KUALA LUMPUR: PublicInvestment Research is not overly concerned with talks of Broadnet Networks creating new competition in the broadband segment for Telekom Malaysia.
"On talks that a new player, Broadnet, would build fixed broadband network infrastructure alongside TM’s existing High-speed Broadband (HSBB), we don’t see a compelling business case for it unless it is able to provide last-mile connection and secure sufficient funding," it said.
The research house also said TM's venture with Tenaga Nasional would result in greater cost synergies in achieving the Nationwide Fiberisation Plan.
"However, we are not too optimistic with the offtake as it requires a costly one-off charge of RM599 on hardware.
"Generally, we are positive on this partnership as we believe it is the most cost-effective way to fiberize the country."
It added that TM's mobile business would take time to grow and generate positive returns.
"Unifi Mobile is not expected to deliver any positive earnings stream in the near future as the first 1m cards were given out for free in order to secure new customer base for the new product.
"We believe that the group’s profit margin may feel the pinch of escalating cost as it attempts to grow the mobile business., said PublicInvest Research.
The research house also believes TM's bid for the 700MHz spectrum, if successful, would help to expand and improve the quality of its LTE network going forward.
PublicInvest Research maintained its neutral rating on TM with an unchanged target price of RM6.
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