Telekom Malaysia Bhd: Navigating Challenges and Seizing Opportunities in 2025

In the dynamic landscape of telecommunications, Telekom Malaysia Bhd (TM) continues to play a pivotal role as a leading provider in Malaysia. As the company approaches the release of its first-quarter financial results for 2025, stakeholders are keenly observing its performance amidst evolving market conditions.

Financial Performance Overview

TM’s first-quarter results for 2025 reveal a mixed financial picture. The company reported a net profit of RM401.25 million, a slight decrease from RM424.81 million in the same period last year. This 5.5% drop in net profit is attributed to increased costs associated with 5G access and higher device expenses, despite a marginal revenue increase of 0.5% to RM2.85 billion. These figures reflect the broader industry trend of significant investments in next-generation network infrastructure, which, while essential for long-term growth, exert pressure on short-term profitability.

Strategic Partnerships and Future Prospects

A key highlight for TM in 2025 is its strategic partnership with U Mobile. This collaboration, valued at RM2.4 billion over ten years, positions TM as U Mobile’s primary fibre backhaul partner, facilitating the accelerated deployment of U Mobile’s 5G network across Malaysia. This partnership not only underscores TM’s expertise in providing robust backhaul infrastructure but also promises to bolster its revenue streams, with projections indicating a potential earnings boost of RM100 million to RM230 million in the financial years 2026 and 2027.

Market Position and Analyst Insights

Despite the challenges, TM’s market position remains strong, with a market capitalization of RM27.32 billion and a price-to-earnings ratio of 13.55. Analysts have set an earnings per share (EPS) forecast of 0.104 MYR for the latest quarter, slightly below the previous year’s figure of 0.110 MYR. This cautious outlook reflects the transitional phase TM is navigating as it invests in future technologies and infrastructure.

Conclusion

As Telekom Malaysia Bhd continues to adapt to the rapidly changing telecommunications landscape, its strategic initiatives, particularly the partnership with U Mobile, are poised to drive future growth. While the company faces short-term financial pressures, its long-term prospects remain promising, supported by a strong market presence and a commitment to innovation. Stakeholders will be watching closely as TM executes its strategy to capitalize on emerging opportunities in the 5G era.