TM's Wholesale Business To Remain Key Growth Driver -- Rhb IB

KUALA LUMPUR, July 17 (Bernama) --  Telekom Malaysia Bhd’s (TM) wholesale segment is expected to remain its key growth driver, supported by 5G fibre backhaul, data centre co-location and connectivity services, as well as the commissioning of new sub-sea cables, said RHB Investment Bank Bhd (RHB IB).

In a note today, the investment bank said TM management sees scope for further operating expenditure (opex) optimisation, with the migration into U Mobile’s 5G network likely to take place by the third quarter of financial year 2026 (3Q FY2026).

“With stronger net infrastructure cost savings in the medium term, ongoing cost efficiencies and a potentially lower staff redundancy cost, there is upside risk to TM’s FY2026 earnings before interest and taxes guidance,” it said.

RHB IB said TM’s retail fibre subs base was flat quarter-on-quarter in 1Q FY2026, due to elevated competition and some seasonality.

Internet revenue, however, grew year-on-year for the second straight quarter, supported by improved product bundles and higher device adoption, with average revenue per user (ARPU) up four per cent.

“We expect its internet revenue momentum to improve further in the second half of 2026 from incremental ARPU uplifts, aided by the introduction of the new Home Pro campaign in June, which allows existing customers to upgrade to higher-speed plans with attractive device bundles.

“This comes ahead of the potential (earlier deferred) revision in access prices by end-2026,” it added.

Overall, it projects TM’s data centre business to post robust double-digit revenue growth in FY2027-2028 from the expanded capacity. 

Hence, the investment bank maintained its ‘buy’ call on TM, with a target price of RM9.30.

At 10.47 am, the counter rose one sen to RM7.59 with 722,100 shares traded.

-- BERNAMA