TM’s Q1 2025 Performance: Navigating a Dynamic Market Towards Digital Leadership
Telekom Malaysia Berhad (TM), a household name in Malaysia’s telecommunications landscape, has just released its financial results for the first quarter ended 31 March 2025. This report offers a glimpse into how the Group is performing amidst an ever-evolving market, highlighting both steady growth in certain areas and challenges in others. While the topline saw a modest increase, the Group’s profit after tax and non-controlling interests (PATAMI) experienced a slight decline. Let’s dive into the details to understand the driving forces behind these numbers and what they mean for TM’s journey towards becoming a digital powerhouse.
Key Takeaways from Q1 2025:
- Operating Revenue saw a slight increase, driven by data and education segments.
- Fixed Broadband Subscribers continued to grow, reinforcing TM’s convergence leadership.
- Despite topline growth, PATAMI experienced a modest year-on-year decline due to various factors.
- Strategic capital expenditure focuses on expanding crucial digital infrastructure.
Core Financial Highlights: A Closer Look
TM’s first quarter performance demonstrates resilience, with key indicators showing mixed results but a clear strategic direction. Here’s a breakdown of the numbers:
Revenue Performance
The Group’s operating revenue showed a positive uptick, primarily bolstered by increased contributions from data services, other telecommunication services, and the education segment. This indicates a diversified growth strategy beginning to bear fruit.
Q1 2025 Operating Revenue
RM2.85 billion
Q1 2024 Operating Revenue
RM2.836 billion (approx.)
+0.5% year-on-year growth
Profitability Indicators
While revenue saw growth, the Group’s profitability metrics faced some headwinds. Earnings Before Interest and Tax (EBIT) stood at RM550.3 million. The Profit After Tax and Non-Controlling Interests (PATAMI) experienced a year-on-year decline, which the report attributes to a shift in 5G access costs recognition, higher device costs linked to stronger device revenue, and unfavourable foreign exchange movements. However, this decline was partially mitigated by lower net finance costs.
Q1 2025 PATAMI
RM401.2 million
Q1 2024 PATAMI
RM425.0 million (approx.)
-5.6% year-on-year decline
Strategic Capital Expenditure (CAPEX)
TM continues to invest significantly in its digital infrastructure, with CAPEX for the quarter reaching RM280.0 million, representing 9.8% of its revenue. This investment is crucial for expanding digital infrastructure, including data centres, domestic fibre networks, and submarine cable systems, all vital components for a robust digital ecosystem.
Q1 2025 CAPEX
RM280.0 million
CAPEX as % of Revenue
9.8%
Subscriber Growth
A positive highlight is the continued growth in fixed broadband subscribers, increasing by 1.6% year-on-year to reach 3.185 million. This growth is largely driven by the attractive Unifi UniVerse bundled offerings, which integrate home internet, mobile, content, and lifestyle solutions, reinforcing TM’s position as a convergence champion.
Business Unit Performance: Driving Digital Transformation
TM’s performance is underpinned by its distinct lines of businesses, each playing a crucial role in the Group’s overall strategy:
B2C (Unifi): Strengthening Convergence Leadership
The B2C segment, primarily driven by Unifi, recorded RM1.39 billion in revenue for Q1 2025. It continues to lead in convergence offerings, with the aforementioned growth in fixed broadband subscribers. The focus on Unifi UniVerse bundles highlights TM’s commitment to delivering seamless integrated solutions. Furthermore, Unifi Business continues to support over 400,000 MSMEs nationwide with tailored digital solutions, demonstrating a strong commitment to empowering small and medium-sized enterprises.
B2B (TM One): Empowering Enterprises and Government
TM One, the Group’s B2B arm, achieved RM668.7 million in revenue for Q1 2025. This segment saw positive growth in its ‘Beyond Connectivity’ offerings, driven by stronger performance in customer projects, outsourcing business, and ICT services, including cloud and cybersecurity. As the national cloud provider, TM One is pivotal in driving digital transformation across enterprise and public sectors through secure and scalable cloud infrastructure. Its “TM One NEXT Series” events also underscore its commitment to fostering digital adoption across various industries.
C2C (TM Global): Positioning Malaysia as a Regional Digital Hub
TM Global, the wholesale and international business segment, delivered a robust performance with revenue reaching RM760.9 million in Q1 2025, a 2.4% year-on-year increase. This growth is primarily fueled by higher international data revenue and increasing demand for data centre services. Domestically, TM Global is crucial for supporting 5G rollout through mobile backhaul and enhancing last-mile delivery. Internationally, it has secured significant long-term capacity requirements from global carriers and expanded its data centre co-location services, reinforcing Malaysia’s strategic position as a digital hub in ASEAN, notably with the introduction of sovereign GPU-as-a-Service (GPUaaS) to support Malaysia’s AI ecosystem.
Risks and Prospects: Navigating the Future
TM operates in a dynamic and competitive telecommunications landscape. While the Group has shown steady performance, it acknowledges the evolving market conditions. The shift in 5G access costs recognition and foreign exchange movements highlight some of the external factors that can impact profitability. However, TM’s strategic focus on expanding digital infrastructure and strengthening its core businesses positions it well to capitalize on emerging opportunities.
The Group’s strategic priorities are aimed at long-term value creation. This includes continued investment in data centres, GPU-as-a-Service, cloud solutions, and smart services. These efforts are not just about business growth but also align with nation-building commitments, such as talent development, community initiatives, and digital empowerment, ensuring digital inclusivity for all Malaysians. The recent collaboration with U Mobile for high-capacity 5G fibre backhaul demonstrates TM’s capability to deliver at scale and speed, reinforcing its role as a key enabler in Malaysia’s digital transformation journey.
TM maintains a confident outlook, driven by disciplined execution, strategic investments, and a forward-looking approach to value creation. The ambition to become a Digital Powerhouse by 2030 and position Malaysia as the digital hub of ASEAN remains a core driver.
Summary and
TM’s Q1 2025 report paints a picture of a company with strong fundamentals, demonstrating steady topline growth and continued subscriber expansion despite some profitability pressures. The strategic focus on digital infrastructure, convergence offerings, and enterprise solutions positions the Group to leverage the increasing demand for connectivity and digital services in Malaysia and the region. The commitment to nation-building through digital inclusivity further strengthens its long-term vision.
Key points to consider from this report:
- Resilient Revenue Growth: Despite market dynamics, TM achieved a modest revenue increase, indicating a stable demand for its services.
- Subscriber Momentum: Continuous growth in fixed broadband subscribers highlights the success of its convergence strategy and customer retention efforts.
- Strategic CAPEX: Significant investment in digital infrastructure underscores TM’s commitment to future growth and its role in Malaysia’s digital economy.
- Profitability Headwinds: The decline in PATAMI due to factors like 5G access costs and foreign exchange movements warrants attention, though partially mitigated by lower finance costs.
- Future-Oriented Strategy: TM’s focus on data centres, AI-powered solutions, and cloud services aligns with global digital trends, setting the stage for potential future opportunities.
While this analysis provides an overview of TM’s performance, it is important for individual investors to conduct their own thorough research and consider their personal financial goals before making any decisions. This report is for informational purposes only and does not constitute investment advice.
What are your thoughts on TM’s Q1 2025 performance? Do you believe their strategic investments in digital infrastructure and convergence will lead to sustained growth in the coming years? Share your insights and perspectives in the comments below!
