YoY basis, strong revenue growth from Internet, Data and Other related telecommunication services of 9.8%, 8.4% and 16.1% respectively helped mitigate the decline in Voice revenue

Broadband net additions jumped to 54K as compared to 28K and 33K in 3Q and 4Q 2009 respectively 

A strong growth from its Internet, Data and Other related telecommunication services helped pushed Telekom Malaysia Berhad’s (TM) revenue for 1Q 2010 to RM2,124.9 million, a 0.9% increase from RM2,105.4 million registered in 1Q 2009.  

Internet turned in a revenue of RM422.6 million in 1Q 2010, a growth of 9.8% from RM385.0 million recorded in 1Q 2009. Data and leased services revenue increased by 8.4% in 1Q 2010 to RM397.7 million compared to RM366.9 million in the same quarter 2009. While Other telecommunications services recorded a growth of 16.1% to RM296.7 million in the current quarter from RM255.5 million in 1Q 2009. The strong growth in these non voice revenue streams was however partially offset by lower voice revenue and international inpayment. 

Dato’ Zamzamzairani Mohd Isa, Group Chief Executive Officer, TM said, “Internet continued to be a strong revenue driver for TM. We have been aggressively introducing new and innovative products over the last 6 months, to cater for the ever changing demand pattern as well as competition from other players in the broadband space. The notable ones are Super Upgrade Deals and the Blockbuster Deals. The Super Upgrade Deals has so far registered about 55K existing broadband customers moving into higher internet speed packages while the Blockbuster Deals has 24K new customers. This gave us a good indication that existing customers are willing to upgrade themselves into faster speed internet access i.e. 1Mbps and above, to have a better broadband experience. With the availability of more online transactions by the public and private sectors, growing personal computers (PC) ownership as well as favorable incentives introduced by the government such as tax benefits and free netbooks for university students, the breakdown of our current subscribers will likely to change very soon. As a result, our total net additions for broadband jumped to 54K as compared to 28K and 33K in 3Q and 4Q 2009 respectively. As at end of March 2010, our customer base stood at 1.485 million.” 

TM however registered a lower Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for 1Q 2010 of RM715.3 million as compared to RM816.2 million in 1Q 2009. This was due to, among others, higher Advertising & Promotion expenses for product promotion and UniFi related activities, higher international outpayment due to increased in traffic minutes, higher ESOS and manpower cost following annual increment and higher headcount on rollout of UniFi, higher Supplies & Materials cost as a result of higher cable requirement for customer projects and higher prices, as well as higher customer premises equipments and parts cost in line with increased Internet installations. The EBITDA margin for 1Q 2010 of 33.2% remains in line with Key Performance Indicator (KPI) of 33.0% for 2010.  

Boosted by favourable foreign exchange currency translation and partly offset by lower interest income and higher taxation expense, TM’s profit after tax and minority interests (PATAMI) improved to RM242.9 million in 1Q 2010, from RM27.7 million registered in the corresponding quarter in 2009. This was mainly attributed to unrealised exchange gain on translation of foreign currency borrowings of RM166.6 million as compared to a loss of RM175.5 million in the same quarter in 2009. The lower interest income was mainly due to the absence of interest income from Axiata Group Berhad.   

Total Revenue by Products: 

 * Others include telecommunication related services and non-telecommunication related services 

Prospects for the Current Financial Year  

In its quest to become a next generation telecommunications company, TM has successfully launched its High Speed Broadband (HSBB) triple play comprising Voice, High-Speed Internet and IPTV called UniFi on 24 March 2010. UniFi is currently available in four exchange areas of Taman Tun Dr. Ismail, Bangsar, Subang Jaya and Shah Alam. UniFi has, since its launch, signed up over 2,400 customers. An additional 10,000 would-be customers have also registered their interest and are in line for service installation. 

TM is expected to gradually increase its UniFi service coverage to 22 exchange areas by end of July 2010 and to a total of 48 exchange areas by end 2010 for a total of 750,000 premises passed. UniFi roll-out will cover the Inner Klang Valley, Iskandar Malaysia (Nusajaya) and high-impact economic areas including key industrial zones throughout the country. TM is targeting 1.3 million premises passed by end 2012. 

As the leading fixed broadband player in the country, TM is set to benefit from the economic recovery especially in the broadband space. Penetration rate in the broadband market is still low at 34.2% of household as of end March 2010 which gives TM the opportunity to further enhance its leading role in the industry.   

The improvement in the domestic economy augurs well for TM. However, due to the intensely competitive telecommunication landscape and the lead time necessary to build the recently launched HSBB business, the Board of Directors expects TM’s business environment for the financial year ending 31 December 2010 to remain challenging.