25 May 2023
TM Records a Promising 1Q2023 Performance with 2.0% Revenue Growth; Continues to Strengthen its Core Business
1Q2023 Key Highlights (vs 1Q2022)
· Operating Revenue grew 2.0% from RM2.89 billion to RM2.95 billion, with continuous growth across Unifi and TM Global
· EBIT decreased 15.5% from RM560.4 million to RM473.3 million, following accelerated depreciation and impairment
· PATAMI lower 2.9% from RM339.9 million to RM330.1 million, lower EBIT cushioned by lower net finance cost and effective tax rate
· CAPEX investment stood at 14.0% of revenue or RM413.1 million, heavily attributed to fibre network expansion
Amidst the challenges for the year, Telekom Malaysia Berhad (TM) achieved a steady and promising performance in the first quarter that ended on 31 March 2023, compared to the same period in the previous year (YoY).
Operating revenue grew 2.0% to RM2.95 billion, from RM2.89 billion in 2022, driven by Unifi and TM Global. TM saw an increase in customers with Unifi now serving close to 3.5 million home and MSME customers, TM One catering to 8,800 businesses, and TM Global serving more than 700 local and regional customers.
Its reported Earnings Before Interest and Tax (EBIT) is lower 15.5% to RM473.3 million, from RM560.4 million, following the Group’s decision to accelerate depreciation and impairment of IT assets, due to changes in market conditions.
Profit After Tax and Minority Interest (PATAMI) decreased 2.9% to RM330.1 million from RM339.9 million. Lower net finance cost and lower effective tax rate from the recognition of deferred tax assets mitigated the impact of the lower EBIT on the Group’s overall profitability.
Capital Expenditure (CAPEX) stood at 14.0% of overall revenue, or RM413.1 million. A significant portion of this investment was dedicated to fortifying its fibre infrastructure, delivering new customer acquisition, international subsea cables investment and 5G fibre network deployment to meet Government’s target of 80% coverage by year end.
Unifi sustaining growth trajectory
Unifi continues to deliver leadership in convergence service and solutions for both home and MSMEs customers. Unifi reported a 1Q2023 revenue growth of 4.3% from RM1.38 billion to RM1.44 billion contributed by both, growth in number of subscribers and average revenue per customer (ARPC).
Unifi fixed broadband subscription increased by 8.1% to 3.08 million propelled by aggressive sales, and promotions such as the 6-months complimentary speed upgrade offered to existing Unifi Home users and 7-days free viewing of all Unifi TV channels during Chinese New Year.
Unifi Mobile unveiled its latest offerings, the UNI5G prepaid and postpaid plans, which include complimentary 5G access for all current mobile subscribers. Additionally, Unifi introduced the Pakej Perpaduan Jalur Lebar Tetap (Home Internet) and Pakej Perpaduan Prabayar Mudah Alih (Prepaid Mobile) plans specifically designed for underserved communities, providing inclusive and ubiquitous connectivity for the community.
Unifi Business’ collaborative efforts with local government agencies have been instrumental in supporting MSMEs to digitally grow their businesses. As part of this initiative, Unifi Business launched a programme in Sabah that has resulted in a significant participation of local entrepreneurs.
TM One navigating challenging market and shifting demand
TM One recorded a 6.7% slowdown in revenue from RM773.7 million to RM721.9 million in the current quarter, largely due to the impact of price reduction and lower revenue from one-off customer projects.
The delivery of key projects across several industries shall set the pace for TM One in the coming quarters. TM One delivered a Private 5G solution to enable Smart Industry solutions and completed a hybrid cloud project that is instrumental to the IT backbone transformation of its customer. TM is also the only telco with a 100% completion record for the Point of Presence (POP) Phase 1 Project, successfully delivering 233 sites across the northern states, Sabah and Sarawak.
Building on the success of TM One 5G Sphere Partner Programme launched end of 2022 where more than 90 leading partners are registered today, TM One launched its Sandbox platform providing a secure and controlled environment for enterprise and Government customers with technology partners to co-create and commercialise innovative smart service solutions, which will propel their digitalisation and automation drive.
TM Global catalysing digital inclusivity
TM Global reported continuous growth in 1Q2023, with revenue increasing by 3.9% from RM625.1 million to RM649.2 million, contributed by higher data and data centre co-location services.
As the leading partner for High-Speed Broadband Access (HSBA), TM Global achieved the highest number of new installations in March, supporting collective industry growth throughout Malaysia. Additionally, close to 8,000 4G and 5G fiberisation site were deployed to meet the growing demands of industry players and enhance nationwide edge capabilities, further propelling national digital initiatives.
Internationally, TM Global secured deals from US-based hyperscaler and North Asia digital provider for its wholesale data centre solutions as well as a substantial deal from ASEAN telecommunication player for more than 10Tbps data requirement within this region. TM Global remains focused on positioning Malaysia as the preferred digital hub for the ASEAN region through its comprehensive and customised offerings for hyperscalers, global carriers and digital players.
Commentary and Outlook from Dato’ Imri Mokhtar, TM Group Chief Executive Officer
“2023 is expected to be a challenging year with changes in the regulatory landscape, heightened competition and other market structure changes. TM will continue strengthening its core business to be commercially sustainable as a Public Listed Company (PLC) whilst continuing to contribute to the nation’s growth via its role as a Government Linked Company (GLC).
“As the national connectivity and digital infrastructure provider, TM will continue to execute the fiberisation plan to support the Government’s National Digital Network (JENDELA) programmes as well as the 5G rollout nationwide. TM looks forward to continue playing an active role in the 5G implementation, leveraging its nationwide fibre infrastructure, extensive digital platforms (data centres, edge nodes) and rollout experience.
“We remain steadfast as we enter the final year of our 2021-2023 Transformation Programme, and pursue the next wave of growth beyond 2023. In line with our journey to become a human-centred TechCo, we announced the launch of TM’s new HQ and Campus, located in Cyberjaya. The campus will serve as a catalyst for a new way of working that drives agility and flexibility through digital collaboration and hybrid work environment, propelling innovation among our employees, customers and partners.
“We will continue to advocate sustainability efforts and strive for progress. TM has released our first Task Force on Climate-related Financial Disclosures (TCFD) report, 2 years ahead of Bursa Malaysia’s 2025 requirement. The report focuses on increasing transparency around the financial implications of an organisations’ climate-related risks and opportunities.
“Though cautious with the overall outlook, we remain optimistic with the prospects of increased hyperconnectivity, continuous growth investments in connectivity and digitalisation across all customer segments. TM will continue to enable a Digital Malaysia by offering comprehensive suite of communication services and digital solutions benefitting communities, businesses and Government.”
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TM and Tata Communications join forces for IP Transit services in ASEAN
Telekom Malaysia Berhad (TM), the national connectivity and digital infrastructure provider through its global and wholesale arm, TM WHOLESALE and Tata Communications, a global digital ecosystem enabler’s wholly-owned subsidiary, Tata Communications International Pte Ltd., join forces to offer stable, high-speed and reliable connectivity in the ASEAN region and open access to global enterprises. This collaboration will enable service providers, mobile network operators and internet service providers in the region to address their customers’ growing data connectivity needs by providing access to a global Tier 1 Internet Protocol (IP) network. This will help deliver reliable, stable Tier-1 IP Transit (IPT) service, an internet connectivity service that enables end-users to access all websites and content on the internet. This will further boost sectors such as e-commerce, online entertainment, retail, online banking and delivery services that have accelerated in recent times. As part of this arrangement, Tata Communications expands its IPT service coverage leveraging TM’s data centre, extensive connectivity and network infrastructure in Malaysia. This collaboration will also enable Tata Communications to optimise TM’s reachability within the ASEAN region through terrestrial networks and submarine cables to the neighbouring countries. The submarine cables include the Malaysia-Cambodia-Thailand submarine cable for connectivity to Indochina and, Nusantara Gateway submarine cable for connectivity to Indonesia. At the same time, TM will benefit from Tata Communications global Tier-1 IP network to serve customers in more than 190 countries and territories hence further extending TM’s IP transit coverage and enhances its regional TMiX offering. Commenting on the collaboration, Amar Huzaimi Md Deris, Executive Vice President of TM WHOLESALE, stated, “We are delighted to work with a renowned global player like Tata Communications, to fulfil our role as the digital infrastructure accelerator in Malaysia. This is part of our effort to enhance our internet service performance with expanded global reach for service providers in Malaysia and neighbouring countries to meet the growing IP networks requirements. The collaboration underscores our commitment to our customers for delivering world class network service, brings us one step further to achieve our aspiration as the trusted digital hub in the ASEAN region. It also signifies our commitment to support the Malaysia Digital Economy Blueprint (MyDIGITAL) initiative towards enabling Digital Malaysia.” Sumeet Walia, Chief Sales and Marketing Officer, Tata Communications, said, “The service provider ecosystem across the ASEAN region will benefit from our joining forces with TM and enabling access to a Tier-1 internet provider transit connectivity that provides scale and a fillip to boosting the economy. By offering high-capacity and low-latency IP transit services to and from Malaysia for both our customers, we bring forth synergies for a more robust, secure and flexible IP platform.”
TM Future Skills Programme continues with a project based learning e-showcase event
Two (2) schools participated in E-Showcase PBL-TM Future Skills 2020, the highlight of a 3-month online learning programme for teachers and students of the schools Telekom Malaysia Berhad (TM) continues its efforts to equip the younger generation with Industrial Revolution 4.0 (IR4.0)-centric knowledge through initiatives under its TM Future Skills programme. Most recently, students from Sekolah Jenis Kebangsaan Cina (SJKC) Jalan Davidson, Kuala Lumpur and SJKC Tsun Jin, Kuala Lumpur demonstrated their talents in 3D programming and printing skills in a two (2)-days online event held in collaboration with Bangsar / Pudu District Education Office (PPDBP). The event, titled E-Showcase Project Based Learning (PBL)-TM Future Skills 2020, saw the participation of 60 teachers and students from both schools. The students showcased their 3D innovation projects and at the same time, shared and displayed their knowledge and skills in Science, Technology, Engineering and Mathematics (STEM) subjects. Izlyn Ramli, Vice President, Group Brand and Communication, TM, said: “We are delighted with the schools’ acceptance and active participation in the TM Future Skills Programme. Our Corporate Social Responsibility (CSR) programmes under the education pillar are always aimed at supporting the nation’s education system towards preparing not only the students, but also the teachers and society at large, with IR4.0 skills. We hope this programme will help to enhance the students' future skills and increase their interest in STEM subjects. This befits our role as a responsible nation builder where we will continue to serve and enable Digital Malaysia through innovative and inclusive digital solutions.” Teah Lay Theng, Headmistress of SJKC Jalan Davidson, said: “The PBL approach was chosen for the programme as it can bring out the most from the students in terms of innovation and creativity. The use of digital equipment is also able to improve the digital skills and competencies of our students in producing the innovations.” Meanwhile, Ng Mooi Hong, Headmistress of SJKC Tsun Jin, said: “In the current pandemic environment, teachers need to be creative in imparting knowledge and running the programmes that can develop the potential of our students. With this programme, we hope to inoculate the interest, highlight the potentials and empower the students with STEM subjects.” The E-Showcase PBL-TM Future Skills 2020 was the highlight of three (3) months long online learning programme for teachers and students of the two (2) schools. Throughout the programme, the teachers and students from both schools learned about digital technology in TM 3Ducation – the 3D printing module to be implemented in their PBL. Due to the ongoing pandemic Covid-19, TM’s strategic partner for TM Future Skills, Creative Minds, conducted the training sessions for all the teachers and students, including parents, through an online platform. Not being in class physically following the closure of schools nationwide has also not deterred these young innovators. They persevered in conducting research and continued to experiment and collaborated with each other virtually for the past 3 months. At the same time, School Improvement Specialist Coach (SISC+) from PPDBP closely supervised the activities and monitored the progress of the participants. Streamed live via YouTube, the E-Showcase garnered more than 6,000 viewers throughout the 2-day event and the channel has cumulated more than 7,800 views to date. The panel of judges for the E-Showcase consisted of SISC+ from PPDBP and led by Izad Ismail, Head of Corporate Responsibility, TM. TM Future Skills programme is an initiative that aims to empower students by equipping them and teachers with IR4.0-centric kits and knowledge, such as the TM 3Ducation – 3D printing module and the TM Nano Maker, a real-time data logging tool for STEM. This is to prepare them to be part of a digital-ready community and future-proof workforce which has always been one of the pillars under TM’s Digital Malaysia aspiration. As a key enabler of this, TM has always been an avid supporter of innovation and technology in Education. Through programmes like TM Future Skills, the Company endeavours to empower the leaders of tomorrow with relevant skills in innovation and technology towards serving a more digital society and lifestyle, digital businesses and industry verticals, as well as digital Government. For more information on the Company's other Corporate Responsibility initiatives, visit www.tm.com.my.
TM STATEMENT ON BUDGET 2025
TM welcomes the Government’s Budget 2025 announcement, themed “Ekonomi MADANI: Negara Makmur, Rakyat Sejahtera”, and applauds its continued focus on economic reform and uplifting the well-being of the rakyat. In line with these goals, TM is committed to playing a key role in the nation’s digitalisation journey, ensuring that technological advancements contribute to sustainable and inclusive growth that benefits businesses, MSMEs, communities, and the public sector. In line with Budget 2025’s priorities, TM continues to support digital inclusivity by collaborating with the relevant Ministries and Government agencies to enhance high-speed internet access for underserved areas and improve the quality of digital services in various industries such as education and healthcare. TM also remains dedicated to nurturing the nation’s digital talent by integrating crucial skills such as AI, IoT, cybersecurity, and cloud computing into education and training programmes through our Multimedia University (MMU) and collaborations with TVET institutions. As a trusted partner of over 400,000 MSMEs, TM supports the Government’s ongoing initiatives to strengthen this key segment through various financial initiatives. We will continue providing customised digital solutions and empower MSMEs to thrive in the digital economy. As we progress towards becoming a Digital Powerhouse by 2030, TM is well-positioned to drive Malaysia’s digital transformation. Our key investments in digital infrastructures, talent development, and sustainability will fuel the nation’s long-term growth, reinforcing Malaysia’s position as a digital hub for the ASEAN region.
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