KUALA LUMPUR, Jan 6 ― Maybank Investment Bank (Maybank IB) has set a neutral call on the telco industry following the government’s decision to review its fifth-generation (5G) network rollout model.
The outcome of the review could have material longer-term implications to mobile telecommunication providers, it said in a note today.
“Just when we thought the move to a single government-owned 5G wholesale network was inevitable, the Communications and Multimedia Ministry surprised the market last month (by stating) its willingness to review its 5G position, with a decision to be made in Jan 2022.
“Note that the 5G incumbent Digital Nasional (DNB) is already trialling 5G services with Yes and TM in Putrajaya, Cyberjaya and selected areas in Kuala Lumpur. Such policy flip-flop invariably paints the country’s policy-making in a bad light,” it said.
The investment bank noted that as the government is still dealing with the flood situation, there might be a delay in the review outcome.
As such, the policy uncertainty would likely weigh on sentiments in the near term.
In the meantime, Maybank IB named TM and Axiata as its top picks, with a target price of RM7.40 and RM4.50, respectively.
It said TM is poised to benefit from higher fibre demand from both increased broadband adoption and 5G deployment, while Axiata’s sizable international operations mean a relatively lower exposure to the policy uncertainty risk in Malaysia.
“Axiata intends to gradually transition into a ‘high dividend’ company in the coming years, and has identified a number of initiatives to fund a targeted 20 sen dividend per share in 2024,” it noted. ― Bernama
