon completion of the exercise, VADS will become a wholly-owned subsidiary of TM.

About TM

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 TM group of companies (“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. TM was awarded the prestigious STAR-BIZ ICRM Corporate Responsibility Award under the workplace category for 2008.

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

About VADS

VADS is one of Malaysia’s leading managed ICT Services provider. Having grown from its heritage as a joint venture between IBM Global Network Services and TM back in 1991, today VADS is a public listed company serving more than 500 medium to large businesses across various industries.

For further information on VADS, visit www.vads.com.my.

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