KUALA LUMPUR (Aug 25): Telekom Malaysia Bhd is confident of navigating through industry competition as well as the review for its high-speed broadband (HSBB) wholesale pricing under the mandatory standard on access pricing (MSAP).
“We foresee that there will be headwinds, I mean the competition is going to be intense. As a business, it is something that we have to go through anyway, we have to find ways on how we make better or find better avenues or opportunities to [improve] ourselves," said newly-appointed group chief executive officer Amar Huzaimi Md Deris.
“There is no business without any challenge. We just have to prevail. We have plans on how we move forward in terms of growing our business. There could be other ancillary [things] that we could explore. We have to be creative in the market,” Amar Huzaimi said at a media conference on Friday (Aug 25) held in conjunction with the announcement of group's second quarter results
He said although the MSAP will have an impact on TM’s broadband offerings, the management is mitigating this by including more value-added services to the group’s products.
“We are now negotiating with the respective MNOs (mobile network operators) to close the AA (access agreement based on MSAP). If you ask whether there will be impact, of course there will be impact because it is from higher (wholesale pricing) to lower. But we are managing the impact,” he explained.
“I won’t call it lowering [broadband prices]. We look at it as a total portfolio. We have to reposition our total value offering. Of course, we can’t say it now, because we are still negotiating with some of the access seekers.
“For example, we will offer new value-added services to cover, depending on the [quantum] of reduction [in wholesale pricing]. This is something as a group we have to manage, in terms of balancing what we offer as a regulated service and also new services to complement. So, on the surface of it, definitely there will be an impact,” he added.
Amar Huzaimi said regardless of the MSAP review, TM has, over the years, been striving to provide more affordable broadband to the market.
“Over the years, we have been coming up with more competitive offerings to the market as well, so we take it like a stance that we are moving into that space anyway, in order to provide the market with a more competitive product with a compelling value proposition,” he said.
For the second quarter ended June 30, 2023 (2QFY2023), TM recorded its highest quarterly net profit since 4QFY2011, totalling RM568.74 million, up 50.4% from RM378.06 a year ago, driven by lower net finance cost and tax credits from the utilisation of previously unrecognised tax losses.
Stripping off the tax credits and lower finance cost, TM's operating profit dropped 9.6% year-on-year to RM630.7 million, due to higher preventive maintenance costs and depreciation.
Group chief financial officer Razidan Ghazalli said TM is still carrying forward “many years” of tax losses that could be utilised for the group’s profit after tax and minority interest (Patami).
“We have tax losses in our books. Under the tax rules, we are allowed to offset our tax losses against our profit, so that improves our Patami. We have not finished (these tax losses), there are still some tax losses that we can utilise in the future until it runs out.
“We can’t disclose [how much there is left], but there are some more that we are carrying forward from many years that we can still utilise,” he added.
On the entrance of Elon Musk’s satellite and telecommunication company Starlink into Malaysia, Amar Huzaimi said the technology could help the group offer its services to remote areas.
“We applaud that Starlink comes into Malaysia, as we see it as a complementary solution for us to reach areas that we cannot reach. There are many ways for Starlink to play in this market.
“In fact, for TM, we are the provider of backhaul [infrastructure] for Starlink, so that is one area that we can complement Starlink. On the retail front, we foresee that there could be a possible partnership that we can forge with Starlink to ensure that we can offer similar kinds of service to the last mile that we cannot reach,” he added.