TM bullish about mobile business

KUALA LUMPUR: Telekom Malaysia Bhd, whose net profit more than doubled in the first-half ended June 30 2019, says its long-term earnings stability will depend on how fast it can improve its mobile service offering, the unifi Mobile. Unifi Mobile is TM’s mobile service arm, which was previously known as webe.

“Our short-term earnings will be within the guidance but for the future, I am quite bullish that we can grow our earnings if we improve our mobile services. Once we improve that, there is high possibility that we can get much more (earnings),” TM group chief executive officer Datuk Noor Kamarul Anuar Nuruddin said.

“This (mobile) is the area that we still are not that good. But if we put more effort on this, we will be able to serve better and of course it will create more revenue.

“Our revenue currently mainly comes from fixed line business. We need more revenue from mobile,” Noor Kamarul told reporters at TM’s first-half results briefing here today.

Group chief financial officer Nor Fadhilah Mohd Ali said unifi Mobile had yet to break even, and would need more time to do so.

She declined to comment on the timeline but said the group has its own internal target.

“As of 1H 2019, we have seen that on convergence basis, of which unifi Mobile is part of the package, was at 56 per cent of TM households. This was higher than 47 per cent recorded in 1H 2018,” she said.

unifi Mobile has been bleeding losses except for financial year 2016, since TM took it over in September 2014. Before webe, it is known as Packet One Networks (M) Sdn Bhd (P1).

Overall, TM saw its net profit surge to RM422.46 million in the first six months from RM259.09 million a year ago.

Group revenue, however, dropped 4.1 per cent to RM5.55 billion from RM5.78 billion due to lower contribution from all lines of products except data services.

In the second quarter, TM also posted a double-digit growth, with the net profit rising 12 per cent to RM114.18 million from RM101.93 million a year ago. Revenue eased 5.7 per cent to RM2.77 billion from RM2.94 billion.

“We continued to face challenges in 1H 2019. However, our cost optimisation efforts continue to show results and we will keep the momentum on profitability going,” Noor Kamarul said.

“We shall navigate the challenges on revenue through stronger focus on customers. We will also continue to serve as a strategic partner of the National Fiberisation Connectivity Plan (NFCP) backed by our solid network infrastructure,” he added.

Noor Kamarul said capital expenditure (capex) spent in 1H was in line with the group’s guidance at 8.1 per cent of revenue or RM450 million.

He said the capex was mainly for access (54 per cent), while the rest were for support systems (27 per cent) and core network (19 per cent).

“Our capex is well within guidance as we continue to optimise investment for growth and quality improvement to better serve our customers.

“We will place stronger focus on our customers and this is evidenced in a number of initiatives that we have implemented thus far.

“We recently announced our latest #khabarbaik on the introduction of unifi Air, the new unifi Lite entry package and Streamyx repricing to reward existing customers and attract new ones onboard.

“We also pledged our commitment on improved service delivery, such as the implementation of 24-hour installation for new unifi sign-up, within two-hour customer support, and a new myunifi app.

“The announced (copper) network upgrade is also ongoing in our commitment to enhance the overall broadband customer experience,” he said.

Source: NST