KUALA LUMPUR (July 3): Telekom Malaysia Bhd (TM) has revised downwards its key performance indicators (KPIs) for 2018 amidst evolving market dynamics and a challenging operational environment.
In a statement to Bursa Malaysia today, TM's revenue growth was revised to a range of -1.0% to flat while earnings before interest and tax (EBIT) growth was set at about RM1 billion.
The original KPI for 2018 revenue growth was set at 3.5% to 4.0% while EBIT growth was expected to be maintained at 2017 level, which was about RM1.1 billion. Its customer satisfaction measure was also revised downwards to 72 from 74.
In the filing, the group also announced the implementation of its performance improvement programme 2018 (PIP 2018), a continuation of its transformation journey, which is at its 4th wave.
"We are currently facing numerous challenges to the business namely intensifying competition; increasing business and operating costs; cautious enterprise spending as well as increasing regulatory pressures. Given these headwinds, we are revising our Headline KPIs for 2018 — to an expected revenue growth of negative 1.0% to flat in 2018, Group Operating Profit (Earnings Before Interest and Tax (EBIT)) at approximately RM1.0 billion and Customer Satisfaction Measure of 72," TM's acting group chief executive officer Datuk Bazlan Osman said in a statement.
Capital expenditure (capex) guidance for the year has also been revised to between 20% and 22% of revenue compared to the high 20% guided earlier this year. It added that the capex entails reprioritizing its network spending and sweating of existing assets.
"In our ongoing transformation journey and to adapt to the changing landscape, TM has embarked on our 4th wave of Performance Improvement Programme 2018 (PIP 2018) which looks at four main pillars of Revenue Uplift, Sustained Profitability, Improved Cash Flow and Increased Productivity," Bazlan said.
He added that the strategic initiatives laid will assist TM in navigating through the current challenges, and position TM in a more resilient and competitive stead.
"The implementation of the PIP 2018 initiatives will provide us the runway to accelerate our current plans of convergence and digital," he elaborated.
The filing also noted four new plans for broadband and mobile that were introduced to boost TM's market leadership position.
One of them is a new affordable entry level unifi package at 30Mbps for the B40 segment to enable lower income groups to access high-speed broadband through this package at a price point below RM100. It is more than 40% lower in terms of existing 30Mbps package, and registration for pre-booking starts on July 15 this year.
The second involves unifi "turbo" plans, which offer more than double the current broadband speed, were also introduced.
"TM will gradually upgrade the speed for all its existing unifi customers at more than double the speed at no extra cost starting Aug 15, 2018, while new customers subscribing to existing unifi plans before Dec 31, 2018 will also be upgraded accordingly in 2019," it said.
The third is special package upgrade for pre-unifi, formerly known as streamyx, customers in unifi areas nationwide. Eligibility status check will be available on unifi.com.my from July 15 onwards.
Lastly, "unlimited" unifi Mobile postpaid plan, which gives customers unlimited data, calls and messaging, will also be relaunched. It serves as a convergence offering exclusive to existing broadband customers.
TM has recently seen its share price on a downtrend following the announcement by new communication and multimedia minister Gobind Singh Deo, who called for broadband players to double the speed at half the price for the subscribers.
At the time of writing, TM's share price jumped by 3.5% or 11 sen to RM3.22, with about 10.9 million shares traded.