2002 - a year of contrasting fortunes for Malaysia’s largest telcos

28 Feb 2003

Fixed line behemoth Telekom Malaysia [Kuala Lumpur: TLMM.KL] reported a 41% drop in profit to MYR1.06 billion (USD279 million) for 2002, in stark contrast to the country’s leading mobile operator Maxis Mobile which said its net income rose by 58% to MYR949.7 million. Telekom Malaysia, which despite its near monopoly on the fixed line sector has a weak mobile division, said its poor performance was a direct result of declining profits from its traditional core business and the lack of one-off gains relating to asset sales; in 2001 the telco made an exceptional gain of MYR800 million through the sale of its shares in Thailand’s Digital Phone Co. Telekom chief executive Md Khir Abdul Rahman said that with the outlook for the fixed line sector in 2003 again looking ‘flat’ the company was ramping up its efforts to improve its mobile arm TM Cellular, which turned its first profit in 2002. The CEO said that plans were afoot for Telekom to acquire the country’s number two operator Celcom and then merge it with TM Cellular in a bid to oust Maxis Mobile from the top spot.

Meanwhile, Maxis Communications [Kuala Lumpur: MSXC.KL] mobile arm reported a significant hike in profits to MYR949.7 million from MYR600.9 million, on the back of 800,000 net subscriber gains to take its total to 3.09 million; 1.1 million users take contract accounts and the remainder are pre-paid. Turnover increased by 24% to MYR3.77 billion from MYR3.03 billion and EBITDA rose by MYR500 million to MYR1.9 billion; the EBITDA margin stood at 50% from 46% previously. Maxis CEO Dato’ Jamaludin Ibrahim reiterated that while its encouraging performance was driven by 35% subscriber growth and a 243% increase in data revenue, it was the company’s focus on profitability and cash rather than market share which was the key factor underpinning its results. Company chairman, YABhg Tun Mohammed Hanif Omar, added that Maxis was delighted to have performed so strongly despite being engaged in a long-running listing and its own acquisition project to buy smaller rival TIMECel.

Malaysia