KUALA LUMPUR, July 4 — Telekom Malaysia Bhd’s (TM) shares were actively traded in the morning session of Bursa Malaysia today on bullish outlook and after unveiling new affordable broadband plans with price cuts.
At 11am, TM’s shares perked 16 sen to RM3.47 with 24.17 million shares changing hands.
Public Investment Bank in a research note today said TM had introduced several new broadband plans to maintain or grow market share, as well as fullfil the national broadband aspiration with respect to price, speed and coverage.
“The new plans include new affordable entry level UniFI package at 30 Mbps for the targeted B40 segment at below RM100 a month, UniFI ‘turbo’ plans offering more than double the current speed at the same prices and special package upgrade for Streamyx customers in UniFI areas,” it said.
It said rather than a price cut across the board for all customers, TM is only delivering the broadband price reduction for low-income earners, while all existing customers will be upgraded to higher speeds at the prevailing prices.
It added that currently about 35 per cent of subscribers are under the category of 30 Mbps or below, but not all are classified under the B40 segment.
Kenanga Investment Bank in another note said the affordable package is expected to attract more usage from the B40 segment.
“While one may be concerned that the upcoming affordable broadband price may cause the current B40 subscribers to downgrade their subscription plans, the relatively low household coverage area in the segment at currently 20 per cent, may suggest there is ample room for TM to expand broadband services via the affordable broadband package in our view,” it said.
Hong Leong Investment Bank said TM had revised its headline key performance indicator in view of the challenging market outlook and lowered the capital expenditure allocations to maintain minimum distribution as per divided policy.
It said TM’s investments would be centred on the mobile and twin core data centre which is expected to be completed in this quarter with plans to taper down outlay to expand fibre reach, to instead focus on sweating assets and also be an access seeker at locations where it had no presence.
Public Investment Bank has maintained a “trading buy” call and target price of RM4.65 on TM and Kenanga Investment retained an “outperform” view on the company, but revised upward its target price to RM4 from RM3.70 previously.
Hong Leong Investment has reiterated a “hold” call with a higher target price of RM3.21 from RM3.02 previously. — Bernama
