KUALA LUMPUR (Oct 24): Telekom Malaysia Bhd's (TM) existing home customers will see an upgrade in their broadband speed next year, in line with the announcement in Budget 2017.

“We welcome the recent announcement by our prime minister of the government’s aspiration to make high speed broadband access more affordable to the rakyat. The budget addresses specific measures to strengthen and advance the digital economy with the aim of enhancing the country’s prosperity in a balanced, fair and inclusive manner,” TM group chief executive officer Tan Sri Zamzamzairani Mohd Isa told a press conference today.

In last Friday's budget announcement, Prime Minister Datuk Seri Najib Razak said effective January 2017, fixed line broadband service providers will offer services at a higher speed for the same price.

The “Broadband Improvement Plan” announced today will initially benefit TM’s home customers in the high speed broadband (HSBB) and sub-urban broadband (SUBB) project areas.

Under the initiative, the average broadband speeds for residential UniFi customers will be doubled at the same price. Eligible customers nationwide will begin enjoying the upgrades in stages, starting from January 2017. In addition, TM will also be introducing a greater value broadband package offering for non-UniFi customers next year.

However, TM chief financial officer Datuk Bazlan Osman said he doesn't see any impact on the group's capital expenditure due to additional costs incurred from the upgrades as the infrastructure in TM is well supported by HSSB 2 and SUBB projects.

Bazlan also said the average revenue per user (ARPU) is not expected to fall despite these free upgrades in speed as TM expects the overall user experience and added services will be the game changer.

“The announcement made during the tabling of Budget 2017 was timely, as TM has already embarked on the initiative to upgrade the broadband speeds of our existing customers in April this year when we launched our UniFi PRO Plan offering 100 Mbps alongside other value-added offerings,” TM executive vice-president of consumer and small and medium enterprise Imri Mokhtar added.

Imri also shared that Budget 2017 and “Broadband Improvement Plan” simply accelerates the upgrade process by extending it to more customers, according to customers’ eligibility and depending on the technical availability of the services at different areas.

To date, TM has more than 2.37 million broadband customers, of whom over 900,000 are UniFi customers. More than 60% of TM’s broadband customers are now on packages of 4Mbps and above, while approximately 68% of UniFi customers are on packages of 10Mbps and above, reflecting the current consumption and behaviour patterns of TM’s customers today.

As at 4.21pm, TM shares fell 1.79% to RM6.59, with 10.2 million shares traded. At this price, TM was trading at a trailing P/E of 30.2 times, with a market capitalisation of about RM24.8 billion.