KUALA LUMPUR: Telekom Malaysia's (TM) move to lower prices of its retail fibre broadband plans is viewed as a speed upgrade and should allow the company to sustain its fibre broadband revenue.
Maybank Investment Bank Bhd said TM had pre-emptively lowered prices of the plan and based on the price design, the firm viewed this effectively as a speed upgrade and remained hopeful that its average revenue per user (ARPU) would be largely maintained.
"The revised plans would also require access seekers to commit to higher volume, possibly negating the impact of lower unit prices," it said in a note.
The lowest 300 megabyte per second (mbps) plan is now only available as a "Rahmah" initiative.
The 100Mbps plan is lowered to RM99 per month (from RM129) along with an incremental RM10 per month limited-time discount, while the 300Mbps plan is lowered to RM139 per month (from RM149). Prices for the remaining higher-speed plans are reduced by 17-24 per cent.
Separately, TM will offer a complimentary speed upgrade to the next speed tier for existing users of the 800Mbps plans and below, to be rolled out in stages over the next three months.
"TM has not yet made any announcement on the finalisation of commercial negotiations with access seekers. "We note that Maxis has not yet made any revisions to its fibre broadband package prices at the time of writing.
"In our view, TM's product revisions would mean access seekers would have to commit to higher volumes, thus potentially offsetting the impact of lower unit prices," it added.
The firm reiterated its "Buy" call on the stock with an unchanged target price of RM6.50.
"We continue to expect TM to largely sustain its fibre broadband revenue (both retail and wholesale) through the offering of higher-speed plans. "Affirmation of this thesis would only manifest in the first half of 2024, in our view."
