25 Apr 2018
Petronas and TM embark on cross-industry digital collaboration
Petroliam Nasional Berhad (PETRONAS) and Telekom Malaysia Berhad (TM) recently inked a Memorandum of Understanding (MoU) to collaborate on a strategic partnership that will see both companies provide significant benefits spanning multiple areas of co-operation.
This strategic partnership between PETRONAS and TM is aimed at implementing five clusters that would increase both companies’ operational excellence and enhance their customer experience, leveraging on each other’s strengths and shared values.
The collaboration would see the two companies working on increasing the adoption of PETRONAS products amongst TM employees, starting with PETRONAS Dagangan Berhad (PDB) extending its SMARTPay services to TM staff, which would allow cashless payments and increased operational efficiencies while providing significant savings on fuel costs each year for TM. Additionally, PDB and TM will be developing the next generation network infrastructure to enhance the former’s retail network and improve its customer service delivery at PDB stations.
PETRONAS will also collaborate with TM, via its information technology arm PETRONAS ICT, to explore data centre of the future. This would involve digitising PETRONAS’ data assets to improve data security as well as enhance user experience.
The partnership will also see PETRONAS and TM explore a smart park concept for KLCC. This initiative is aimed at not only improving the experience of patrons using the car park, but also increase the safety and security at the facility. PETRONAS and TM will also invest in a joint research covering areas concerning the oil and gas and telecommunications industries, such as building local competencies, knowledge exchange and the ‘Smart Helmet’ initiative, to encourage safety at the workplace.
PETRONAS President & Group Chief Executive Officer, Tan Sri Wan Zulkiflee Wan Ariffin, signed the MoU on behalf of PETRONAS while TM was represented by Dato' Sri Mohammed Shazalli Ramly, Group Chief Executive Officer, TM.
Speaking at the signing ceremony, Tan Sri Wan Zulkiflee emphasised that leading Malaysian companies must take the lead in working together and collaborating for greater success. “The opportunities are limitless – from solving current issues, providing support and services to co-creating and innovating future market offerings and solutions,” he said.
“Today’s signing marks the expansion of PETRONAS and TM’s existing working relationship. As we discover new ideas and strengthen our connections, I hope that this collaboration will not only provide benefits to PETRONAS and TM, but also to our industries, our customers and the nation. The whole of PETRONAS and I look forward in making this journey a success,” he added.
Commenting on the collaboration, TM’s Group CEO Dato' Sri Mohammed Shazalli Ramly said: “As the nation’s one and only company capable of providing the best connectivity and fully integrated telecommunications, ICT and smart services, TM, together with its business solutions arm, TM ONE, is proud to play its role as the strategic partner in establishing the ecosystem for PETRONAS’ digital transformation.”
“TM through TM ONE, the only enabler for businesses and public sector to realise full potential of their digital opportunities, is committed to deliver integrated business solutions that will fulfil the dynamic, sophisticated needs of business verticals including the oil and gas industry, especially in today’s digitally-connected environment.”
The joint collaboration involving TM and PDB, PETRONAS ICT, KLCC Property and Universiti Teknologi PETRONAS (UTP), sees the partners leveraging on each other’s strengths to create greater value and growth for the industry and Malaysia’s economy.
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TM reports operational improvement for 3Q2018 despite challenging environment
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TM’s core net profit, or Normalised PATAMI excluding non-operational items, stood at RM266.4 million, a 71.0% improvement sequentially. The total capital expenditure (CAPEX) investment for the first nine months of 2018 at RM1.32 billion, or 15.1% of revenue. This is within TM’s full year capex guidance of 19-20% of revenue. By asset type, access comprised 62% of total spending, followed by core network at 15% and the remaining 23% was for support systems. Imri Mokhtar, Acting Group Chief Executive Officer, TM said: “We continue to face various headwinds from competitive market dynamics. Nonetheless, we held revenue steady over the quarter, and saw our cost reduction initiatives bearing fruit, by recording improved operational performance for QoQ and YoY. However, in light of the continued pressure from industry and market challenges and its impact on our revenue thus far, we have taken a prudent view, by undertaking the impairment of our network assets – this resulted in close to a RM1.0 billion impairment loss this quarter.” “The operational improvement in 3Q2018 is testament to the Group’s commitment to the four (4) pillars of our Performance Improvement Programme (PIP 2018) - Revenue Uplift / Preservation, Sustained Profitability, Improved Cash Flow and Increased Productivity that will navigate us through these headwinds. We are rationalising our business, reducing operating costs and focusing our resources on the opportunities that will have the most impact,” Imri elaborated. “We currently have 2.29 million broadband customers and our unifi customer base continues to grow at 1.26 million as at end of 3Q2018 as compared to 1.06 million as at the end of the corresponding quarter last year. In terms of convergence, we saw more customers moving up the value chain with having triple-play services and above, evidenced by our convergence penetration now at 48% of TM’s household penetration compared with 39% this time last year,” he added. “We will continue to strengthen our products and services portfolio and we are stepping up how we aggressively compete in the market, with greater sales and Go-To-Market activities on the ground. We are also working hard to reach more customers with various fit-for-purpose technologies to ensure that everyone can have the benefit of higher broadband speeds and enhanced experience. 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In light of the current operating landscape and after careful consideration of the potential impact on our earnings alongside our efforts to transform the Company to adapt thereto, the Board has determined the review of our dividend policy to support TM’s long-term strategic objectives.” As Malaysia’s Convergence Champion, TM remains committed to fulfilling Malaysians’ digital and communication needs of all customer segments i.e., consumer, SME, corporate enterprises, public sectors, access seekers etc via our business clusters, unifi (consumer & SME), TM ONE (Enterprise and Public sectors) and TM Global (Global and Wholesale). Prospects for the Current Financial Year Ending 31 December 2018 The recent industry challenges and market environment have had major impact to the overall revenue estimates and earnings of TM Group in the financial year. TM anticipates that the challenging environment will persist for both its retail and wholesale segments. 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TM Group collaborates with MACC to combat corruption
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TM announces departure of its chairman and the appointment of his successor
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