25 May 2023
TM Records a Promising 1Q2023 Performance with 2.0% Revenue Growth; Continues to Strengthen its Core Business
1Q2023 Key Highlights (vs 1Q2022)
· Operating Revenue grew 2.0% from RM2.89 billion to RM2.95 billion, with continuous growth across Unifi and TM Global
· EBIT decreased 15.5% from RM560.4 million to RM473.3 million, following accelerated depreciation and impairment
· PATAMI lower 2.9% from RM339.9 million to RM330.1 million, lower EBIT cushioned by lower net finance cost and effective tax rate
· CAPEX investment stood at 14.0% of revenue or RM413.1 million, heavily attributed to fibre network expansion
Amidst the challenges for the year, Telekom Malaysia Berhad (TM) achieved a steady and promising performance in the first quarter that ended on 31 March 2023, compared to the same period in the previous year (YoY).
Operating revenue grew 2.0% to RM2.95 billion, from RM2.89 billion in 2022, driven by Unifi and TM Global. TM saw an increase in customers with Unifi now serving close to 3.5 million home and MSME customers, TM One catering to 8,800 businesses, and TM Global serving more than 700 local and regional customers.
Its reported Earnings Before Interest and Tax (EBIT) is lower 15.5% to RM473.3 million, from RM560.4 million, following the Group’s decision to accelerate depreciation and impairment of IT assets, due to changes in market conditions.
Profit After Tax and Minority Interest (PATAMI) decreased 2.9% to RM330.1 million from RM339.9 million. Lower net finance cost and lower effective tax rate from the recognition of deferred tax assets mitigated the impact of the lower EBIT on the Group’s overall profitability.
Capital Expenditure (CAPEX) stood at 14.0% of overall revenue, or RM413.1 million. A significant portion of this investment was dedicated to fortifying its fibre infrastructure, delivering new customer acquisition, international subsea cables investment and 5G fibre network deployment to meet Government’s target of 80% coverage by year end.
Unifi sustaining growth trajectory
Unifi continues to deliver leadership in convergence service and solutions for both home and MSMEs customers. Unifi reported a 1Q2023 revenue growth of 4.3% from RM1.38 billion to RM1.44 billion contributed by both, growth in number of subscribers and average revenue per customer (ARPC).
Unifi fixed broadband subscription increased by 8.1% to 3.08 million propelled by aggressive sales, and promotions such as the 6-months complimentary speed upgrade offered to existing Unifi Home users and 7-days free viewing of all Unifi TV channels during Chinese New Year.
Unifi Mobile unveiled its latest offerings, the UNI5G prepaid and postpaid plans, which include complimentary 5G access for all current mobile subscribers. Additionally, Unifi introduced the Pakej Perpaduan Jalur Lebar Tetap (Home Internet) and Pakej Perpaduan Prabayar Mudah Alih (Prepaid Mobile) plans specifically designed for underserved communities, providing inclusive and ubiquitous connectivity for the community.
Unifi Business’ collaborative efforts with local government agencies have been instrumental in supporting MSMEs to digitally grow their businesses. As part of this initiative, Unifi Business launched a programme in Sabah that has resulted in a significant participation of local entrepreneurs.
TM One navigating challenging market and shifting demand
TM One recorded a 6.7% slowdown in revenue from RM773.7 million to RM721.9 million in the current quarter, largely due to the impact of price reduction and lower revenue from one-off customer projects.
The delivery of key projects across several industries shall set the pace for TM One in the coming quarters. TM One delivered a Private 5G solution to enable Smart Industry solutions and completed a hybrid cloud project that is instrumental to the IT backbone transformation of its customer. TM is also the only telco with a 100% completion record for the Point of Presence (POP) Phase 1 Project, successfully delivering 233 sites across the northern states, Sabah and Sarawak.
Building on the success of TM One 5G Sphere Partner Programme launched end of 2022 where more than 90 leading partners are registered today, TM One launched its Sandbox platform providing a secure and controlled environment for enterprise and Government customers with technology partners to co-create and commercialise innovative smart service solutions, which will propel their digitalisation and automation drive.
TM Global catalysing digital inclusivity
TM Global reported continuous growth in 1Q2023, with revenue increasing by 3.9% from RM625.1 million to RM649.2 million, contributed by higher data and data centre co-location services.
As the leading partner for High-Speed Broadband Access (HSBA), TM Global achieved the highest number of new installations in March, supporting collective industry growth throughout Malaysia. Additionally, close to 8,000 4G and 5G fiberisation site were deployed to meet the growing demands of industry players and enhance nationwide edge capabilities, further propelling national digital initiatives.
Internationally, TM Global secured deals from US-based hyperscaler and North Asia digital provider for its wholesale data centre solutions as well as a substantial deal from ASEAN telecommunication player for more than 10Tbps data requirement within this region. TM Global remains focused on positioning Malaysia as the preferred digital hub for the ASEAN region through its comprehensive and customised offerings for hyperscalers, global carriers and digital players.
Commentary and Outlook from Dato’ Imri Mokhtar, TM Group Chief Executive Officer
“2023 is expected to be a challenging year with changes in the regulatory landscape, heightened competition and other market structure changes. TM will continue strengthening its core business to be commercially sustainable as a Public Listed Company (PLC) whilst continuing to contribute to the nation’s growth via its role as a Government Linked Company (GLC).
“As the national connectivity and digital infrastructure provider, TM will continue to execute the fiberisation plan to support the Government’s National Digital Network (JENDELA) programmes as well as the 5G rollout nationwide. TM looks forward to continue playing an active role in the 5G implementation, leveraging its nationwide fibre infrastructure, extensive digital platforms (data centres, edge nodes) and rollout experience.
“We remain steadfast as we enter the final year of our 2021-2023 Transformation Programme, and pursue the next wave of growth beyond 2023. In line with our journey to become a human-centred TechCo, we announced the launch of TM’s new HQ and Campus, located in Cyberjaya. The campus will serve as a catalyst for a new way of working that drives agility and flexibility through digital collaboration and hybrid work environment, propelling innovation among our employees, customers and partners.
“We will continue to advocate sustainability efforts and strive for progress. TM has released our first Task Force on Climate-related Financial Disclosures (TCFD) report, 2 years ahead of Bursa Malaysia’s 2025 requirement. The report focuses on increasing transparency around the financial implications of an organisations’ climate-related risks and opportunities.
“Though cautious with the overall outlook, we remain optimistic with the prospects of increased hyperconnectivity, continuous growth investments in connectivity and digitalisation across all customer segments. TM will continue to enable a Digital Malaysia by offering comprehensive suite of communication services and digital solutions benefitting communities, businesses and Government.”
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TM accorded special Kincentric COVID Resilience Award Malaysia 2020 for its efforts and proactive measures in combating Covid-19 pandemic
The Company received special recognition for its efforts and proactive measures in handling, mitigating and curbing the spread of COVID-19. Telekom Malaysia Berhad (TM) was recently awarded the Special Kincentric COVID Resilience Award Malaysia at the Kincentric Best Employers Malaysia 2020 Learning Conference and Award Ceremony which was held virtually. As the COVID-19 pandemic continues, people and organisations face unprecedented new challenges. The special awards recognise companies that have been actively managing the employee experience in the rapidly unfolding COVID-19 crisis; especially for those in critical functions ensuring business continuity and recovery. The judging criteria is based on key themes of Senior Leadership/communication, virtual work effectiveness, concern and engagement on employee wellness; supported by people practices. Badrul Hisham Ahmad, Vice President, Support Business TM who is also the Chairman of TM's COVID-19 Crisis Response Team (CRT) virtually received the award on behalf of TM. He was also one of the panelists in the sharing session among the winners of the COVID Resilience Award. Commenting on the achievement, Imri Mokhtar, Group Chief Executive Officer, TM said, "We are humbled and honoured to receive this meaningful award on behalf of all our Warga TM. In these challenging times, their dedication and commitment to serve our customers and the nation with essential connectivity have been exemplary. We would like to especially thank our COVID-19 Crisis Response Team and volunteers such as PAKAR Semboyan, TM Rovers, the 'buddies' and others behind the scenes; who have gone beyond the call of duty to ensure all are taken care of." "TM will continue to take proactive measures to curb the spread of COVID-19 for the safety of our employees, customers and stakeholders. We remain committed to help Malaysia rebuild its economy via connectivity and digital solutions. Together may we return stronger," he added. Kincentric, a Spencer Stuart Company through its Kincentric Best Employers programme gives high-performing organisations credit and visibility for the quality of their employer brand – and an edge in the talent marketplace. With 20 years of robust data on employee experience behind it, the programme measures and differentiates employers on the four (4) people-factors that are key to success, namely high employee engagement, agility, engaging leadership and talent focus. This year, Kincentric has introduced a special COVID Resilience Award to recognise organisations that have risen above and holistically supported their employees in managing the significant emotional, social and economic impact brought on by the pandemic. This award demonstrates how a great employee experience defines the ability for a business to survive and thrive, especially in critical moments.
TM One and MPSJ embarks on 5G demonstration project in Subang Jaya
Local communities set to experience ultimate 5G experience with smart solutions; in line with the aspiration to become a Vibrant City by 2030 TM One, the enterprise and public sector business solutions arm of Telekom Malaysia Berhad (TM) and Majlis Perbandaran Subang Jaya (MPSJ) today inked a Memorandum of Collaboration (MoC) for the deployment of three (3) 5G-enabled use cases, namely the Smart Traffic Light, Smart Parking and Smart Safety & Security solutions at SS15, in Subang Jaya as part of the 5G Demonstration Project (5GDP) undertaken by the Malaysian Communication and Multimedia Commission (MCMC). The MoC was signed by Ahmad Taufek Omar, Executive Vice President / Chief Executive Officer, TM One while MPSJ was represented by TPr. Hjh Noraini Roslan, Yang DiPertua, MPSJ. YAB Datuk Seri Amirudin Shari, Menteri Besar of Selangor together with Tuan Haji Rosli Man, Chairman, TM and Gerard Lim, Chief Digital Officer of MCMC witnessed the signing. Also present at the event were YB Michelle Ng, ADUN for Subang Jaya as well as representatives from the State Executive Council. Commenting on the collaboration, Tuan Haji Rosli said; "We are proud and excited to join forces with MPSJ in supporting MCMC's 5G Demonstration Project to deploy 5G infrastructure and services to Malaysians. The use cases that we are rolling out in all of our 5GDP locations are particularly selected to address the specific challenges faced by the community and stakeholders at the respective locations. For Subang Jaya, we have, together with MPSJ, identified prior to the project that parking, congestion and safety issues are among the community's top concerns. Today, TM and MPSJ are together in demonstrating how smart cities can be powered by 5G and Subang Jaya is indeed a perfect location to demonstrate these capabilities. We hope that throughout the 5GDP period, we will be able to show how 5G-enabled solutions can solve the challenges and create an Ultimate Smart City Experience for Subang Jaya, making it a smart city pioneer in Malaysia. This is in support of the Malaysian Communication and Multimedia Commission's (MCMC) efforts in progressing humanity towards improving the quality of lives of the Rakyat." "We hope as 5G becomes a reality, the communities will experience better streaming and connectivity and this will certainly bring a multitude of benefits to Subang Jaya city. Streets, buildings, public and personal devices need to be interconnected in order to manage the resources and operations in Subang Jaya. This can only be cost-effective and efficient if they are automated and connected and this is in line with MPSJ efforts to make Subang Jaya a safe, green, smart, prosperous, healthy and women-friendly municipality. MPSJ plans to install more than 100 high-tech CCTV cameras in the SS15 commercial area to monitor parking and traffic flow and under the proposed pilot project, the CCTVs would be equipped with enhanced technology and algorithms that could gauge the behaviour of motorists and alert MPSJ or the police if any urgent action is required," said TPr. Hjh Noraini. Noraini added that it is MPSJ's hope that this initiative and collaboration will realise MPSJ's aspiration to become a Smart City by 2030 and at the same time, support the Selangor state government vision towards making Selangor as the pioneer smart city by 2025. Through this partnership, TM One and MPSJ agree to jointly collaborate in the deployment of the 5G network with the rollout of the three (3) use cases, where the transmission of TM's 5G service and the use cases have been fully operational since November 2019. Both parties have also agreed to undertake joint marketing and promotion activities of the use cases in SS15, Subang Jaya for a duration of six (6) months. Ahmad Taufek added, "5G is the next-generation network that will serve as the enabling technology for the Internet of Things (IoT), leading to many transformative smart solutions such as the Smart City Solutions and beyond. TM, via our innovative and comprehensive products and solutions will continue to lay the foundation for Industrial Revolution 4.0 (IR4.0) and enabling IoT – to serve a more digital society and lifestyle, digital businesses and industry verticals, as well as digital Government. TM ONE as the enterprise and public sector business solutions arm of TM is committed to support the Group's role as the national telecommunications infrastructure provider of Malaysia's Digital Nation aspirations - that has established the communications backbone of Malaysia with the widest connectivity and convergence network." TM ONE's 5G-enabled Smart Traffic Light solution programmes traffic lights to respond to real-time, rich data collected by connected high-definition (HD) cameras and sensors, to enable improved traffic flow and reduces idle time at red lights. The Smart Parking solution enables real time parking bay monitoring using HD camera and Artificial Intelligence (AI), so users are able to search for vacant parking bay and navigate via path finder to reduce the time spent searching for the spot. Meanwhile, MPSJ enforcers can monitor parking occupancy and illegal parking incidents from the command centre and deploy resources more efficiently, thereby reducing traffic congestion at outdoor parking areas. The Smart Safety and Security solution provides advanced surveillance and real-time monitoring through video streaming from sensors and HD camera. Powered by AI capabilities, and integrated with TM's emergency response team, immediate action can be deployed in case of emergencies, as well as predictive analysis on actual incident situation for proactive response. Apart from the three use cases deployed in partnership with MPSJ, TM deploys three (3) other use cases through its research and development arm, TM R&D Sdn Bhd (TM R&D). Two (2) use cases - Smart Retail Analytics and Smart Water System are deployed at private commercial premises in SS15, Subang Jaya while Smart Vehicle will be implemented at TM Fleet in the area. Earlier last week, the Company announced that it has begun transmission of 5G service in Pulau Langkawi, where it is deploying the first 5G Stand Alone (SA) network, and will be demonstrating more 5G use cases there.
TM inks agreement with DNB to provide fibre connectivity in accelerating rollout of 5G network services nationwide
With a total contract value of RM2 billion over 10 years, the signing of a Fibre Leasing Service agreement with DNB demonstrates TM’s commitment to enable the provision of 5G infrastructure in supporting the Government’s ambitious digital aspiration Telekom Malaysia Berhad (TM) today announces the signing of a Fibre Leasing Service agreement with Digital Nasional Berhad (DNB) to speed up the deployment of the Government-owned 5G network nationwide. Taking on a leading role in enabling a Digital Malaysia, and as the national connectivity and digital infrastructure provider, TM is at the forefront of technology and innovation to support the country as it moves forward to realise a more digital society, digital business, digital industry and digital Government by 2030. The term sheet agreement with a total contract value of RM2 billion over 10 years was duly signed by Imri Mokhtar, Group Chief Executive Officer of TM and Amar Huzaimi Md Deris, Executive Vice President, TM Wholesale while DNB was represented by Augustus Ralph Marshall, Chief Executive Officer and Dushyanthan Vaithiyanathan, Chief Operating Officer. Commenting on the signing, Imri said: “Today’s signing further reinforces the Government’s aspiration of putting in place Malaysia’s digital infrastructure and network. We have always been a strong advocate of infrastructure sharing in providing connectivity services and end-to-end solutions, to enable excellent wireless solutions and services.” DNB will be able to leverage on TM’s extensive fibre and network infrastructure, and subscribe to TM’s 5G RAN-to-Edge Fronthaul and Backhaul solution for the provision of fibre connectivity, enabling DNB to provide 5G network services nationwide. Under the agreement, TM will provide DNB with 5G fibre leasing services for connectivity between DNB’s 5G mobile sites and nodes, leveraging on TM’s domestic fibre cable network spanning over 640,000 km across Malaysia. Prior to this, TM along with other fibre providers in Malaysia had participated in the 5G Fiber Leasing Request for Quotation (RFQ) exercise conducted by DNB in June 2021. “As DNB’s selected partner in implementing the Government’s 5G network rollout plan in Malaysia, the signing of this Fibre Agreement is testament to our advanced network technology and workforce capabilities in delivering fibre solutions throughout the country. Critical in executing this mission is to ensure our network is robust to support the future requirements of 5G and further fuel technological innovation in Malaysia,” Imri added. “In delivering the fibre connectivity for DNB’s 5G network, the local telecommunications vendors and suppliers’ ecosystem shall benefit too, in areas such as engineering services, supply of fibre, accessories, poles, manholes and premise equipment. Based on our current fibre implementation, we expect more than 70% of the work to involve and benefit bumiputera and local companies.” “TM is also excited to utilise DNB’s 5G network to provide 5G services and solutions to our home, SME, enterprise and public sector customers. With the launch of DNB 5G network services yesterday, we will be able to test the 5G network and offer services on a trial basis in selected areas across Kuala Lumpur, Putrajaya and Cyberjaya,” Imri concluded. Today’s signing is in tandem with the implementation of Jalinan Digital Negara’s (JENDELA) action plan and cements TM’s commitment of enabling Digital Malaysia through MyDIGITAL. It is also in support of the Government’s other digital plans encompassing digital connectivity (domestic fiberisation, international connectivity), digital infrastructure (cloud, data centre and cybersecurity) and digital talents (via Multimedia University and TM Digital Academy).
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