Stock Name: TM
Company Name: TELEKOM MALAYSIA BHD
Research House: OSK
KUALA LUMPUR: OSK Research retains its Neutral recommendation on Telekom Malaysia on its expensive valuations. It said on Thursday, March 25 the high-speed broadband (HSBB) opens up a new revenue stream and is viewed as a longer-term panacea to TM's eroding fixed line franchise. However, "we are not overly excited given expectations of modest take-up in the medium-term that will be accompanied by sharp increases in opex and capex(upside risks to capex) into FY12 as TM expands its coverage to 1.3 million premises," it said. OSK Research expects ballooning HSBB opex/capex to crimp earnings with suppressed EBITDA margins well into FY11. "TM remains expensive when stacked against our regional telecoms universe albeit boasting a decent dividend yield of over 7%. Maintain NEUTRAL based on TP of RM3.03," it said. It said under the HSBB, for a start, TM will be making available 3 bundled packages (voice+broadband+IPTV)- 5Mbps, 10Mbps and 20Mbps with monthly subscription likely ranging from RM149 to sub- RM250 (actual pricing unveiled this morning). The entry level plan is priced only slightly higher than its top tier 4Mbps Streamyx Combo ADSL package which retails for RM150/mth (including fixed line access). Subscribers will get a sleek Huawei set-top box, a router modem and an IP phone (TM's IP phone allows free inter-IP calls with an attractive flat rate tariff for mobile calls of 10sen/min). Overall, we believe the price-points are attractive and would encourage some of its existing ADSL subscribers on 1Mbps/4Mbps lines to up-trade with some cannibalisation of the 4Mbps plan anticipated. To help boost broadband penetration in the country, TM also lowered the monthly access for its entry level 384kbps ADSL plan to RM38/mth from RM50/mth. With access to RM1bn worth of USP funding, it will also provide bundled netbooks to students under a student broadband package.
Company Name: TELEKOM MALAYSIA BHD
Research House: OSK
KUALA LUMPUR: OSK Research retains its Neutral recommendation on Telekom Malaysia on its expensive valuations. It said on Thursday, March 25 the high-speed broadband (HSBB) opens up a new revenue stream and is viewed as a longer-term panacea to TM's eroding fixed line franchise. However, "we are not overly excited given expectations of modest take-up in the medium-term that will be accompanied by sharp increases in opex and capex(upside risks to capex) into FY12 as TM expands its coverage to 1.3 million premises," it said. OSK Research expects ballooning HSBB opex/capex to crimp earnings with suppressed EBITDA margins well into FY11. "TM remains expensive when stacked against our regional telecoms universe albeit boasting a decent dividend yield of over 7%. Maintain NEUTRAL based on TP of RM3.03," it said. It said under the HSBB, for a start, TM will be making available 3 bundled packages (voice+broadband+IPTV)- 5Mbps, 10Mbps and 20Mbps with monthly subscription likely ranging from RM149 to sub- RM250 (actual pricing unveiled this morning). The entry level plan is priced only slightly higher than its top tier 4Mbps Streamyx Combo ADSL package which retails for RM150/mth (including fixed line access). Subscribers will get a sleek Huawei set-top box, a router modem and an IP phone (TM's IP phone allows free inter-IP calls with an attractive flat rate tariff for mobile calls of 10sen/min). Overall, we believe the price-points are attractive and would encourage some of its existing ADSL subscribers on 1Mbps/4Mbps lines to up-trade with some cannibalisation of the 4Mbps plan anticipated. To help boost broadband penetration in the country, TM also lowered the monthly access for its entry level 384kbps ADSL plan to RM38/mth from RM50/mth. With access to RM1bn worth of USP funding, it will also provide bundled netbooks to students under a student broadband package.
No comments:
Post a Comment