Stock Name: TM
Company Name: TELEKOM MALAYSIA BHD
Company Name: TELEKOM MALAYSIA BHD
| Research House: ECMLIBRA | Price Call: HOLD | Target Price: 4.78 |
Telekom Malaysia Bhd (T MK, Hold, TP: RM4.78), which has been progressively rolling out high speed broadband (HSBB), will introduce the service to commercially-driven areas beyond 2012. TM Group CEO Datuk Seri Zamzamzairani Mohd Isa said its main priority now was to fulfill its obligation to provide 1.3m premises passes by year-end under its agreement with the Government. "Currently, we have 1.18m premises passed and 79 exchange areas. By end-2012, we will have 1.3m premises passed, completing the first phase of HSBB project rollout under the Public Private Partnership (PPP) agreement. Beyond 2012, we will introduce it to economically viable areas. State capital will be a natural choice," Zamzamzairani said. Under the agreement, TM will be providing the HSBB access and transmission services to REDtone. REDtone will be able to instantly access the 1.3m premises covered by the HSBB network. The agreement is for of 5 years. (StarBiz)
Comments: This collaboration will allow REDtone International, the 4th service provider (after Maxis, Celcom and P1) to leverage on TM's HSBB platform in rolling out its differentiated valueadded services in the SMEs/SMIs segment. Although the value of this agreement has not been disclosed, we understand that there will be a small upfront fee involved, and thereafter, TM will earn wholesale revenue that will vary according to the number of subscribers that REDtone acquires for its SME segments. We maintain our Hold recommendation for TM with target price of RM4.78. (Desmond Chong)
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