TM well-positioned to capture 5G connectivity

PETALING JAYA: Telekom Malaysia Bhd is confident that it is well-positioned to capture the high-speed 5G connectivity network, according to managing director and group chief executive officer Imri Mokhtar.

He said TM has more than 570,000km of fibre connectivity in Malaysia, which will ensure a fast and cost-effective rollout of the 5G infrastructure for the government.

“At the moment, the 5G programme is still new and preliminary. We hope to get better clarity and details.

“We believe that we are well-positioned to support the 5G rollout for the country, ” he told reporters after its financial year 2020 (FY20) results briefing.

Imri pointed out that TM would be spending more on capital expenditure this year to upgrade and expand its fibre network, as well as into cloud and cybersecurity improvements, which he said would be ready to “support the government’s special purpose vehicle (SPV) if required”.

The government had unveiled the 5G rollout plan under the Malaysia Digital Economy Blueprint last Friday in conjunction with the launch of the MyDigital agenda.

To spearhead the initiative, the government has established an SPV under the Finance Ministry to oversee the deployment of 5G infrastructure and network nationwide over a period of 10 years, involving an investment of RM15bil.

The network will be wholly-owned and maintained by the SPV, which will lease out capacity to operators to offer services.

In an interview with a financial weekly, Prime Minister Tan Sri Muhyiddin Yassin said the SPV would accelerate the 5G rollout and at a lower cost instead of leaving it to the telecommunications companies (telcos).

“We remain confident in bringing value to our customers and shareholders in 2021 and beyond.” - Imri Mokhtar“We remain confident in bringing value to our customers and shareholders in 2021 and beyond.” - Imri Mokhtar

Among the telco stocks, TM stands to benefit from the leasing of its fibre transmission network to the SPV for the 5G rollout, according to analysts.

For 2021, Imri said TM has allocated 14%vto 18% of its revenue for capex, which is higher than last year’s allocation of 13.7% of revenue.

“We expect that the company would record flat to single-digit growth in revenue this year, ” he said.

TM posted a net profit of RM259.44mil for its fourth quarter ended Dec 31,2020, from a net loss of RM51.09mil in the same period a year earlier due to lower operating costs and other gains.

This was despite the decline in its revenue for the quarter by 1.1% to RM3bil from RM3.03bil.

TM declared a final interim single-tier cash dividend of 7.5 sen, which brings the total dividend for FY20 to 14.3 sen – higher than the 10 sen in FY19.

For FY20, the telco’s net profit surged more than 60% to RM1.22bil due to lower tax charges and improvement in its subsidiaries.

However, its revenue for the year fell by 5.2% to RM10.84bil against RM11.43bil a year ago.

TM pointed out that its voice and other telecommunication related services were impacted by lower volume and restricted economic activities from the movement control order in general, affecting revenues from customer projects under the enterprise segments.“We are pleased to report a resilient overall business performance in 2020 as we navigated through the challenges of the pandemic and macroeconomic environment. These uncertainties have required us to change the way we work, becoming more efficient in execution and being more prudent in managing resources, ” it said.

Imri said the group is prepared for the next phase of its journey with the New TM Transformation Programme (2021-2023).

Moving forward, it reiterated its support for the MyDigital blueprint and other government’s stimulus plans and believed that such public and private collaboration would propel the country towards a full-fledged digital Malaysia by 2030.

“TM Group will be at the forefront in this new economy towards improving the quality of life of our customers and supporting nation-building programmes including MyDigital and other stimulus plans.

“We remain confident in bringing value to our customers and shareholders in 2021 and beyond, ” Imri added.

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