KUALA LUMPUR: Public Invest Research is retaining its Underperform for Telekom Malaysia with a target price of RM6.20 on concerns about more resources being poured into its new digital mobile plan via Webe.
It said on Wednesday this move could potentially put a dent into Telekom’s bottomline and cash reserves.
Telekom had on Tuesday officially launched Webe, its mobility arm to complement its existing fixed broadband and convergence business.
The research house said the Webe brand was revealed on April 13 and went live on June 30.
In terms of service, it is the only one offering a single postpaid plan that gives unlimited calls, SMS and data at RM199 a month.
However, Webe is still only available as an invite-only service for existing TM/Webe (formerly P1) customers.
“Currently, Webe runs on 4G LTE at 850MHz and we understand that it will gradually roll out more sites by setting up more base stations. For areas with no coverage, Webe will tap onto Celcom’s 2G/3G network as part of their network sharing agreement.
“Telekom’s venture into the mobile market should only benefit the group in the long run once Webe starts generating positive earnings, perhaps in three years’ time.
“In the immediate term, we expect TM to plough in more resources into Webe that could potentially put a dent on its bottomline and cash reserves. We maintain our Underperform call on Telekom,” said Public Invest Research.
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