Incumbent fixed operator, Telekom Malaysia Bhd's entry into 4G market may put more pressure on mobile phone operators.
KUALA LUMPUR: Telekom Malaysia Bhd
(TM) has allocated some 25-30% of its revenue for capital expenditure (capex) for this financial year ending Dec 31, 2016.
Group chief financial officer Datuk Bazlan Osman said the group had spent 21.4% of revenue on capex, at RM2.5bil, last year.
He said the peak of its capex investment would be in 2016 and 2017.
TM reported a net profit of RM700.28mil for the full-year ended Dec 31, 2015, about 15% lower than RM831.81mil recorded a year ago.
The communication service provider said this was primarily due to foreign exchange losses from borrowings due to the weaker ringgit against the US dollar.
However, revenue for the year was up 4.3% at RM11.722bil against RM11.235bil in 2014, on the back of higher contribution from all services. EBITDA (earnings before interest, taxes, depreciation and amortisation) was 1.6% higher year-on-year in 2015 at RM3.69bil.
Operating profit (EBIT) for 2015 was 2.9% lower at RM1.26bil due to the full-year consolidation of Packet One Networks (M) Sdn Bhd (P1). Excluding one-off items such as unrealised forex gains on international trade settlements, group normalised EBIT was RM1.24bil, representing a 10.6% decline from the previous year.
“2015 was a busy year for TM. Despite a challenging environment, our current business continues to grow. We maintained our position as the nation’s Broadband Champion; on track to become Malaysia’s true Convergence Champion. Last year, our total broadband customer base grew by 4.9% to 2.34 million customers, driven by UniFi. UniFi continues to see a healthy growth of 15.1%, with more than 839,000 customers as at December 2015,” said group CEO Tan Sri Zamzamzairani Mohd Isa in a statement.
Together with premises passed under High Speed Broadband Project Phase 2 (HSBB 2), TM now has a wider HSBB footprint of 1.89 million ports, with an overall take up rate of 44%.
Zamzamzairani noted that 56% of TM’s broadband customers are now on packages of 4Mbps and above. With the launch of the all new UniFi and the UniFi Advance package last October, 46% of its UniFi customers are now on packages of 10Mbps and above.
TM spent a total of RM2.51bil in capital expenditure in 2015, working out to 21.4% of revenue. Of the amount spent, 48% was for Access, 31% was for core network and 21% for support systems.
The group declared a second interim dividend of 12.1 sen per share, bringing the 2015 total dividend payout to 21.4 sen per share or RM804.2mil.
“Although 2015 was indeed a challenging year, TM was in active preparation for 2016, being the Year of Convergence for the TM Group, moving towards our entry into the mobility space. We will also be busy with further investments for growth, with the addition of our other projects, such as HSBB 2 and the Sub-Urban Broadband Project (SUBB). Both of these programmes are at an aggressive stage of rollout and we look forward to expanding our coverage of high quality broadband to more Malaysians.
“TM is also putting focus on our Managed Accounts segment; which we are re-branding as TM Business Solutions to the market, as an area of opportunity as we explore new capabilities and services to offer to our enterprise and public sector customers,” he said.
The company is also embarking on a digitalisation programme, which will involve transforming its processes as well as customer-facing activities into a more digital-based experience.
Zamzamzairani added that P1 is progressing well as the group’s mobile arm and centre of excellence for mobility with the development of TM’s overall LTE network roll-out being managed and planned for future growth.
Its core network will roll out nationwide starting with urban areas and adjacent to existing base stations.
“To date, we have also successfully completed user trials for broadband, voice and SMS services - to ensure effective delivery of mobile services towards the launch later this year. The user trials also include domestic roaming services and we have also secured outbound international roaming with a worldwide footprint, he added.
In December, TM signed the 10-year Public-Private Partnership agreement with the Government for the implementation of HSBB 2 and SUBB projects. Under HSBB 2, 95 additional exchanges will be HSBB ready providing access to 390,000 premises by 2017, while SUBB involves delivering high speed broadband access (up to 20Mbps through copper line upgrades and up to 100Mbps for areas deployed with Fibre-to-theHome technology).
TM signed two collaborations with regional Over-The-Top (OTT) to complement its HyppTV offering. “Our customers will now be able to enjoy access to the OTT content on multiple devices either via streaming or by downloading for offline viewing. We remain open for future collaboration with other OTT partners to suit the viewing behaviour demands of younger generations,” said Zamzamzairani.
Limited time offer:
Just RM5 per month.
