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More Malaysians are Terminating Broadband Services from Telekom Malaysia [3Q19]

More Malaysians are terminating their fixed broadband service with Telekom Malaysia (TM) as the “Convergence Champion and No. 1 Converged Communications Services Provider” in Malaysia failed to retain its subscriber base.

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Telekom Malaysia’s financial results for the third quarter (3Q19) ended 30 September 2019 revealed that the Telco’s fixed broadband subscriber base is down to 2.16 million compared to 2.29 million (3Q18) one year ago.

During the latest financial quarter, “Malaysia’s Convergence Champion” lost 3k fixed broadband subscribers between July, August and September 2019. It currently has 1.37 million Unifi fixed broadband subscribers (+34k) and just 786k Streamyx users (-37k).

According to Telekom Malaysia, the “Drop in Streamyx was partly due to migration to unifi” but it did not say why the remaining Streamyx subscribers (it lost) decided to terminate the service and did not migrate to Unifi.

ARPU for Unifi fixed broadband is currently at RM167 (-RM2) while its RM111 (-RM2) for Streamyx.

Telekom Malaysia did not disclose the size of its Unifi Mobile subscriber base which has yet to reach the 1 million mark.  A research house recently said that Telekom Malaysia (TM) has less attractive Unifi Mobile plans, network compared to U Mobile.

Financial and Operational Highlights as at Year-to-Date (YTD) September 2019 vs YTD September 2018 (according to Telekom Malaysia):

  • Group Revenue of RM8.40 billion, 3.8% lower against YTD September 2018 – in line with guidance- mainly due to lower contribution from all lines of products except data and non-telecommunication related services.
  • Group Reported Earnings Before Interest and Tax (EBIT) for YTD September 2019 increased to RM1.20 billion, from Loss Before Interest and Tax (LBIT) of RM187.3 million over the corresponding nine (9) months period last year, on the back of lower operating cost, from the Group’s various cost optimisation initiatives.
  • Group Reported Profit After Tax and Non-controlling Interests (PATAMI) showed significant improvement with a 718.9% growth YTD to RM683.8 million, from RM83.5 million in the corresponding period last year. Stripping off non-operational items, Normalised PATAMI stood at RM810.9 million, higher by 53.7% against the same period last year.
  • The total capital expenditure (CAPEX) was within guidance at 8.8% of revenue or RM736.0 million. Out of the amount spent, 16% was made for Core Network, 58% for Access and the balance 26% was made for Support System.

No dividend was declared.

Dato’ Noor Kamarul Anuar Nuruddin, Group Chief Executive Officer, TM, in a media announcement posted to Bursa Malaysia said: “Overall, in 3Q 2019 we saw continued improvements in our fundamentals. I’m pleased to report that our cost management initiatives under our performance improvement plan carried out since last year continues to yield results with profitability improvement. We have managed to keep a closer eye on our operational efficiencies to deliver sustained profitability with lower YTD OPEX/revenue. However, in line with sector contraction, our revenue challenges still persist on the retail front, in line with our expectations and 2019 market guidance.”

“Our CAPEX for YTD September 2019 is well within guidance, totalling 8.8% of revenue, and on track as we continue our targeted investments to ensure we deliver better service experience for all our customers.”

“We continue to offer attractive unifi products and promotions to acquire more customers, whilst addressing Streamyx customers and coverage pain points with price adjustments and our wireless offerings,”

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