25 May 2022
TM records steady performance in 1Q2022 with revenue & PATAMI up 2.9% & 4.4%; maintains focus on its growth strategies execution
In the second year of its Transformation, the Group is on track to achieve its 2022 market guidance, focusing on strengthening its core businesses and investing in new growth areas
Telekom Malaysia Berhad (TM) continued its growth trajectory and long-term business sustainability, recording a steady performance in its First Quarter ended 31 March 2022 as compared to the same period last year (YoY).
The Group's operating revenue increased by 2.9% to RM2.89 billion, compared to RM2.81 billion in the same quarter last year, driven primarily by increased demand for voice, Internet and multimedia. Despite rising competition to offer converged solutions among telco and other technology players, TM continued to deliver strong customer growth across its operations.
Capitalising on its core businesses and investing into new growth areas, TM further ramped up its transformation initiatives, delivering profit after tax and non-controlling interests (PATAMI) for the quarter at RM339.9 million or 4.4% higher than the RM325.5 million recorded in 1Q2021. The Group also recorded lower financial costs subsequent to the early redemption of its RM2.0 billion sukuk in March 2021, as well as lower foreign exchange translation losses on borrowings. The Group has applied the Cukai Makmur statutory tax rate accordingly for the current quarter.
Accelerating into the second year of its Transformation, TM brought forward its manpower optimisation to enable earlier realisation of expected benefits to the Group. This, along with foreign exchange impact on trade settlement has led to a 5.0% decrease in EBIT at RM560.4 million for 1Q2022 compared to RM589.7 million in the same quarter last year. Excluding these costs, the Group's underlying EBIT is 14.0% higher at RM650.2 million compared to RM570.5 million in 1Q 2021. Free Cash Flow is lower by 15.1% at RM658.8 million compared to RM775.7 million due to higher CAPEX as the Group continues to invest in business expansion and meeting customers' demands through technology refresh and network delivery, ensuring steady growth.
unifi: Double-digit revenue and subscriber growth
unifi continued its growth performance, recording revenue increase of 10.6% from RM1.25 billion to RM1.38 billion in the current quarter. Sustained by increasing demand from Internet, voice and sales of devices, with cumulative fixed Internet subscribers increasing by 17.5% against the corresponding quarter last year. unifi remains the largest growth contributor for the Group.
unifi will continue to maintain its leadership in fixed broadband and enhance its Fixed-Mobile Convergence (FMC), enriched with TV and streaming content. This reflects its commitment to improve its FMC customer experience with better and seamless service. unifi will also grow its SME digital platform as a one-stop service centre for solutions catering especially to SMEs nationwide.
TM Wholesale (TMW): Higher revenue from increased demand for data services
TM Wholesale (TMW) also recorded a growth performance for 1Q2022, with revenue increasing by 1.2% from RM631.9 million in 1Q2021 to RM639.5 million, mainly contributed by higher revenue from voice and data services. This was underpinned by increasing demand from High-speed Broadband Access (HSBA) and higher International Voice and Data.
To date, TMW continues to enable industry broadband and 4G network via its fibre infrastructure, with the ongoing 5G rollout further strengthening that role. On the international front, it will continue to serve other OTTs and hyperscalers with connectivity and data centres, while regionally, TM Wholesale aspires to establish Malaysia as a digital hub for ASEAN via new submarine cables, enhanced data centre solutions and edge computing.
TM One: Renewed focus on growing B2B digital solutions market
TM One, the Group's enterprise and public sector arm, recorded a 7.4% decrease in revenue from RM925.2 million to RM856.8 million in 1Q2022 due to decline in data services revenue.
Strengthening and growing its B2B digital solutions, TM One has focused its efforts on high potential industry verticals, namely healthcare, manufacturing, education, oil & gas, banking, financial services & insurance (BFSI) and public sector. It has entered a partnership with Tune Protect and Huawei Malaysia that saw Tune Protect becoming the first organisation in Malaysia to host an insurance core system on public cloud (Cloud αEdge).
Commentary and Outlook from Imri Mokhtar, TM Group Chief Executive Officer
"With our economy and borders reopening, TM is powering Malaysia's journey on its road towards recovery, by ensuring the vision of an inclusive and extensive Digital Malaysia becomes a reality.
"Into the second year of our Transformation, we are focused on strengthening our core business while investing into new growth areas to meet customers' demands. In ensuring sustainability in the long run, we continue to grow our profitability to invest and seize opportunities arising from digital acceleration.
"One of these opportunities is in the exciting space of digital solutions and services for enterprises. Building on TM One's existing capability and relationships with enterprises and the public sector, we will deliver speed and agility through our new digital arm Credence: a corporate start-up led by technology leaders.
"unifi continues to better its fixed broadband and Fixed-Mobile Convergence value proposition to improve customer experience, while expanding our offerings to provide quality entertainment to customers at home or on-the-go.
"We have also achieved some key milestones in our sustainability efforts. TM One has successfully secured the Green Electricity Tariff from Tenaga Nasional Berhad for its data centres in Kuala Lumpur, Cyberjaya and Johor Bahru, contributing to a lower carbon footprint as the demand for cloud storage inevitably increases. This is in addition to the existing Green Building Index (GBI) certification earlier obtained for its core data centres. TM's broader ESG commitment also remains consistent with Malaysia's initiatives towards achieving net-zero Greenhouse Gas emission for the country by 2050.
"Meanwhile, TM Wholesale continues to establish Malaysia as a regional digital hub via new submarine cables, edge computing, data centres and supporting international connectivity. On the domestic front, TM Wholesale continues performing its role as the enabler for industry broadband, 4G and 5G network via fibre infrastructure that will transform the nation's connectivity capabilities."
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TM to enhance customer experience with 2600 MHz spectrum
Accepts offer from MCMC for total applicable fee of RM37 million over five (5) years Telekom Malaysia Berhad (TM) reaffirmed its commitment to enhancing customer experience, capacity and value with the 2600 MHz spectrum band acquired from the Malaysian Communications and Multimedia Commission (MCMC) recently. TM accepted the offer from MCMC for a 20 MHz spectrum block of the 2600 MHz spectrum band through its subsidiary, Webe Digital Sdn. Bhd. (“webe”). The allocated block of 2575 MHz to 2595 MHz is effective from 1 July 2022, with total applicable fee of RM37 million over a period of five (5) years and according to the following components: Upfront fee of RM7,060,000.00 Annual fee of RM5,984,000.00 to be paid by 15 December each year TM’s Group Chief Executive Officer, Imri Mokhtar said that the spectrum provides substantial value and leverage to TM as a leading convergence provider. “The increased capacity will enable TM to provide seamless fixed and wireless access, and content to its retail and enterprise customers at home, office or on the move.” “The acceptance of this spectrum offer is also aligned with our future direction in embarking into a dynamic digital space. With our strong and extensive fibre infrastructure, the spectrum will enable future expansion of telecommunication services to customers, for an end-to-end converged experience,” Imri added. “We would like to express our sincere appreciation to the Ministry of Communications and Multimedia as well as MCMC for extending the spectrum allocation to TM.” The allocation of the spectrum also allows TM to support the national agenda in delivering extensive telecommunications coverage with high service quality, especially through the Jalinan Digital Negara (JENDELA) and the Malaysian Digital Economy blueprint (MyDIGITAL).
TM wins again at Malaysia Technology Excellence Awards 2021 for its innovation, patrol
This is the fourth award received by TM at Malaysia Technology Excellence Awards in three years running Telekom Malaysia Berhad (TM) through its innovation arm, TM Research & Development (TM R&D) wins the AI – Telecommunications Award at the recent Malaysia Technology Excellence Awards 2021, presented by Singapore Business Review. The award was conferred in recognition of the Company's achievement in developing PATROL as a proof of function for research particularly on automatic detection of construction using vehicle dashcam and generate proactive alerts using artificial intelligence (AI) and machine learning algorithms. This is the fourth award received by TM R&D from the Malaysia Technology Excellence Awards in its three years of running. The awards ceremony lauds exceptional companies that have successfully pioneered IT products, solutions and innovative technology projects in their respective industries to boost Malaysia's fast-growing economy. Commenting on the accomplishment, Dr. Sharlene Thiagarajah, Chief Executive Officer, TM R&D said, "This is indeed a proud moment for us. Winning the award is a huge boost for our effort in showcasing how AI can be applied to solve real-life problems. It is also a huge encouragement for us to further strengthen our position as the leader in the research, development and innovation field. This award goes out to the team for delivering such outstanding work. We hope it will give them the drive to explore more innovations for TM to serve a more digital society, digital business, digital industry and digital Government, towards accelerating Digital Malaysia." Project PATROL was developed to provide early warning alerts on areas where TM infrastructure has a high risk of being destroyed due to civil and construction works by a third party. Ideally, before the civil or construction works were to begin, TM and other utility companies are to be consulted to ensure proper precautionary measures are taken to avoid telecommunication cable or other utility infrastructure cuts such as water or sewerage. The cable cuts will lead to loss of broadband and other telecommunication services which will cause major inconveniences to consumer lifestyle and businesses, as well as operation nightmare for any telcos. To fill in those gaps, PATROL was developed powered by digital and AI capabilities. PATROL leverages AI, object detection capabilities and the Internet of Things (IoT) to detect a construction area using a dashcam. The system then automatically checks if the unregistered civil and construction activity is in close proximity to underground or overhead cable infrastructure. Several parameters are used to assess risk before an alert is sent to the Network Operations Centre for investigation. "PATROL provides real-time alerts on civil and construction activities that pose a high risk to the security and safety of TM's cable infrastructure. This information allows telco providers to act fast in preventing possible threats to their assets. With PATROL, we foresee a huge opportunity for operational cost avoidance due to cable cut cases," she further added. Established in 2001, TM R&D is the innovation arm for TM Group focusing on creating smarter ecosystems to make business and life easier for a better Malaysia. TM R&D's solutions are clustered around four (4) pillars namely Intelligent Platforms, Data Brokerage, Connectivity/Tools and IR4.0/Digital Solutions. Growing from strength to strength since 2016, TM R&D has won multiple global awards and generated more than 2,800 Intellectual Property Rights (IPRs) and 1,400 digital assets to date. TM R&D's innovations are all developed in-house and cut across multiple verticals such as Utilities, Retail, Agriculture, Healthcare and Education with safety and productivity as the top priority. As TM R&D continues to expand beyond connectivity and into smarter digital ecosystems, its role in TM has become more prominent and exciting. For more information about TM R&D and its innovations, visit www.tmrnd.com.my or email your inquiry to business@tmrnd.com.my or follow them on LinkedIn (TM Research & Development) for more news and updates.
unifi business a boost for MSMEs as economic recovery gains momentum
unifi Business Solutions help MSMEs kick start their online businesses As the country's National Recovery Plan gathers pace, many Micro, Small and Medium Enterprises (MSMEs) are ready to take advantage of the re-opening of economic sectors. In this respect, unifi has recently come up with solutions to help these businesses, many of which have transitioned seamlessly into the digital space post-COVID19 pandemic. In view of this, unifi is taking proactive steps to ensure that MSMEs can achieve business sustainability with its innovative offerings. This was made possible by partnering with proven technology partners and Government agencies that understand the needs of Malaysian businesses. With unifi Business Solutions, MSMEs can grow their businesses online and significantly boost sales and productivity at minimal costs through reliable high-speed Internet that comes with an array of tried-and-tested business solutions, including productivity and marketing tools. With solutions that suit the needs of current businesses, unifi Business Solutions have now established itself as the go-to platform for Malaysian MSMEs. This is attributed to its exceptional service, which includes swift, dependable nationwide support and sound, thought-out advice by its team of experienced consultants. For businesses venturing into the digital marketplace, they have the option of signing up with Digital Marketing Solutions where they can enhance their online presence by setting up a website, getting a business listing and securing more businesses with Facebook and Instagram ads. With cari@unifi Premium Listing, businesses are able to reach a wider customer base through postings listing and articles on unifi's cari@unifi marketplace platform. Productivity can be increased by signing up with Microsoft 365, where businesses can have real-time solutions to connect and collaborate anytime, anywhere. Understanding that new businesses might be overwhelmed with the digital marketplace maze, unifi Business, together with partners and Government agencies, offer free digital upskilling classes to MSMEs. Localised webinars by consultants and partners are held regularly to ensure that no businesses are left behind in the journey towards business digitalisation. In addition, all unifi business broadband and mobile customers will enjoy the benefits as a member of the unifi Business Club (uBC) where they will get access to relevant and current content at the uBC portal (https://ubc.unifi.com.my). Here, they can find content such as webinars, talk shows, live chats, events, business tips and articles that can help them navigate the business world. uBC members will also enjoy specialised financial assistance, productivity boosters, digital marketing platforms, tools and community engagement programmes that are tailored to a variety of business needs. Mohamad Yusman Ammeran, Head of SME Segment, unifi said with more economic sectors opening up, many MSMEs have embraced digitalisation to sustain and thrive, after a challenging period owing to the COVID-19 restrictions. "MSMEs form the backbone of our economy and Telekom Malaysia Berhad (TM) and unifi are ever ready to help these enterprises get back on their feet, come back stronger and help accelerate the country's economic recovery," he said. Yusman added that under unifi's current campaign, MSMEs could enjoy up to 50% off savings or get an RM5,000 matching grant for each company, as part of the PEMULIH initiative announced by the Government in June 2021. To encourage sign-ups amongst MSMEs, unifi is also offering exciting prizes under its Sign Up & Drive Away contest. The prizes include nine (9) four-wheel drive (4WD) vehicles during the contest period which will end on 31 December 2021. Other prizes include laptops, smartphones and computer tablets. So far, five (5) 4WD vehicles have been won, including by the latest winners, Zainun Ngah Enterprise and GAP Empire Trading, both of which are in the retail sector. Speaking at the prize giving event to the latest winners recently, Yusman said: "This is an excellent opportunity for local MSMEs to increase their productivity while reducing their operating cost, and at the same time, stand to win exciting prizes. We believe these offerings will help our customers bounce back stronger and help grow the Malaysian economy. We hope they see unifi Business not just as a service provider, but as an integral partner of their business journey." "unifi's online business solutions for MSMEs is in line with TM's support towards the Government's initiatives, such as JENDELA and MyDIGITAL, and fits into the Company's role as the enabler of Digital Malaysia," he added. For more information on unifi Business Solutions and MSME Digitalisation grant offerings, please visit www.unifi.com.my/business/smegrant.
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