AmInvestment: telecom operators will benefit from equal access to 5G infrastructure under myDigital
Posted on: Saturday September 11, 2021
Kuala Lumpur: The government’s MyDigital initiative provides licensed telecommunications providers (telcos) equal access to infrastructure to deploy 5G network services nationwide, with Telekom Malaysia ™ to leverage its dominance of fixed-line gaming on the initiative said AmInvestment Bank. In a note on Friday, the bank said the MyDigital initiative involves investing RM 15 billion over 10 years through a fully government-owned Special Purpose Vehicle (SPV) called Digital Nasional, which will own, run and manage the spectrum. and 5G infrastructure. “Therefore, we see this as neutral for cellular operators who will not be burdened by the capital expenditure of 5G.
“However, being the owner of the nationwide broadband fiber network, we believe this is positive for TM and, to a lesser extent, TIME dotCom, providing the essential backhaul system for 5G networks,” said AmInvestment. He also said the government’s initiative is expected to start in stages by the end of the year. “The government has also given conditional approvals to Microsoft, Google, Amazon and TM to build and manage large-scale data centers as well as to provide hybrid cloud services, valued between RM12 and 15 billion over the past five years. coming years. “While this will benefit TM’s business-to-business arm, TM One’s data center operations, it expects TM to build on its dominance of fixed gaming provided by its nationwide fiber optic network and extensive partnerships. to support the construction of third-party data centers, thereby partially alleviating the high capital expenditure requirements, ”he said. The investment bank maintained an ‘overweight’ rating on the sector with a call to ‘buy’ for TM, which showed significant cost improvements and is poised for better prospects as part of the government’s MyDigital initiative .
He said the telecom company’s financial performance for the first half of 2021 was in line with his expectations, despite higher employee-related resizing costs and lower sales of unassailable rights-of-use flat-rate contracts that weighed on on TM’s net income in the second quarter of 2021 (2Q2021). In 2Q2021, Maxis’ pole position in terms of subscriber market share increased slightly to 37.5%. “In addition to its continued lead in the postpaid services segment, Maxis also maintained its leading position in the prepaid services category with a market share of 36%; although lower than 38% in 2Q2020, the other operators having gained momentum in this segment. “Nonetheless, Maxis’ strategy of convergence and orientation of postpaid subscribers with its fiber optic broadband services has proven to be effective with a stable mixed average revenue per user in 2Q2021 of RM47 per month. AmInvestment has downgraded Maxis from “hold” to “buy” given the recent rally in the stock price which currently gives a slight six percent rise in the bank’s unchanged fair value of RM 5.00 per share.