Philip Capital Research said TM Global – TM’s wholesale connectivity unit – is expected to benefit from year-end project deliveries.
PETALING JAYA: Telekom Malaysia Bhd
(TM) is expected to report lower earnings for the fourth quarter ended Dec 31, 2025 (4Q25), even as growth from its TM Global and TM One segments provides some cushion.
Philip Capital Research forecast TM’s 4Q25 core net profit to fall quarter-on-quarter (q-o-q) to between RM500mil and RM550mil, compared with RM691mil in 3Q25 and RM511mil in 4Q24, as the effective tax rate normalises.
The research house noted that 3Q25 profits were boosted by a much lower tax rate of 4.5%, compared with TM’s historical 25% to 30% range.
On the segment level, Philip Capital Research said TM Global – TM’s wholesale connectivity unit – is expected to benefit from year-end project deliveries.
It said domestic connectivity remained the main growth driver for the segment, supporting around 80% of revenue through 4G/5G backhaul and high-speed broadband access, with the balance coming from indefeasible right of use (IRU) contracts, submarine cables, and hyperscaler data centre (DC) services.
The research house noted that IRU revenue has moderated as existing subsea cables reach high utilisation, prompting TM to prioritise new cable projects to create sellable capacity for future demand.
It added that TM has guided that the South-East Asia–Middle East–Western Europe Six submarine cable system has experienced delays amid the Middle East blockade, while the Asia Link Cable remains on track for completion in 2026.
Philip Capital Research expected TM Global revenue to grow 2.3% to 3.6% year-on-year (y-o-y) from 2025 to 2027, supported by continued domestic network expansion, in line with the 13th Malaysia Plan’s objective to achieve 98% 5G coverage across populated, industrial, and rural areas by 2030.
As for its business-to-business arm serving enterprises, TM One, the research house saw a modest q-o-q gain, reflecting continued traction in beyond-connectivity offerings, including cybersecurity and cloud-adjacent services.
“TM One’s contribution is expected to remain stable on the back of recurring enterprise contracts, while TM Global benefits from backhaul and subsea infrastructure expansion, supporting demand for cross-border connectivity and DC interconnectivity,” it said.
In contrast, the research house expected revenue from TM’s consumer segment, Unifi, which makes up almost half of its revenue, to stay largely flat due to slower subscriber growth and stiff competition.
It noted that Unifi’s average revenue per user (Arpu) stabilised at RM130 in 3Q25 after falling to RM127 and RM125 in 1Q25 and 2Q25 respectively, supported by subscribers upgrading to higher-value plans amid ongoing promotions and convergence plans.
“While near-term upside to Unifi Arpu is limited, TM’s strong positioning in the fibre broadband market should continue to support subscriber growth, with net adds estimated at 50,000 to 60,000 annually from 2025 to 2027,” the research house noted.
