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 & Astro collaborate to deliver high quality digital experience
TM provides Astro with full suite of wholesale infrastructure and connectivity solutions to enable Astro to serve its customers with reliable broadband and content services. Telekom Malaysia Berhad (TM) and Astro Malaysia Holdings Berhad’s wholly-owned subsidiary, MEASAT Broadcast Network Systems Sdn Bhd (Astro) today inked deals to collaborate in delivering a high quality digital experience to all Malaysians. The collaboration also signifies both companies' commitment to support the “Jalinan Digital Negara” (JENDELA) initiative in providing wider broadband coverage and a better experience nationwide. The agreements were signed by Imri Mokhtar, Group Chief Executive Officer of TM and Amar Huzaimi Md Deris, Executive Vice President, TM WHOLESALE while Astro was represented by Henry Tan, Group Chief Executive Officer and Shafiq Abdul Jabbar, Group Chief Financial Officer. Through this strategic collaboration, TM, via TM WHOLESALE, its global and wholesale business arm, will provide Astro with a full suite of infrastructure and connectivity solutions that comprises the whole range of wholesale services inclusive of high speed broadband (HSBB), bandwidth, backhaul and Internet access. This extensive and robust fibre network infrastructure will enable TM together with Astro to provide high-quality and reliable connectivity to their end-users. With TM’s HSBB service, Astro also will be able to provide broadband services to its customers without having the need to build a new infrastructure while extending its coverage to wider areas across the country via a fibre network. As for Internet services, TM’s internet access solution will enable Astro to offer high performance internet connectivity and a comprehensive solution to its customers. To complete the services, TM will also provide Astro with its Content Delivery Network (TM CDN), a newly developed content platform service that delivers seamless, faster and secure digital content. This will enable Astro to strengthen its video streaming efficiency to its current service offerings. Commenting on the collaboration, Imri said: “TM as the leading infrastructure partner for High Speed Broadband wholesale services, leveraged its superior network nationwide to support the industry’s broadband growth. We are also the primary mobile backhaul infrastructure provider for the industry with extensive coverage and capacity. As the digital infrastructure accelerator in Malaysia, we have always been a strong advocate of infrastructure sharing. Thus we are honoured to be given this opportunity to leverage each other’s expertise to provide Malaysians with high quality broadband and content services that we have. This strategic collaboration also demonstrates our commitment to ensure Malaysians are provided with a seamless and “always-on” connectivity experience. We are happy to work with Astro and this is yet another testament to our pivotal role as the enabler of Digital Malaysia aspirations.” Meanwhile, Henry Tan said: “This strategic partnership with TM lays the foundation for Astro to be an internet service provider. Astro’s goal is to provide Malaysians with the best digital experience and broadband value proposition. Leveraging on the strength of TM’s wide HSBB network will enable Astro to realise new revenue streams, scaling our broadband service with content bundles, or standalone broadband and other product lines. This deal gives us more flexibility to offer great value and convenience to our customers.”
Orbix International School takes safety seriously by adopting TM R&D’s EWAR
TM R&D assists Orbix International School in adhering to the Standard Operating Procedures (SOPs) with deployment of EWAR towards curbing the spread of COVID-19 virus. Telekom Malaysia Berhad (TM), through its innovation arm, TM Research & Development (TM R&D), further promotes the adoption of digital solutions in the education sector by deploying its Early Warning, Alert & Response or "EWAR" at Orbix International School (Orbix), a private school in Muar, Johor. EWAR is an Artificial Intelligence (A.I) driven contactless temperature screening solution internally-developed by TM R&D. In an effort to digitalise the Standard Operating Procedures (SOPs) outlined for schools, Orbix has installed EWAR Compact, one (1) of EWAR's product categories, within their premise to better facilitate the temperature screenings of their students, teachers and visitors towards curbing the spread of COVID-19 virus. Commenting on the initiative, Dr. Sharlene Thiagarajah, Chief Executive Officer, TM R&D said, "We are honoured to be working with an educational institution such as Orbix to deploy our cost-effective and innovative solution in response to the required safety protocols. This illustrates the flexibility and readiness of education vertical in adapting to the new normal. At TM R&D, we are ever ready to assist businesses and organisations to get back on their feet safely." "We truly believe that deploying the EWAR Compact at schools or any educational institutions can provide students and teachers with a near-normal return to school experience as possible. We hope that this effort can encourage other schools and educational institutions to install EWAR Compact and simplify the adoption of the new SOPs in our battle against COVID-19." EWAR Compact is an AI-driven, one-on-one contactless thermal screening solution with a high accuracy of +/- 0.3℃, fast (~1sec) detection and voice prompt. In addition, AI-based facial recognition capabilities can also be applied with the solution. With EWAR Compact, students and teachers can go to schools with peace of mind, knowing that their schools are using the most effective technology available to safeguard their health. "Besides that, we are delighted to see more schools adopting digital solutions as this will expose teachers and students on how technology can help improve lives through safety. The exposure to EWAR Compact will also help students to experience digitalisation in action first-hand, and witness the benefits of digital adoption even before they enter the workforce. We hope this will help groom an industry-forward talent pool which will subsequently drive the nation's digital aspiration, befitting TM Group's role of the enabler of Digital Malaysia," she added. "Deploying EWAR Compact was a vital step for us as we were looking for the most effective technology available in safeguarding the health of our students and teachers. So far, we have received positive feedback on how EWAR Compact has enhanced the efficiency of temperature taking while simultaneously improving social distancing," said Govindan Nair, Chief Marketing Officer of Orbix Education. "The students especially have shared that they like how interactive the solution is. As we are firmly committed to ensuring the health and safety of our students, it is also important for us to expose our students to how innovation results in real-world solutions," he added. Back in July, TM R&D has successfully installed EWAR Compact at 12 selected schools under the purview of Bangsar / Pudu District Education Office (PPDBP) namely Victoria Institution, Sekolah Menengah Kebangsaan (SMK) Dato' Lokman, SMK Seri Saujana, SMK Desa Petaling, SMK Cochrane, SMK Taman Maluri, SMK Alam Damai, SMK Bukit Jalil, SMK Dato' Onn, SMK (P) Bandaraya, SMK Convent Jalan Peel and SMK Seri Permaisuri. During the early stages of the Movement Control Order (MCO), TM R&D has introduced two (2) main product categories under EWAR, namely EWAR Crowd and EWAR Compact as part of its contribution in the fight against COVID-19. The solution comes with four (4) main capabilities that close the critical loop from detection to containment. It is non-intrusive and has use-cases for both crowd and one-on-one scanning, respectively. EWAR Crowd comes with a dual-camera (thermal and optical) and is designed to conduct a rapid body temperature screening of approximately 10-15 individuals per second simultaneously at high traffic areas. It can easily be deployed in locations with mass traffic flow such as offices, shopping complexes, transportation hubs, universities, schools, tourist attractions, airports, immigration centres, and hospitals. EWAR Compact on the other hand is more suitable for a one-on-one contactless thermal screening. This can eliminate the need of the hand-held temperature taking, which can subsequently improve social distancing and minimise long queues. Both EWAR models have been installed at more than 150 sites across several industry verticals and have gone regional to help keep businesses safe beyond Malaysian shores. The solutions have been installed at the quarantine and treatment centre for COVID-19 cases at Malaysia Agro Exposition Park (MAEPS) in Serdang, large and mid-size office lobbies, hotels, Kuala Lumpur City Hall (DBKL) payment counters, various sales galleries and Gamuda Land construction sites, just to name a few. TM R&D has been growing from strength to strength since 2016, winning seven (7) globally recognised awards over the last two (2) years. Our innovations cut across multiple verticals such as the Smart Retail Analytics and Smart Safety Helmet, all developed internally by local talents in TM R&D. As the organisation continues to expand beyond connectivity and into new value-added digital and smarter platforms, its role in TM has become more prominent and exciting. For more information about TM R&D and its products and services, please log on to www.tmrnd.com.my. Follow us on LinkedIn (TM Research & Development) for more news and updates.
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).
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