TM cost control Measures Signal Positive Outlook Amid Market Optimism
As of early December 2025 in Kuala Lumpur, Telekom Malaysia Berhad (TM), a key player on the Main Board under stock code 4863, continues to demonstrate effective cost optimization and disciplined capital expenditure (capex) management. This strong focus on TM cost control has fostered growing optimism among investors regarding TM’s capacity to raise dividends in the coming fiscal years. Specifically, the company’s approach to curbing operating expenses, alongside stringent capex oversight, provides a solid foundation for sustained financial health amid rising industry demands.
Recent Developments Outline TM’s Strategic Cost Reduction and Investment Plans
In the third quarter of 2025, TM is scheduled to implement a voluntary separation scheme (VSS) that is expected to further reduce employee-related expenses starting fiscal year 2026. This initiative complements earlier cost-cutting efforts and reinforces the company’s broader TM cost control strategy aimed at enhancing operational efficiency. Moreover, following the peak capital expenditure experienced in 2022 due to the National Digital Network Plan (JENDELA) fibre rollout, TM has successfully maintained capex below 18% of revenue in subsequent years. With fibre service coverage now reaching approximately 9.5 million households nationwide, TM continues to support a stable and sustainable expenditure outlook moving forward.
Official Data Underscores TM’s Sustainable Cash Flow and Dividend Policy Outlook
Analysts from Malayan Banking Investment Bank Research maintain TM’s capital expenditure forecast at approximately RM1.85 billion annually from fiscal years 2025 through 2027, constituting around 15% to 16% of sales—a downward revision from prior projections anticipating an increasing trend. The research team estimates TM’s corporate free cash flow under this model to range between RM1.7 billion and RM1.8 billion per annum. With TM’s dividend payout policy capping at 60%, this equates to dividend disbursements of around RM1.0 billion to RM1.1 billion, comfortably below the free cash flow available.
TM cost control：Market Reactions Reflect Stability Amid Broader Industry Trends
Following these adjustments, the analyst has revised TM’s net profit forecast for fiscal year 2027 upwards by 3%, while reaffirming a “Buy” rating and raising the target share price from RM7.50 to RM8.50. TM’s core business model remains largely unaffected by shifts within Malaysia’s National Digital Network company’s (DNB) equity structure. Concurrently, ongoing expansion in domestic data centre investments provides further structural growth potential, positioning TM as a key beneficiary of the country’s digital economy development.Perspective on the Potential Impact on Malaysia’s Connectivity and Investment Climate
In the shorter term, TM’s proactive cost and capex management may help mitigate operational risks and minimise disruptions to network expansion projects in Selangor, Seri Kembangan, Batu Caves, and other regions. As Malaysia’s data centre investment landscape grows, the company’s strategy aligns with enhancements in connectivity and technology infrastructure. Long-term, these trends are expected to influence engineering standards and investment safety protocols positively across Malaysia’s telecommunications and digital services sectors, though precise outcomes remain contingent on evolving market conditions and regulatory developments.
Location: Kuala Lumpur
Date: 2025-12-04