Increasing regulatory, competitive pressure to persist for TM
KUALA LUMPUR: With increasing regulatory and competitive pressures having negatively impacted all of Telekom Malaysia Bhd’s (TM) business segments, analysts are projecting that these pressures will persist in the immediate term.
As per TM’s news release, the group reported loss after tax and non-controlling interests (LATAMI) of RM175.6 million in the third quarter of 2018 (3Q18), compared with RM102 million profit after tax and non-controlling interests (PATAMI) in the prior quarter.
“TM’s core net profit, or normalised PATAMI excluding non-operational items, stood at RM266.4 million, a 71 per cent improvement sequentially,” the group also reported.
According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), the increasing regulatory and competitive pressures have negatively impacted all the group’s business segments.
“We foresee these pressures to persist in the immediate term,” MIDF Research said. “Our main concern lies with unifi, the group’s largest revenue contributor.”
The research arm viewed that the availability of unifi 30 megabits per second (Mbps) basic plan to all segments of the market could lead to TM’s unifi customers downgrading their respective broadband packages should the monthly usage does not exceed 60 gigabytes (GB).
MIDF Research noted that this would put downward on unifi average revenue per user (ARPU).
“Note that the unifi 30MBps basic plan is available at RM79 per month while unifi lite plan 10Mbps starts from RM129 per month.”
Am Investment Bank Bhd (Am Investment Bank) expected customers’ gradual migration towards the more affordable government-mandated plans to substantively cut TM’s immediate earnings.