KUCHING: Telekom Malaysia Bhd ( TM) recently announced that its Unifi base has risen above 200,000 as of end November, beating the company’s own expectations.
“Its subscriber addition of 55,000 in the third quarter of 2011 was a record and above the 46,000 netted in the second quarter,” OSK Research Sdn Bhd (OSK Research) revealed in its research report.
With the average run-rate of 5,000 per week likely to extend into December, the research house believed that Unifi’s projected take-up of 20 per cent far exceeded TM’s earlier articulated threshold of eight per cent to 10 per cent.
As such, the research house expressed optimism on Unifi achieving its targeted 50 per cent penetration over the next three years, even with added competition from Maxis Bhd’s (Maxis) Fibre to the Home (FTTH).
“We do not view Maxis as an immediate threat as it is unlikely to go head-on with TM,” the report stated.
It was also unconcerned of cannibalization of TM’s Streamyx business by Unifi , seeing that it was still recording strong double-digit growth of 10 per cent year-on-year in the non-Unifi areas.
According to TM, 413,000 of its Streamyx subscribers were in the Unifi zone and up to 40 per cent of the Unifi takers were upgraders from Streamyx.
OSK Research projected that TM’s wholesale revenue would grow at a compound annual growth rate of 15.3 per cent for fi nancial years 2011 to 2013, driven by the rollout of FTTH last October and a similar agreement it had struck with P1.
“Revenue contribution from wholesale was projected to widen from nine per cent in fi nancial year 2010 to 10 per cent in financial year 2012, buffering the erosion in fi xed line revenue,” added the research house.
TM had a track record of returning surplus cash in the past, following the monetisation of the non-core assets. While there was a lower probability of sizeable asset disposals in the near future, OSK Research noted that its stronger operating cash fl ow could still see TM surprising on the upside in terms of dividend.
Thus, it did not rule out possibility of management dishing out another special dividend for fi nancial year 2011 as it pegged a higher target price of RM5.15 per share for TM.