Monday, February 6

Positive on TM, TNB’s joint venture to expedite Nationwide Fiberisation Plan

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KUCHING: Analysts are positive on Telekom Malaysia Bhd (TM) and Tenaga Nasional Bhd (TNB) signing a memorandum of understanding (MoU) to jointly develop an implementation plan to deliver and expedite the government’s Nationwide Fiberisation Plan (NFP).

In a Bursa filing on Tuesday (January 16), TM said the collaboration with TNB is set to capitalise on the combined strengths of both government-linked companies (GLCs) in terms of reach, infrastructure and expertise. Thus allowing for the most efficient cost structure and further accelerating the reach of the NFP.

According to AmInvestment Bank Bhd (AmInvestment Bank), the collaboration may involve tapping into the sharing of resources between the two GLCs such as existing fibre network, control centres, other transmission systems and building facilities of both companies.

“This is in line with the government’s aspiration to drive the country’s digitalisation under the NFP as well as TM’s own RM11 billion High Speed Broadband (HSBB) project.

“The proposed network will also retain the existing open access participation of industry players to promote private sector competition in retail broadband.

“We expect that TM’s expertise in rolling out HSBB and now HSBB2 to the suburban and rural areas may expedite this second proposed fibre rollout to underserved segments and markets,” said the bank.

TM said the synergies will enable the most efficient cost structure, and further accelerate the fibre broadband network reach.

“This is in line with the government’s aspirations to drive malaysia’s digital economy as envisioned under both the NFP, as well as the high-speed broadband (HSBB) projects,” it said.

Further, the roll out under TM and TNB, as two of Malaysia’s leading institutions, would ensure the safety and security of the nation’s strategic and critical infrastructure.

The proposed network will also continue the existing open access participation of industry players to promote private sector competition in retail broadband.

The MoU was signed by Datuk Sri Mohammed Shazalli Ramly, managing director/group chief executive officer of TM, and Datuk Seri Ir. Azman Mohd, president/chief executive officer of TNB.

The MoU is subject to a definitive agreement to be signed between the parties upon finalisation of the commercial terms and further announcements will be made in due course, as and when appropriate.

Ultimately, consumers are expected to gain the most benefit from the acceleration of the NFP as there are many rural areas that still do not have high-speed broadband while urban areas are supplied with broadband services that are incomparable against other countries in terms of pricing and network quality.