TM open to talks with any party to ‘fill up gap’
By Goh Thean Eu February 28, 2014
- Registered low net profit for full year, mainly due to FX losses
- ‘No comment’ on rumours it is in talks to acquire P1
TELEKOM Malaysia Bhd (TM), the country's largest fixed-line telecommunications company, said it is open to talks with any party to help transform itself into a full-suite services provider.
"Mobility is important – we will talk to anybody who will be able to [allow] us to complete the portfolio of services,” TM group chief executive officer Zamzamzairani Mohd Isa (pic) told a media briefing in Kuala Lumpur on Feb 27.
“[This is] not just restricted to one single company. We will talk to everyone to see who else can help us to fill up the gap," he added.
When asked if TM was in talks to take over Packet One Networks (Malaysia) Sdn Bhd (P1), the company declined to elaborate further.
"We have already given a statement that we don't comment on speculation," said Zamzamzairani.
TM has been widely rumoured to be one of the two parties keen to buy wireless broadband services provider P1, a 57% subsidiary of Green Packet Bhd. There were reports that suggested a deal could be sealed by the end of February.
Should a deal between TM and P1 be sealed, it could transform TM into a spectrum powerhouse. TM currently has 10MHz of spectrum in the 850MHz band and another 8.5MHz of the 450MHz band. Meanwhlie, P1 has a 30MHz block in the 2.3GHz band and a 20MHz of the 2.6GHz band.
Achieved all KPIs
TM, which announced its full year financial results on Feb 27, revealed that fourth quarter sales dipped 5.2% to RM344.24 million while revenue went up 6% to RM2.81 billion.
For the full year, its revenue went up 6.4% to RM10.63 billion while net profit fell 20% to RM1.01 billion.
[RM1 = US$0.30]
The higher revenue was mainly driven by continuous growth in its data and Internet businesses, while the lower earnings was mainly contributed by foreign exchange losses, the company said. For the full year, TM registered a foreign exchange loss of RM105 million.
Nevertheless, it said it had achieved all its headline key performance indicators (KPIs) this year. It is also the fourth consecutive year in which TM achieved all its headline KPIs.
Its 2013 headline KPIs include revenue growth of 6%, normalised EBIT (earnings before interest and tax) growth of 3%, and achieving a Customer Satisfaction Index (CSI) of at least 72. For the full year ended Dec 31, its EBIT growth was 18.2%.
For 2014, its headline KPIs will include revenue growth of 5% to 5.5%, EBIT growth of 5%, and a CSI of 72 points.
Expanding in Indonesia
During the briefing, TM chief financial officer Bazlan Osman said that capital expenditure for 2014 is likely to be between 20% and 22% of revenue.
Assuming TM achieves its 2014 revenue goals (growth of 5% to 5.5%), it would mean that TM's 2014 revenue would be at least RM11.15 billion. From that amount, it would also translate that capital expenditure is likely to be in the range of RM2.2 billion to RM2.4 billion.
“Nevertheless, we also would like to stress that a significant portion of our capital expenditure is project-driven. This means we would only invest in it when we secure the project,” said Bazlan.
A portion of the capital expenditure may likely be used to further expand its business process outsourcing (BPO) presence in Indonesia. It currently has two contact centres in Indonesia, one in Jakarta and the other in Yogyakarta.
“We are looking at further expansion in the BPO space in Indonesia,” said Zamzamzairani.
Growing its BPO presence is seen as one of the key moves for the company’s future growth, as its cash-cow voice business is slowly declining. At present, TM’s BPO business is parked under its ‘others’ category.
For the full year, voice business revenue fell 2.4% to RM3.6 billion. It now contributes 34% to overall group revenue, as compared with a 37% contribution in 2012.
TM’s Internet business contributed 25% of overall group revenue, followed by data at 24% and ‘others’ at 17%. Businesses under the ‘others’ category also include the Multimedia University (MMU) tuition fees and customer projects.
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