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Asia's emerging communications leader intent on consolidating its position in Asia's boom sector

2007-02-28

Asia's emerging communications leader intent on consolidating its position in Asia's boom sector

28 Feb 2007, Kuala Lumpur -- Telekom Malaysia Berhad (TM), the emerging leader in Asian communications with operations in nine Asian countries, reiterated its commitment as a strategic investor in markets such as Indonesia, India, Singapore, Cambodia, Thailand, Bangladesh, Sri Lanka and Pakistan and at the same time, build strong domestic brands within these markets.

In 2007, TM will adopt a two-pronged strategy; firstly, to consolidate its leading position in existing regional markets, and secondly, study all new commercial opportunities in Asia in detail, with great focus on the Indochina market, in order to grow its existing regional footprint.

"Apart from managing and growing our investments in boom markets such as India and Indonesia, two of the fastest growing mobile markets in the world, we will adopt a strategy of consolidation and growing our existing investment portfolio throughout Asia," according to Yusof Annuar Yaacob, Chief Executive Officer of TM International, TM's overseas investments holding arm.

Speaking at the sidelines of the Asian communications giant's hosting of a regional media visit to its headquarters in Kuala Lumpur today, Yusof says that TM International will give particular focus on the dynamic economies of Indochina, adding these markets have great growth potential in the telecommunications sector.

"We continue to post strong, consistent growth in our operations in Cambodia via our 100-percent owned domestic operator Hello 015&016. Cambodia as of now has about 600,000 mobile subscribers with just 4 percent mobile penetration rate," he adds.

The potential for growth in Vietnam is also staggering; with a population of 80 million people, mobile penetration rate is expected to achieve 17 percent in 2009, with this level expected to rise further with greater liberalization in the telecommunications sector, and reforms expected in the wake of the country's recent accession to the WTO.

"With a large population size, low teledensity and strong government commitment to the development of the telecommunications industry, Vietnam is an attractive investment consideration for TM," Yusof says.

"We continue to post strong, consistent growth in our overseas operations. In Indonesia and India, Bangladesh and Pakistan, TM is well positioned to offer vast resources to drive expansion in these countries which are already considered as some of the fastest growing mobile markets in Asia."

TM, headquartered in Kuala Lumpur, Malaysia, attributes this significant growth in the telecommunications sector in Asia to pent-up demand for communications services in emerging countries throughout the region, fast liberalization of the industry, as well as improving economic growth which in turn boosts the Asian population base's purchasing power. The company recently announced a regional mobile subscriber base of 26.5 million as at end-September 2006, up 63% from the same period last year. The company also stated that it had increased its capital expenditure for its international operations and spent more than USD400 million in the first nine months of 2006.

Yusof says TM subsidiaries' willingness to inject more funds into marketing activities and rolling out innovative products and services in high-growth markets such as Indonesia, Bangladesh, Sri Lanka and Cambodia are also reaping returns for TM.

TM has a string of subsidiaries in Asia where it has substantial equity control over several key mobile operators such as Sri Lanka's Dialog Telekom Limited (87.7 percent), Indonesia's Excelcomindo/XL (59.7 percent), Bangladesh's TM International Bangladesh/AKTEL (70 percent) and Cambodia's TM International Cambodia (TMIC)/Hello (100 percent).

Just last year, TM acquired a 49 percent stake in one of India's fastest growing mobile operator Spice Communications Pvt Ltd, ensuring the company's reach extends into one of the world's fastest growing mobile markets. India adds about 5 million new mobile subscribers every month. Other key investments during 2006 includes USD29 million to raise its stake in Cambodia to 100 percent, and USD32.8 million to acquire a 24.4 percent stake in Samart I-Mobile.

TM which is an emerging leader in the Asian communications space is pleased with the progress of its international operations. TM via its local subsidiaries holds market leadership positions in key markets it is in. In the last 5 years, its Sri Lankan subsidiary Dialog Telekom has moved to the number 1 spot, whilst its Bangladesh subsidiary TMIB has captured the number 2 position. Both its Indonesian as well as Cambodian operations are in number 3 position.

Yusof says: "We will further establish our position in regional markets where we have a strong presence through execution of strategies and harnessing cross border synergies within TM's portfolio of investments. TM will adopt an opportunistic approach and pace its international expansion."

With a combined population of nearly two billion across the nine Asian markets TM is present in, the company is confident of making further inroads where it has a presence and invested substantially in. Through its investment arm TM International, the company's total initial investment to date stands at USD1.44 billion in the communications business across Asia, and is focusing on quick and efficient execution of specific strategies catered for individual countries, so as to enhance the value of investments as well as boost returns.

About TM

Telekom Malaysia Berhad (TM), a leading regional information and communications group, offers a comprehensive range of communication services and solutions in fixed-line, mobile, data and broadband. As one of the largest listed companies on Bursa Malaysia with an operating revenue of more than RM13 billion, TM is driven to deliver value to its stakeholders in a highly competitive environment.

The Group places emphasis on continuing customer service quality enhancements and innovations. Currently, with investments and operations in 13 countries around Asia and globally, TM is focused on sustainable growth in both the local and international markets.

For further information on TM, visit www.tm.com.my