Telekom Malaysia Berhad (TM)

Telekom Malaysia Berhad (TM) — Malaysia's Digital Backbone

If you're looking for a stock that truly represents core national infrastructure, Telekom Malaysia (TM) is the answer. TM is not just any telecommunications company — it owns and operates a 740,000km fibre optic network spanning all of Malaysia, something no competitor can replicate in the near term.

Founded in 1984, TM has transformed from a government telephone company into a digital convergence player offering broadband (Unifi), enterprise (TM One), and international services (TM Global). Khazanah Nasional, the government's sovereign wealth fund, is the major shareholder — making TM the most important government-linked company (GLC) in Malaysia's telecommunications sector.

Three Core Business Segments

• Unifi (B2C): The largest segment — broadband, Unifi Mobile, and Unifi TV services to individual consumers. Over 3.13 million fixed broadband subscribers. Quad-Play strategy (broadband + mobile + telephone + TV) being strengthened.
• TM One (B2B Enterprise): Enterprise solutions across 7 key industries — Banking & Finance, Oil & Gas, Real Estate, Healthcare, Education, Defence & Security, and Public Services. Revenue ~RM3.1b.
• TM Global (International): International data services, international bandwidth, data centres. Recorded 30Tbps YoY bandwidth growth and delivered 35Tbps+ connectivity to a US hyperscaler. Revenue ~RM3.1b.

📊 Shariah Status: ✅ Shariah Compliant — TM is listed on the SC Malaysia Shariah Compliant Securities List. Suitable for Muslim investors.

Recent Corporate Events 2025-2026

• Feb 25, 2026 — Exit from DNB, Switch to U Mobile: TM terminated its 5G access agreement with Digital Nasional Berhad (DNB) and entered a new 5G MOCN arrangement with U Mobile. This is a strategic move that will significantly reduce TM's 5G access costs from 2026 onwards.
• May 2025 — RM2.4b Fibre Deal with U Mobile: TM will provide fibre infrastructure, data centre access, and network connectivity to U Mobile to accelerate their 5G rollout (targeting 80% population coverage by July 2026).
• Mar 9, 2026 — EPF Buys 928,800 TM Shares: Purchase by the Employees Provident Fund (EPF) — a positive signal from Malaysia's largest institutional investor.

Revenue up, reported profit dented by one-off costs

In Q2 FY2026 (ended 30 Jun 2026) TM posted revenue of RM2.96 billion (up 6.8% YoY) and net profit of RM365.5m (down 9.3% YoY). Operating costs rose 12.1% to RM1.93 billion on the Prihatin scheme and World Cup sponsorship. Underlying profit rose 4.6% to RM406.3m.

Note: Q3 FY2025 and Q4 FY2024 include large one-off items, so do not compare them directly with the current quarter.

For 1H FY2026, revenue was RM5.90 billion (up 4.8%), underlying profit RM842.6m (up 7.0%) and reported profit RM687.0m. 1H capex was only RM555.7m (9.4% of revenue) against full-year guidance of 18-20%, so spending will peak in 2H.

Solid dividend with a 75-80% payout policy

TM declared a second interim dividend of 7.0 sen per share for FY2026 (payable 18 Sep 2026). With the 6.5 sen first interim, 1H FY2026 dividends total 13.5 sen, about 75% of reported profit. Trailing yield is about 3.5% at RM7.9, and forward yield is higher if the payout ratio holds.

• Dividends are funded from operating profit and cash flow, not reserves.
• Low net debt supports sustainability.