TM earnings growth forecast to accelerate

Telekom Malaysia's anticipated earnings growth is primarily linked to strategic expansion in its wholesale connectivity business, particularly data centres (DCs) and submarine cables. MBSB Research specifically forecasts faster growth for TM Global, which manages these operations. Expected contributions include the Klang Valley and Iskandar Puteri Data Centres, alongside the upcoming TM Nxera artificial intelligence-ready DC. Further growth is anticipated from submarine cable projects like the Asia Link Cable, scheduled for service in mid-2027, and the Candle system in 2028.

Beyond wholesale infrastructure, TM's consumer broadband segment, unifi, is expected to maintain resilience. This segment, which contributed 49.3% of group revenue in Q2 2026, is supported by a stable subscriber base and an increase in average revenue per user (Arpu). MBSB Research attributes the Arpu appreciation to effective "converge strategies" and content or device bundling initiatives, indicating a focus on enhancing customer value.

Profitability is also projected to improve through enhanced cost efficiencies. MBSB Research anticipates a reduction in TM’s cost-to-revenue ratio, partly due to eased staff expenses following a voluntary separation scheme. Additionally, a decline in 5G-related costs is expected as unifi Mobile services transition from Digital Nasional Bhd to U Mobile's network, contributing to a more favorable cost structure for the group.