KUALA LUMPUR – Telekom Malaysia (TM) is overhauling its 5G strategy by terminating its wholesale agreement with Digital Nasional Bhd (DNB) and entering a new Multi-Operator Core Network (MOCN) arrangement with U Mobile Sdn Bhd.
The transition to the new network is expected to take place over the next few months without any service interruptions.
TM’s group chief executive officer, Amar Huzaimi Md Deris, said the move aligns with the government’s dual network approach, giving the company flexibility to evaluate options that best support its long-term competitiveness and convergence strategy.
He explained that the decision is undertaken in line with legal provisions available to the company and noted that Malaysia’s dual network initiative provides options for TM to select the approach that fits its long-term goals.
“As Malaysia transitions into what the government calls the dual network, this provides TM with options to evaluate what best fits our long-term competitive value and convergence offering,” he said.
TM had previously announced that it would enter into a new 5G MOCN wholesale arrangement with U Mobile. Amar Huzaimi said the move is aimed at strengthening mobile competitiveness and supporting the company’s convergence ambitions.
The company is exercising contractual rights to terminate its existing access agreement with DNB, subject to regulatory approval.
Amar Huzaimi emphasised that the termination would not result in any known penalty.
“The termination of the DNB arrangement will not result in any known penalty for the group, as the move is based on contractual provisions available to TM,” he said.
When asked whether TM has considered acquiring U Mobile, he declined to comment, describing the matter as strategic and market-sensitive.
He added that any material development would be subject to due process and announced accordingly.
“This is a strategic matter and market-sensitive, and any material development will be shared following due process,” he said.
Looking ahead, TM expects a positive outlook for 2026, supported by continued revenue growth and strengthened underlying profitability.
Amar Huzaimi said the company anticipates stable operational performance across its business segments.
“We expect revenue to record a low single-digit increase for the year, while earnings before interest and tax (EBIT) are projected to remain broadly at a similar level to 2025,” he said.
Capital expenditure (capex) intensity is forecast to rise to between 18 per cent and 20 per cent of revenue, higher than previously, as TM accelerates investment to support growth initiatives and infrastructure expansion.
Amar Huzaimi explained that the 2026 capex will be allocated towards broadband expansion, fibre rollout, cloud, digital services, artificial intelligence (AI), graphics processing units (GPUs), and data centres.
“This represents a blend of new investment versus what we have today,” he said.
On dividends, he highlighted TM’s commitment to sustaining its track record.
“As you can see from the past record, we have been performing in terms of dividend payouts, so we wanted to make sure that we are following that trend,” he said.
The group declared a second interim dividend of 14.5 sen per share and a special dividend of 4.0 sen per share for the financial year ended December 31, 2025, both to be paid on March 27, 2026. Total dividends for FY2025 amounted to 31 sen per share, unchanged from the previous year.
In a filing with Bursa Malaysia, TM reported that its net profit for FY2025 fell by 15.1 per cent to RM1.71 billion from RM2.02 billion a year earlier.
The company said the decline was due to the absence of a material one-off tax credit recognised in the previous year, as well as lower EBIT, partially offset by gains from the group’s investment in a technology fund.
“The lower net profit reflects the absence of a material one-off tax credit recognised last year, as well as the lower EBIT,” the company said.
Revenue for FY2025, however, rose by 1.4 per cent, or RM159.6 million, to RM11.87 billion from RM11.71 billion previously, despite challenging conditions across the telecommunications sector.
TM said that for the fourth quarter of FY2025, net profit shrank to RM222.49 million from RM730.63 million a year earlier, while revenue increased by 6.8 per cent to RM3.26 billion from RM3.05 billion. – February 25, 2026