ENG - Telekom Malaysia

Transcription

2
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A
n
n
u
a
l
R
T E L E K O M M A L AY S I A B E R H A D
(128740-P)
e
p
o
r
t
Opening Up
Possibilities
From wireline to wireless
Mankind we serve
From one 'Hello' to another
Our lives connect
From ‘Apa Khabar?’ to ‘What’s Up?’
Communication evolves
From one simple greeting
Time and space dissolve
From one connection to another
Races and cultures unify
From land, sea or air
Oceans bridged, continents linked
From the power of connections
Businesses flourish, relationships blossom
From one single touch
Immense possibilities unfold
From one single company
Everyday, in so many ways
We’re Opening Up Possibilities
Our
vision
VISION
Our vision is to be the Communications Company of choice
– focused on delivering Exceptional Value to our customers and other stakeholders.
Our
mission
MISSION
To achieve our vision, we are determined to do the following:
•
Be the recognised leader in all markets we serve
•
Be a customer-focused organisation that provides one-stop total solution
•
Build enduring relationships based on trust with our customers and partners
•
Generate shareholder value by seizing opportunities in Asia Pacific and other selected regional markets
•
Be the employer of choice that inspires performance excellence
contents
Notice of Annual General Meeting
3
Financial Calendar
5
Statement Accompanying
the Notice of Annual General Meeting
6
Five-Year Group Financial Highlights
8
Group Financial Performance 2002
10
Group Analysis
10
Business & Other Statistics
12
Group Financial Review
14
Group Structure
18
Corporate Information
20
Profile of the Board of Directors
22
Group Business Committee
32
•
Multimedia Services – TM Net Sdn. Bhd.
Box Article 3
– e-Community
•
International Operations – TM International
Sdn. Bhd.
•
Facilities Management – TM Facilities Sdn. Bhd.
Box Article 4
– Implementation of Electronic
Government in Malaysia (EG*Net)
92
98
104
110
114
Other Subsidiaries
120
Educational Excellence
130
Human Resource
136
Customer Relationship Management
138
Risk Management
142
Research and Development
145
Corporate Governance Statement
34
Additional Compliance Information
41
Environment, Occupational Safety and
Health Initiatives
148
Audit Committee Report
44
Our Contributions to The Nation
154
Statement on Internal Control
48
Awards & Recognition
159
Chairman’s Statement
52
Highlights of the Year 2002
160
Chief Executive’s Statement
56
Corporate & Social Responsibilities
169
Operations Review
•
•
Fixed Line Services – TM TelCo
Box Article 1
– Business Networking TM-IPVPN:
The New Frontier in Networking Solutions
66
74
Cellular – TM Cellular Sdn. Bhd.
Box Article 2
– Online Transactions and Mobile Banking
80
86
Reports and Financial Statements
178
Shareholding Statistics
245
List of Top 30 Shareholders
246
Shareholders and Investor Information
248
Net Book Value of Land & Buildings
249
Usage of Properties
250
Group Directory
251
Proxy Form
•
NOTICE IS HEREBY GIVEN THAT the Eighteenth Annual General Meeting
of the Company will be held at 10:00 a.m., on Tuesday, 20 May 2003 at
the Legend Grand Ballroom, 9th Floor, The Legend Hotel, 100 Jalan Putra,
50350 Kuala Lumpur, for the following purposes:-
notice of annual general meeting
1.
To receive, consider and adopt the audited Accounts for the year ended 31 December 2002 together with the Reports of the Directors
and Auditors thereon.
2.
To approve the declaration of a final dividend of 10 sen per share (less 28% Malaysian Income Tax) in respect of the year ended
31 December 2002.
3.
(Ordinary Resolution 1)
To re-elect the following Directors retiring pursuant to Article 103:(i)
Dato’ Dr. Abdul Rahim bin Haji Daud
(ii)
Dato’ Dr. Md Khir bin Abdul Rahman
4.
To approve the Directors’ fees and remuneration.
5.
To appoint the retiring Auditors and to authorise the Directors to fix their remuneration.
6.
As SPECIAL BUSINESS
To consider and if thought fit to pass the following Ordinary Resolution:-
Authority to Allot and Issue Shares
“THAT subject to the Companies Act 1965 (“the Act”), the Articles of Association of the Company, approval from the Kuala Lumpur
Stock Exchange (“KLSE”) and other Government or regulatory bodies, where such approval is necessary, full authority be and is
hereby given to the Board of Directors pursuant to Section 132D of the Act, to issue shares in the capital of the Company at any
time upon such terms and conditions and for such purposes as the Directors may in their discretion deem fit provided always that
the aggregate number of shares to be issued, shall not exceed 10% of the issued share capital of the Company.”
7.
To transact any other business of the Company of which due notice has been received.
FURTHER NOTICE IS HEREBY GIVEN THAT a Depositor shall be eligible to attend this meeting only in respect of:(a)
Shares deposited into the Depositor's Securities Account before 12:30 p.m. on 9 May 2003 (in respect of shares which are exempted
from Mandatory Deposit);
(b)
Shares transferred into the Depositor’s Securities Account before 4:00 p.m. on 9 May 2003 in respect of Ordinary Transfer;
(c)
Shares bought on the KLSE on cum entitlement basis according to the Rules of the KLSE.
3
notice of annual general meeting
Shareholders are reminded that pursuant to the Securities Industry (Central Depositories) (Amendment No. 2) Act, 1998 (“SICDA”) which
came into force on 1 November 1998, all shares not deposited with Malaysian Central Depository Sdn. Bhd. (“MCD”) by 12:30 p.m. on
1 December 1998 and not exempted from Mandatory Deposit, have been transferred to the Minister of Finance (MOF). Accordingly, the
eligibility to attend this Meeting for such undeposited shares will be the MOF.
NOTICE OF BOOK CLOSURE FOR PAYMENT OF DIVIDENDS
NOTICE IS ALSO HEREBY GIVEN THAT the Register of Members will be closed from 29 May 2003 to 30 May 2003 (both dates inclusive)
to determine the Shareholders’ entitlement to the dividend payment. The dividend, if approved by the shareholders at the Company’s
Eighteenth Annual General Meeting, will be paid on 23 June 2003 to shareholders whose names appear in the Register of Depositors on
28 May 2003.
FURTHER NOTICE IS HEREBY GIVEN THAT a Depositor shall qualify for dividend entitlement only in respect of:(a)
Shares deposited into the Depositor’s Securities Account before 12:30 p.m. on 26 May 2003 (in respect of shares which are exempted
from Mandatory Deposit);
(b)
Shares transferred into the Depositor’s Securities Account before 4:00 p.m. on 28 May 2003 in respect of Ordinary Transfer;
(c)
Shares bought on the KLSE on a cum entitlement basis according to the Rules of the KLSE.
Shareholders are reminded that pursuant to SICDA, all shares not deposited with MCD by 12:30 p.m. on 1 December 1998 and not
exempted from Mandatory Deposit, have been transferred to the MOF. Accordingly, the dividend for such undeposited shares will be paid
to MOF.
By Order of the Board
WANG CHENG YONG (MAICSA 0777702)
ZAITON AHMAD (MAICSA 7011681)
Secretaries
Kuala Lumpur
28 April 2003
4
Notes:
1. A member entitled to attend and vote at the above Meeting is entitled to appoint a proxy to attend and vote in his stead. A Proxy need not be a member
of the Company and the provisions of Section 149(1)(b) of the Act shall not apply to the Company.
2.
A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting provided that where a member of the
Company is an authorised nominee as defined in accordance with the provisions of the Securities Industry (Central Depositories) Act 1991, it may appoint
at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities
account.
3.
Where a member appoints two (2) proxies, the appointments shall be invalid unless the proportion of the holding to be represented by each proxy is
specified.
4.
This instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly appointed under a power of attorney or if
such appointee is a corporation, either under its common seal or under the hand of an officer or attorney duly appointed under a power of attorney.
5.
A corporation which is a member, may by resolution of its Directors or other governing body authorise such person as it thinks fit to act as its
representative at the Meeting, in accordance with Article 92 of the Company's Articles of Association.
6.
This instrument appointing the proxy must be deposited at the office of the Share Registrar, Tenaga Koperat Sdn Bhd, 20th Floor, Plaza Permata (formerly
known as IGB Plaza), Jalan Kampar, Off Jalan Tun Razak, 50400 Kuala Lumpur not less than 48 hours before the time appointed for holding the Meeting
or any adjournment thereof.
7.
Explanatory Note for Ordinary Resolution No. 7
In line with the Company’s plan for expansion/diversification, the Company is actively looking into prospective areas so as to broaden its operating base
and earnings potential. As the expansion/diversification may involve the issuance of new shares, the Directors, under present circumstances would be
required to convene a general meeting to approve the issuance of new shares even though the number involved is less than 10% of the issued share
capital. In order to avoid any delay and cost involved in convening a general meeting to approve such issue of shares, it is considered appropriate that
the Directors be now empowered to issue shares in the Company up to an amount not exceeding in total, 10% of the issued share capital of the
Company for the time being, for such purposes as they consider would be in the interest of the Company. This authority unless revoked or varied at a
general meeting will expire at the next Annual General Meeting of the Company.
financial calendar
21 May 2002
26 August 2002
28 April 2003
17th Annual General Meeting and
Extraordinary General Meeting.
Announcement of the unaudited
consolidated 2nd quarter results for the
six months ended 30 June 2002.
Issuance of Notice of the 18th AGM,
Notice of Dividend Payment and Book
Closure, and Annual Report for the
financial year ended 31 December 2002.
24 May 2002
consolidated 1st quarter results for the
three months ended 31 March 2002.
29-31
May 2002
Book Closure for determining the
entitlement of the dividends.
24 June 2002
Date of payment of the final dividend of
10 sen per share (less 28% Malaysian
Income Tax) and special dividend of
Income Tax) in respect of the financial
year ended 31 December 2001.
29 November 2002
consolidated 3rd quarter results for the
nine months ended 30 September 2002.
27 February 2003
Announcement of the audited consolidated
results and the proposed final dividend
for the financial year ended 31 December
2002.
20 May 2003
18th Annual General Meeting of the
Company.
29-30
May 2003
Book Closure for determining the
entitlement for the dividend.
23 June 2003
Date of payment of the final dividend of
Income Tax) in respect of the financial
5
statement accompanying the notice of annual general meeting
ATTENDANCE OF DIRECTORS AT THE BOARD OF DIRECTORS’ MEETINGS
1.
The Board met fourteen (14) times during the financial year ended 31 December 2002. Details of their attendance are as follows:-
NAME
ATTENDANCE
Tan Sri Dato’ Ir. Muhammad Radzi bin Haji Mansor
14/14
14/14
13/14
Dato’ Abdul Majid bin Haji Hussein
9/14
Datuk Dr. Halim bin Shafie
8/14
Y.B. Joseph Salang Gandum
12/14
Dato’ Dr. Mohd Munir bin Abdul Majid
11/14
Y.B. Dato’ Ir. Haji Mohd Zin bin Mohamed
11/14
Dato’ Lim Kheng Guan
14/14
Ir. Prabahar N.K. Singam
13/14
Rosli bin Man
12/14
Tan Poh Keat
14/14
Mohammad Zanudin bin Ahmad Rasidi
(Alternate Director to Dato’ Abdul Majid bin Haji Hussein)
5/14
Suriah binti Abdul Rahman
(Alternate Director to Datuk Dr. Halim bin Shafie)
5/14
LIST OF GENERAL MEETINGS during the financial year ended 31 December 2002
TYPE OF MEETING
6
DATE
TIME
VENUE
17th Annual General Meeting
21 May 2002
10.00 a.m.
Legend Grand Ballroom
9th Floor, The Legend Hotel
100 Jalan Putra
50350 Kuala Lumpur
Extraordinary General Meeting
21 May 2002
12.30 p.m.
Legend Grand Ballroom
9th Floor, The Legend Hotel
100 Jalan Putra
50350 Kuala Lumpur
2.
Further details of Directors seeking re-election at the Annual General Meeting
NAME
DATO’ DR. MD KHIR BIN ABDUL RAHMAN
DATO’ DR. ABDUL RAHIM BIN HAJI DAUD
Age
55
54
Nationality
Malaysian
Malaysian
Qualification
• Bachelor of Science Degree in Mathematics
from University Malaya.
• Masters in Agricultural Development from the
State University of Ghent, Belgium.
• Doctorate of Science in Computing Statistics,
from the State University of Ghent, Belgium.
• Bachelor of Engineering (Honours) in Electronics
from University of Liverpool, United Kingdom.
• Masters in Science (Telecommunications
Engineering) from University of Birmingham,
United Kingdom.
• Doctorate in Engineering (Telecommunications)
from the University of Bath, United Kingdom.
• Masters in Business Administration from the
University of Ohio, United States.
Designation/Position
on the Board
Chief Executive
(Non-Independent Executive Director)
Deputy Chief Executive/Executive Director
Date first appointed
on the Board
1 May 2000
7 July 1998
Working Experience and
Occupation
As enumerated in profile on page 23
As enumerated in profile on page 24
Directorships in other
public listed companies
VADS Berhad
None
Securities holdings in the
Company and its subsidiaries
None
Telekom Malaysia Berhad
10,500 shares (direct interest)
86,500 shares (indirect interest)
VADS Berhad
10,000 shares (direct interest)
Family relationship with any
Director and/or major
shareholder of the Company
None
None
Conflict of interest with the
Company
None
None
List of convictions for
offences within the past
10 years other than traffic
offences
None
None
Number of the Company’s
Board Meetings attended in
the financial year
14/14 (100%)
13/14 (92.86%)
7
five-year group financial highlights
2,500
2,000
500
0
1998
1999
2000
2001
2002
1,835.8
1,000
1,200
1,082.7
1,500
1,600
697.8
1,250.8
1,017.0
4,000
2,000
1,570.1
6,000
2,000
(RM Million)
953.0
8,000
Profit After
Taxation
1,472.1
(RM Million)
2,443.6
9,673.2
8,815.7
7,833.0
7,980.1
9,834.1
10,000
(RM Million)
Profit Before
Taxation
2,123.6
Operating
Income
400
0
1998
1999
In RM Million
2000
2001
2002
800
0
1998
1999
2000
2001
2002
1998
1999
2000
2001
2002
1.
Operating income
7,980.1
7,833.0
8,815.7
9,673.2
9,834.1
2.
Profit before taxation#
2,123.6
1,017.0
1,250.8
2,443.6
1,570.1
3.
Profit after taxation#
1,472.1
953.0
697.8
1,835.8
1,082.7
4.
Profit after taxation and minority interest#
1,445.8
951.9
705.2
1,811.9
1,056.3
5.
Total shareholders funds#*
12,063.4
12,748.3
13,645.7
15,167.1
15,245.3
6.
Total assets#
25,640.8
25,630.1
27,266.9
27,388.1
27,713.7
7.
Total borrowings
7,899.0
8,059.5
8,436.0
7,074.7
7,662.7
11.4%
–1.8%
12.5%
9.7%
1.7%
202.4%
–52.1%
23.0%
95.4%
–35.7%
GROWTH RATES OVER PREVIOUS YEARS
1.
Operating income
2.
Profit before taxation#
3.
Total shareholders funds#*
4.8%
5.7%
7.0%
11.1%
0.5%
4.
Total assets#
6.4%
0.0%
6.4%
0.4%
1.2%
5.
Total borrowings
1.0%
2.0%
4.7%
–16.1%
8.3%
8
1999
2000
2001
2002
8,000
7,662.7
8,436.0
27,713.7
27,388.1
27,266.9
18,000
6,000
7,200
12,000
4,000
3,600
6,000
2,000
0
1998
24,000
7,074.7
10,800
10,000
(RM Million)
25,630.1
14,400
25,640.8
15,245.3
15,167.1
13,645.7
12,748.3
12,063.4
30,000
(RM Million)
Total
Borrowings
8,059.5
18,000
(RM Million)
Total
Assets
7,899.0
Total Shareholders
Funds
0
0
1998
1999
2000
2001
2002
1998
1999
2000
2001
2002
Return On
Shareholders Funds
15
8.0
Debt
Equity Ratio
1.0
(%)
0.6
3
1999
2000
2001
2002
0.6
0.4
1.6
0
1998
0.5
3.9
3.7
3.2
2.6
5.2
6.9
7.5
6
0.5
6.7
4.8
0.8
0.6
9
6.4
5.7
11.9
12.0
12
0.7
(%)
Return On
Total Assets
0.2
0
1998
1999
2000
2001
2002
0
1998
1999
2000
2001
2002
1998
1999
2000
2001
2002
12.0%
7.5%
5.2%
11.9%
6.9%
5.7%
3.7%
2.6%
6.7%
3.9%
RATIO
1.
Return on shareholders funds#*
2.
Return on total assets#
3.
Debt equity ratio
4.
Dividend rate
5.
Dividend cover#
6.
Earnings per share#
– Basic
0.6
0.6
0.5
0.5
10.0%
10.0%
15.0%
10.0%
4.8
3.2
2.3
3.9
3.3
48.2 sen
31.6 sen
22.9 sen
58.6 sen
33.5 sen
402.2 sen
421.0 sen
442.0 sen
488.7 sen
481.4 sen
High
RM13.10
RM14.70
RM17.70
RM12.60
RM10.20
Low
RM4.34
RM7.55
RM9.65
RM7.50
RM6.90
7.
Net tangible assets per share#*
8.
Share price information
#
0.7
10.0%
Comparative figures for 1998 – 1999 are restated to conform with the changed accounting policy in year 2000 on the treatment of
foreign exchange differences as well as the prior year adjustment on Group’s share of post acquisition profits less losses of
associated companies.
*
Comparative figures for 1998 – 2001 are restated to conform with the change in accounting policy in year 2002 on the recognition
of liabilities with respect to dividend proposed.
9
group financial performance 2002
2.2%
Non-Telecommunication Related Services
4.0%
Internet and Multimedia
4.0%
Other Telecommunication Related Services
8.3%
Data Services
16.1%
Cellular
OPERATING INCOME
28.2%
Residential
37.2%
Business
group segmental analysis
SEGMENT OPERATING INCOME
for the year ended 31 December 2002
2.2%
Others
16.1%
Cellular
5.5%
Overseas
81.7%
Fixed Line, Data,
94.5%
Malaysia
By Business
10
By Geographical Location
3.0%
Net Finance Cost
4.9%
Taxation
10.8%
Profit After Taxation
24.9%
Depreciation
DISTRIBUTION OF INCOME
56.4%
Operating Cost
SEGMENT RESULT
SEGMENT ASSETS
as at 31 December 2002
1.6%
Others
5.0%
Cellular
5.3%
Others
4.4%
Overseas
93.4%
Fixed Line, Data,
95.6%
Malaysia
By Business
15.6%
Cellular
5.8%
Overseas
79.1%
Fixed Line, Data,
94.2%
Malaysia
By Business
11
business & other statistics
Year ended 31 December
1998
1999
2000
2001
2002
CUSTOMER BASE
TM TelCo
1.
Residential telephone
3,226,879
3,258,044
3,405,744
3,406,655
3,328,456
2.
Business telephone
1,157,269
1,172,755
1,228,601
1,252,352
1,264,844
3.
Public telephone
188,839
162,276
156,600
120,528
79,479
4.
Leased circuits
50,636
61,280
63,527
62,134
54,169
5.
Other services
7,148
6,031
5,592
5,022
4,671
6.
Toll Free (1-300 and 1-800)
1,102
1,295
1,573
1,658
1,703
7.
ISDN
8.
Total access lines
9.
Total access lines per 100 population
8,866
18,089
34,512
52,202
64,976
4,384,148
4,430,799
4,634,345
4,659,007
4,593,300
20.4
20.1
20.9
20.0
18.8
209,210
196,765
496,526
859,428
554,418
6,889
97,610
280,825
393,587
1,024,537
1,480,327
TM Cellular Sdn. Bhd.
1.
Postpaid
2.
Prepaid
TM Net Sdn. Bhd.
1.
Access Services*
270,000
405,330
855,495
1,271,038
2.
Application Services
—
—
1,610
**621
7,937
3.
Content Services
—
—
—
253,413
380,884
29,878
30,069
30,404
30,724
30,850
INFRASTRUCTURE
TM TelCo (’000)
1.
Kilometers cable pair
2.
Fibre kilometers
120
172
245
295
326
3.
Exchange lines
7,190
7,337
7,970
8,528
8,656
4.
International exchange lines
32.90
33.00
34.50
40.3
45.7
No. of BTS sites (cumulative)
736
898
1,245
1,655
2,133
2.
Network Switching System (NSS) capacity (’000)
375
350
670
1,705
2,995
3.
Coverage populated area (%)
21
30
54
57
62
12
1.
Year ended 31 December
1998
1999
2000
2001
2002
27,089
25,442
24,789
21,237
20,708
162
174
187
217
222
PRODUCTIVITY
TM TelCo
1.
Number of employees
2.
Number of access lines per employee
1.
Number of employees
817
833
1,672
1,966
2,010
2.
Revenue per employee (RM’000)
237
286
305
551
579
3.
Customer per employee
265
353
465
637
785
TM Net Sdn. Bhd.
1.
Number of employee
304
332
***254
365
424
2.
Revenue per employee (RM’000)
253
438
829
828
873
QUALITY OF SERVICE
TM TelCo
1.
Total faults report per line
0.4
0.5
0.4
0.4
0.4
2.
Total complaints per 1,000 lines
13.2
10.2
8.3
5.6
5.2
3.
Leased circuits fault restoration within 24 hours (%)
98.0
97.3
100.0
85.1
96.7
99.91
1.
Overall Network Availability (%)
99.61
99.81
99.61
99.95
2.
Accessibility (%)
99.06
98.13
89.27
95.67
96.78
3.
Retainability (%)
N/A
97.37
96.50
97.27
95.11
TM Net Sdn. Bhd.
1.
% Complaints of bills issued
—
—
—
—
0.54%
2.
Number of complaints per 1,000 customers
—
—
—
—
14
*
TM Net Sdn. Bhd. only started operation in July 2002. The 4 year statistics (1998-2001) refer to TM Multimedia.
** In 2000, Netmyne offered a one-year free subscription for the service and 1,610 subscribers signed up. However, in 2001, a significant
number of these subscribers terminated the service when the free subscription period ended.
*** The significant drop in the number of employees in the year was a result of a significant number of Internet Data Centre staff being
transferred to TM TelCo.
13
group financial review
OPERATING INCOME
reclassified from non-telecommunication services to internet and
multimedia services to be consistent with segmental reporting.
The comparative figures for 2001 were reclassified accordingly.
For the financial year ended 31 December 2002, the Group’s
operating income increased by 1.7% (RM160.9 million) from
RM9,673.2 million recorded in 2001 to RM9,834.1 million in
2002. The growth was mainly attributed to the 32.9% and 29.7%
growth in internet and multimedia and other telecommunication
services respectively.
Other telecommunication related services comprise mainly
recoverable works order, maintenance, international services,
broadcasting, restoration of submarine cable and etc registered
an encouraging growth of 29.7% (RM90.6 million). Telekom
Malaysia Berhad (TM), VADS Berhad (VADS) and a new subsidiary
company, GITN Sdn. Bhd. (GITN) jointly contributed to the increase.
Fixed line services, comprise business (which also includes ISDN,
payphone, interconnect, international inpayment) and residential
telephony recorded a slight decrease of 1.1% (RM71.6 million) to
RM6,428.8 million, compared to RM6,500.4 million recorded in
2001. Lower performance from fixed lines was mainly attributed
to the decrease in call revenues resulting from the tariff rebalancing
exercise in March 2002. Although the tariff rebalancing exercise
contributed to higher rental revenue, the reduction in long
distance and international tariff without sufficient increase in
traffic volumes has reduced the long distance and international
call revenue. Further reduction in international rates in June 2002
also contributed to lower call revenue.
Non-telecommunication related services comprise mainly services
from subsidiary companies with core business in consultancy,
property management, education, trading in consumers premises
equipment and etc. Operating income from this segment
decreased by 19.9% (RM53.2 million) mainly due to lower
consultancy revenue recorded by TM International Sdn. Bhd. and
Telekom Management Services Sdn. Bhd.
There was no major change in the operating income mix for the
Group. Telephony services being the core business of the Group
contributed 81.5% (2001: 82.7%) of the Group’s operating income
with the fixed line services contributed 65.4% (2001: 67.2%) and
the remaining 16.1% (2001: 15.5%) was from the cellular division.
The contribution from data services, internet and multimedia
services and other telecommunication related services were 8.3%
(2001: 8.4%), 4.0% (2001: 3.1%) and 4.0% (2001: 3.1%)
respectively. Income from non-telecommunication related services
contributed 2.2% (2001: 2.7%) to the Group’s operating income.
Revenue from Cellular, which comprised rental, call charges and
interconnect charges, registered moderate growth of 6.3%
(RM94.3 million). The growth was jointly contributed by TM
Cellular Sdn. Bhd. (TM Cellular), MTN Networks (Private) Limited
and TM International (Bangladesh) Limited. This growth was in
line with the growth in the number of subscribers of the
respective companies.
3,200
266.9
213.7
394.5
800
296.9
395.4
304.8
809.6
1,600
812.8
1,588.9
1,494.6
2,400
0
Business
02'
14
2,861.9
2,770.2
Income from internet and multimedia services comprise
mainly revenue from ISP and other multimedia services,
development of education system and software and
advertisement charges. Income from this business
segment grew by 32.9% compared to 2001 mainly due
to 23.7% growth in ISP revenue resulted from the
increase in number of subscriber and the introduction of
new multimedia services as well as higher progress
billing from development of education system and
software. During the year, revenue from development of
education system and software, advertisement and
publication and electronic data information services were
4,000
3,638.5
3,658.6
Income from data services, which include leased services, COINS
and frame relay and packet services increased marginally by
0.4%. Income from leased services declined by 5.1% due to the
migration to higher end services such as COINS and adjustment
of revenue from house cleaning exercise. COINS recorded
significant growth of 52.5% due to the migration from
Operating Income
leased services as mentioned above as well as increase
(RM Million)
in new customers. Frame relay and packet services
recorded 12.9% reduction compared to 2001 mainly due
to adjustment for house cleaning exercise.
Residential
01'
Cellular
Data
Service
Other
Internet and
NonTelecommu- Multimedia Telecommunication
nication
Related
Related
Services
Services
OPERATING COSTS
The Group’s operating costs increased by 3.5% (RM275.8 million)
from RM7,839.3 million recorded in 2001 to RM8,115.1 million
in 2002. The main contributors were universal service provision
(USP) cost, international outpayment, manpower and foreign
exchange losses.
The Group recorded net foreign exchange losses of RM96.7 million
in 2002, compared to a net gain of RM77.6 million recorded in
2001, largely due to revaluation losses of Japanese Yen borrowings.
Bad and doubtful debts expense declined significantly by 35.1%
(RM305.1 million) mainly due to lower provision at TM and TM
Cellular. The lower provision at TM Cellular which represented
16.0% (2001: 24.3%) of its operating income was achieved
through improved credit management in fourth quarter 2002. This
has resulted in positive collection trend as compared to a massive
house cleaning exercise in the third quarter of 2001. Provision at
TM level, mainly for fixed line telephony, domestic and international
private leased services decreased by 23.8% as compared to
corresponding year and remained at a manageable level of 4.0%
(2001: 5.4%) of total operating income.
As required under paragraph 16 of Determination No. 2 of 2001
issued by the Malaysian Communication and Multimedia Commission
(the Commission), a licensee shall annually contribute 6% of its
weighted revenue to the USP fund unless the Commission by
written notification, decides to reduce the contribution. The total
USP expense accrued for 2002 in accordance with the above
regulatory requirement was RM230.5 million. There was no such
expense for year 2001.
Higher international outpayment recorded mainly at TM level
resulted from adjustments for outgoing traffic under declared for
special transits and under accrued of outpayment due to adjustment
in accounting rates.
Depreciation charge increased marginally by 4.4% (RM104.2
million) to RM2,481.8 million mainly due to higher assets additions
at TM Cellular and a few overseas subsidiary companies as a
result of network expansion. Depreciation expense remained the
biggest cost component and constituted 30.6% of Group’s
operating costs followed by manpower cost (16.1%), domestic
and international out payments (14.9%), bad and doubtful debt
expense (6.9%), supplies and inventories (4.2%), maintenance
(4.0%) and etc.
Manpower cost (excluding retirement benefits) grew by 7.5%
(RM90.8 million) to RM1,307.7 million mainly due to yearly
increment and higher cost incurred for Voluntary Separation
Scheme (VSS). Total VSS expense incurred in 2002 was RM147.0
million compared to only RM28.3 million in 2001. Increase in the
number of employees of several subsidiary companies due to
business expansion also contributed to the higher manpower
cost. However, reversal of bonus expense and retirement benefit
over accrued in prior year helped to mitigate the impact of the
significant increase in VSS expense to the Group’s bottom line.
Operating Costs
(RM Million)
869.5
323.9
326.7
342.7
500
324.7
564.4
1,209.0
Depreciation Manpower Domestic and Bad and
International Doubtful
Outpayment Debts
02'
1,500
1,000
1,032.2
1,307.7
1,216.9
1,885.6
2,000
1,691.7
2,481.8
2,377.6
2,500
0
Supplies Maintenance Other
and
Operating
Inventories
Costs
01'
15
group financial review
NET FINANCE COST
The current year net finance cost of RM303.9 million was 23.8% lower than RM398.9 million recorded in 2001 largely due to lower interest
expense. Reduction in interest expense was achieved through full year savings arising from prepayment of borrowings bearing high interest
rate by Telekom Malaysia and several subsidiary companies throughout year 2001. This was evident from the reduction in Group
borrowings from RM8,436.0 million as at 31 December 2000 to RM7,662.7 million as at 31 December 2002. In addition, lower interest
rate during the year for the floating rate borrowings also contributed to the decrease in net finance cost.
PROFIT BEFORE TAXATION
Despite significant improvement in TM Cellular, which has recorded
before taxation as compared to RM80.6 million in 2001. Significant
profit before tax of RM10.4 million (excluding waiver of shareholder
adjustment for staff benefits, fixed assets and provision for
loan) compared to RM118.0 million loss in 2001, the Group’s
contingent liabilities affected Telkom SA’s current year performance.
profit before taxation declined significantly by 35.7% (RM873.5
The lower contribution from GT was due to TM ceased applying
million) from RM2,443.6 million recorded in 2001 to RM1,570.1
the equity accounting method on GT’s results since 3rd quarter
million in 2002 mainly due to the inclusion of an exceptional gain
2002 due to loss of management control over the company. Share
on disposal of an associated company, Digital Phone Company
of losses of a new associated company, Celcom (Malaysia) Berhad
Limited (DPC) amounting to RM827.8 million in 2001.
also contributed to the lower profit.
Excluding the above exceptional gain, the current year profit
Nevertheless, saving from non-sharing of losses of DPC, which
before tax was only 2.8% (RM45.7 million) lower than 2001.
was disposed off in 2001 helped to reduce the impact of the
above lower performance to the Group’s bottom line. Share of
losses of DPC in 2001 amounted to RM40.1 million.
The Group’s share of profit less losses of associated companies
for 2002 of RM42.5 million was marginally lower than RM43.8
million (excluding exceptional gain) recorded in 2001 mainly due
Consequent from 35.7% decline in profit before tax, the profit
to lower profit contribution from Telkom SA Limited (Telkom SA)
attributable to shareholders decreased by 41.7% (RM755.6 million)
and Ghana Telecommunications Company Limited (GT). Telkom SA
from RM1,811.9 million to RM1,056.3 million.
and GT jointly contributed RM56.9 million to the Group’s profit
Profit Before
Taxation
Net Finance Cost
(RM Million)
2,500
(RM Million)
2,443.6
500
600.1
73.5
0
16
1,000
108.4
85.7
110
Finance Cost
1,500
1,570.1
1,469.2
1,017.0
220
02'
2,000
1,395.5
2,123.6
330
1,250.8
389.6
440
2,084.7
507.3
550
98'
99'
01'
Finance Income
Group
Company
00'
01'
02'
0
ASSETS
Total assets for the Group increased from RM27,388.1 million in
investment in associated companies was mainly due to acquisition
2001 to RM27,713.7 million in 2002 mainly due to increase in
of Celcom. Trade and other receivables reduced by RM143.6
property, plant and equipment, investment in associated companies
million as compared to 2001 mainly due to improved credit
after netting off reduction in trade and other receivables and cash
management at TM and TM Cellular whereas reduction in cash
and cash equivalent.
and cash equivalent of RM699.1 million was largely due to
utilisation of funds in acquiring Celcom.
Increased capital spending by TM Cellular and other subsidiary
companies to expand and improve their network coverage and
Resulting from lower profit after taxation and increased total
quality was the main contributing factor to higher property, plant
assets, the return on total assets has decreased significantly from
and equipment which had increased by RM639.8 million. Higher
6.7% in 2001 to 3.9% in 2002.
SHAREHOLDERS FUND
The Group shareholders fund increased slightly from RM15,167.2
In line with lower performance in 2002, the proposed gross final
million recorded in 2001 to RM15,245.3 million in 2002. The
dividend for financial year 2002 was 10.0 sen less 28% taxation
increase was mainly attributed by the issuance of new shares
as compared to 15.0 sen less 28% taxation in 2001 which
under the Employees’ Share Option Scheme (ESOS).
comprised a final gross dividend of 10.0 sen and a special gross
dividend of 5.0 sen. As a result of lower earnings per share,
Due to significantly lower profit attributable to shareholders as
dividend cover decreased from 3.9 in 2001 to 3.3 in 2002.
mentioned earlier, return on shareholders fund declined
significantly from 11.9% in 2001 to 6.9% in 2002. Likewise,
earnings per share (EPS) also declined from 58.6 sen in 2001 to
33.5 sen in 2002.
58.6
60
48
33.5
36
31.6
1.7%
Other Assets
2.5%
Long Term Receivables
5.6%
Associated Companies
6.6%
Cash and Cash Equivalents
13.0%
Trade and Other Receivables
Shareholders
Funds
48.2
Total Assets 2002
22.9
24
98'
70.6%
Property, Plant and Equipment
EPS (sen)
99'
6.9
5.2
7.5
11.9
12.0
12
00'
0
01'
02'
ROSHF (%)
17
group structure
as at 31 March 2 0 0 3
Corporate Centre
100%
UNIVERSITI TELEKOM SDN. BHD.
100%
UNITELE MULTIMEDIA SDN. BHD.
100%
TELEKOM RESEARCH & DEVELOPMENT SDN. BHD.
100%
TELEKOM ENTERPRISE SDN. BHD.
55%
Facilities Management
MOBITEL SDN. BHD.
100%
MEDIATEL (MALAYSIA) SDN. BHD.
100%
TM INTERNATIONAL (L) LIMITED
100%
TESS INTERNATIONAL LTD.
100%
TM INTERNATIONAL (CAYMAN) LTD.
100%
TM INTERNATIONAL LEASING INCORPORATED
100%
TM GLOBAL INCORPORATED
40%
SISTEM IRIDIUM MALAYSIA SDN. BHD.
100%
TM FACILITIES SDN. BHD.
100%
MENARA KUALA LUMPUR SDN. BHD.
100%
PARKSIDE PROPERTIES SDN. BHD.
100%
TELESAFE SDN. BHD.
TM INTERNATIONAL SDN. BHD.
100%
MTN NETWORKS (PRIVATE) LIMITED
100%
TM INTERNATIONAL LANKA (PRIVATE) LIMITED
100%
TMI MAURITIUS LIMITED
85%
G-COM LTD.
51%
CAMBODIA SAMART COMMUNICATION CO. LTD.
42%
CAMBODIA NATIONAL COMMUNICATION INC.
19.73%
SAMART CORPORATION PUBLIC COMPANY LIMITED
100%
TELEKOM MANAGEMENT SERVICES SDN. BHD.
70%
TM INTERNATIONAL (BANGLADESH) LIMITED
60%
SOTELGUI S.A. (Societe Des Telecommunications De Guinee)
60%
TELEKOM NETWORKS MALAWI LIMITED
100%
TELEKOM MALAYSIA - AFRICA SDN. BHD.
40%
THINTANA COMMUNICATIONS LLC
30%
TELKOM SA LIMITED
International Operations
18
100%
Fixed Line Services
Data
Cellular
69.52%
VADS BERHAD
100%
VADS e-SERVICES SDN. BHD.
100%
VADS SOLUTIONS SDN. BHD.
100%
TM CELLULAR SDN. BHD.
100%
MOBIKOM SDN. BHD.
100%
INTELSEC SDN. BHD.
31.25%
CELCOM (MALAYSIA) BERHAD*
100%
GITN SDN. BHD.
70%
MEGANET COMMUNICATIONS SDN. BHD.
60%
FIBERAIL SDN. BHD.
10.10%
5 by 5 NETWORKS INC.
16.22%
MYSPEED.COM SDN. BHD.
* Collective interest with 2.09% interest held by
Telekom Malaysia and 29.16% by Telekom Enterprise Sdn. Bhd.
Voice
100%
TM NET SDN. BHD.
100%
TELEKOM PAYPHONE SDN. BHD.
100%
TELEKOM MULTI-MEDIA SDN. BHD.
100%
CITIFON SDN. BHD.
100%
100%
TM ORION SDN. BHD.
100%
TELEKOM SALES & SERVICES SDN. BHD.
51%
TELEKOM SMART SCHOOL SDN. BHD.
100%
TM (HONG KONG) LIMITED
49%
MAHIRNET SDN. BHD.
100%
TELEKOM MALAYSIA (UK) LIMITED
30%
MUTIARA.COM SDN. BHD.
100%
TM (USA) INC.
51%
TELEKOM CONSULTANCY SDN. BHD.
100%
TM (SINGAPORE) PTE. LTD.
TELEKOM PUBLICATIONS SDN. BHD.
100%
CYBERMALL SDN. BHD.
100%
TELEKOM INFOTECH SDN. BHD.
70%
TELEKOM APPLIED BUSINESS SDN. BHD.
70%
TELEKOM TECHNOLOGY SDN. BHD.
Multimedia
19
corporate information
BOARD OF DIRECTORS
Chairman
(Non-Independent Non-Executive Director)
(Senior Independent Non-Executive Director)
(Independent Non-Executive Director)
Chief Executive
Rosli bin Man
Tan Poh Keat
(Alternate Director to Dato’ Abdul Majid bin Haji Hussein)
Suriah binti Abd Rahman
(Alternate Director to Datuk Dr. Halim bin Shafie)
SECRETARIES
REGISTRAR
PRINCIPAL BANKERS
Wang Cheng Yong (MAICSA 0777702)
Tenaga Koperat Sdn. Bhd.
20th Floor, Plaza Permata
(formerly known as IGB Plaza)
Jalan Kampar
Off Jalan Tun Razak
50400 Kuala Lumpur
Tel No. : 03-4041 6522
Fax No. : 03-4042 6352
Bumiputra-Commerce Bank Berhad
Zaiton Ahmad (MAICSA 7011681)
REGISTERED OFFICE
Level 51, North Wing
Menara Telekom
Off Jalan Pantai Baharu
50672 Kuala Lumpur
Tel No. : 03-2240 1211/1221/1225
Fax No. : 03-2283 2415/2284 8039
Malayan Banking Berhad
Affin Bank Berhad
PRINCIPAL SOLICITORS
Zul Rafique & Partners
Zain & Co.
AUDITORS
PricewaterhouseCoopers
(Chartered Accountants)
Tingkat 11, Wisma Sime Darby
Jalan Raja Laut
50706 Kuala Lumpur
Tel No. : 03-2693 1077
Fax No. : 03-2693 0997
Nik Saghir & Ismail
STOCK EXCHANGE LISTING
Kuala Lumpur Stock Exchange
picture from left to right:
• Zaiton Ahmad • Mohammad Zanudin Ahmad Rasidi • Dato’ Abdul Majid Haji Hussein • Y.B. Joseph Salang Gandum
• Rosli Man • Tan Poh Keat • Dato’ Dr. Md Khir Abdul Rahman • Tan Sri Dato’ Ir. Muhammad Radzi Haji Mansor
• Dato’ Dr. Abdul Rahim Haji Daud • Dato’ Dr. Mohd Munir Abdul Majid • Y.B. Dato’ Ir. Haji Mohd Zin Mohamed
• Datuk Dr. Halim Shafie • Ir. Prabahar N.K. Singam • Dato’ Lim Kheng Guan • Suriah Abd Rahman • Wang Cheng Yong
profile of the board of directors
TAN SRI DATO’ IR. MUHAMMAD RADZI BIN HAJI MANSOR
(61 years of age – Malaysian)
Chairman
Non-Independent Non-Executive Director
Tan Sri Dato’ Ir. Muhammad Radzi was appointed Chairman and Director of Telekom Malaysia on 12 July 1999. He graduated with a
Diploma in Electrical Engineering in 1962 from Faraday House Engineering College, London and a Masters in Science (Technological
Economics) from the University of Stirling, Scotland in 1975.
A Chartered Professional Engineer registered with the Board of Engineers, Malaysia and The Council of Engineering Institutions, United
Kingdom; he is a corporate member of the Institution of Engineers, Malaysia, the Institution of Electrical Engineers, United Kingdom and
the Institute of Management, United Kingdom. He has been appointed as a Committee Member of Board of Engineers, Malaysia effective
from 23 August 2002 for a period of one year.
He served in various engineering and management capacities in the former Jabatan Telekom [Telecommunications Department] over a
twenty-two year period, including a three-year secondment as Technical Advisor to the Ministry of Energy, Telecommunications and Posts.
Tan Sri Dato’ Ir. Muhammad Radzi retired as Director General of Telecommunications upon corporatisation of the Telecommunications
Department on 1 January 1987 and was subsequently appointed as Director of Operations of Telekom Malaysia. He served as Director of
Marketing and Customer Services from 1989 to 1995. He was then appointed as Director of Regulatory Management and External Affairs,
and retired in July 1996.
From 1997 to 1999, he was retained as a Consultant/Advisor on multimedia flagship application projects for the Multimedia Development Corporation
Sdn. Bhd., a company established by the Malaysian Government to oversee the development and implementation of multimedia projects.
Tan Sri Dato’ Ir. Muhammad Radzi currently serves as Chairman of the Board Nominating and Remuneration Committee and Board Employees’
Share Option Scheme Committee. He is also a Board Member of a number of subsidiaries and associate companies of Telekom Malaysia.
He is a Non-Executive Director nominated by the Minister of Finance (Inc), the Special Shareholder of Telekom Malaysia and has never
been charged for any offence. He has no family relationship with any Director of the Company nor any conflict of interest with the Company.
22
>>
Chief Executive
Non-Independent Executive Director
Dato’ Dr. Md Khir was appointed Chief Executive and a Board Member on 1 May 2000. Prior to this, he was the Deputy Chief Executive/
General Manager of Malaysian Electronics Payment System (MEPs).
He holds a Bachelor of Science Degree in Mathematics from University Malaya, Masters in Agricultural Development and Doctorate of
Science in Computing Statistics, from the State University of Ghent, Belgium.
Dato’ Dr. Md Khir started his career in Malaysian Agricultural Research and Development Institute (MARDI) in 1972, before joining Bank
Negara Malaysia in 1983. He served the Central Bank in various senior positions before joining the telecommunications sector in 1996 as
the Managing Director of Mejati Technologies Group.
He has depth of experience in information and communication technology, banking and payment system as well as in development of
e-commerce applications. He is also a Director of VADS Berhad (“VADS”), Multimedia Development Corporation Sdn. Bhd. (“MDC”) and
Malaysian Industry-Government Group for High Technology (“MIGHT”).
Dato’ Dr. Md Khir is currently a Member of the Board Employees’ Share Option Scheme Committee, Board Tender Committee (TelCo) and
also a Board Member of a number of subsidiary and associate companies of Telekom Malaysia. He is an Executive Director nominated by
the Minister of Finance (Inc), the Special Shareholder of Telekom Malaysia and has never been charged for any offence. He has no family
relationship with any Director of the Company nor any conflict of interest with the Company.
23
>>
DATO’ DR. ABDUL RAHIM BIN HAJI DAUD
Non-Independent Executive Director
He was appointed as Deputy Chief Executive of the Company effective from 29 May 2001 and has held the position of
Executive Director since 7 July 1998. He obtained a Bachelor of Engineering (Hons) in Electronics, from the University of
Liverpool, Masters in Science (Telecommunications Engineering) from University of Birmingham, United Kingdom and
Doctorate in Engineering (Telecommunication) from the University of Bath, United Kingdom. He also obtained a Masters in
Business Administration from the University of Ohio, United States. He has attended the Harvard Business School’s
Advanced Management Program (AMP) and also the Senior Executive Development Program at the Wharton School of
Business, University of Pennsylvania, United States. He is a member of the Board of Engineers, Malaysia and also a fellow
of the Institution of Engineers, Malaysia.
He joined Jabatan Telekom Malaysia (JTM) as a Telecommunications Engineer in 1973. He has wide experience in
managing telecommunications and Information Technology. In 1988, he was appointed General Manager, Information
Systems and became the Senior General Manager, National Network Operations in 1993. In July 1995, he was made Senior
Vice President, Network Services before his appointment to head Telekom Malaysia’s TelCo as its Chief Operating Officer
in 1996. Upon his appointment as Executive Director in July 1998, he remained as the Chief Operating Officer TelCo until
1 February 2001 when he assumed the position of Executive Director, Corporate Strategy and Development. He was the
first Malaysian to be elected as Chairman of the Commonwealth Telecommunications Organisation (“CTO”) comprising 35
countries for three terms from September 1999 to November 2002.
Dato’ Dr. Abdul Rahim serves as a Member of Board Employees’ Share Option Scheme Committee, Board Tender
Committee (TelCo) and also a Board Member of a number of subsidiaries and associate companies of Telekom Malaysia.
He is an Executive Director nominated by the Minister of Finance (Inc), the Special Shareholder of Telekom Malaysia and
has never been charged for any offence. He has no family relationship with any Director of the Company nor any conflict
of interest with the Company.
24
DATO’ ABDUL MAJID BIN HAJI HUSSEIN
DATUK DR. HALIM BIN SHAFIE
Dato’ Abdul Majid was appointed Director of Telekom Malaysia on
5 December 2000. He obtained his Masters in Business
Management from Asian Institute of Management, Manila and has
attended the Advanced Management Program at the Harvard
Business School, USA, in 2000.
Datuk Dr. Halim was first appointed to the Board on 24 November
2000. He obtained a Bachelor of Economic (Hons.) from the
University of Malaya (1972), Masters in Public and International
Affairs from the University of Pittsburgh, USA (1980) and a
Doctorate in Information Transfer from Syracuse University, USA
(1988). He also attended the Advanced Management Program at
the Harvard Business School, USA, in 2000.
Upon graduating with a Bachelor of Economics majoring in
Accountancy, he served the Accountant General’s Office for two
years and later the National Institute of Public Administration
(INTAN) for six years as a lecturer and program coordinator. In
1993 he was seconded to the Federal Agricultural Marketing
Authority (FAMA) as the Director of Planning and later served as
the Deputy Director General in charge of Administration. From
1990 to 1993, he served as the Senior Assistant Director in the
Budget Division of the Ministry of Finance. He continued his
public service as the State Financial Officer of Negeri Sembilan,
Director of Service in the Public Services Department and the
State Secretary of Perak prior to being appointed to his present
position as Deputy Secretary General Treasury (Operations) in the
Ministry of Finance.
Dato’ Abdul Majid currently serves as a Non-Executive Chairman
of the Board Tender Committee (TelCo), a Member of the Board
Employees’ Share Option Scheme Committee and Board Audit
Committee. He is also a Director of Perusahaan Otomobil Nasional
Berhad (“PROTON”) and Keretapi Tanah Melayu Berhad (“KTMB”).
He is a Non-Executive Director nominated by the Minister of
Finance (Inc), the Special Shareholder of Telekom Malaysia and
has never been charged for any offence. He has no family
relationship with any Director of the Company nor any conflict of
interest with the Company.
He has held several positions in the Government sector, including
Assistant Secretary at the Ministry of Education. He served as
Program Co-ordinator for the National Computer Training Center
at INTAN, and as Director of the Information Technology Division
of the Malaysian Administration Modernisation and Management
Planning Unit (“MAMPU”) in the Prime Minister’s Department.
He served as the Director of INTAN before becoming Deputy
Secretary-General, Communications and Multimedia, Ministry of
Energy, Communications and Multimedia in 1999. He was appointed
as Secretary General of the Ministry from November 2000.
Datuk Dr. Halim is currently a member of the Board Employees’
Share Option Scheme Committee and also a Board Member of a
number of subsidiaries of Telekom Malaysia. He is also a Director
of Tenaga Nasional Berhad (“TNB”) and Pos Malaysia Berhad
(“POS MALAYSIA”). He is a Non-Executive Director nominated by
the Minister of Finance (Inc), the Special Shareholder of Telekom
Malaysia and has never been charged for any offence. He has no
family relationship with any Director of the Company nor any
conflict of interest with the Company.
25
Y.B. JOSEPH SALANG GANDUM
Independent Non-Executive Director
Y.B. Joseph Salang Gandum was first appointed to the Board on
6 January 1987. He graduated with a Bachelor of Arts (Econs.) in
1974 from Western Maryland College, Maryland, USA and a
DATO’ DR. MOHD MUNIR BIN ABDUL MAJID
Senior Independent Non-Executive Director
Dato’ Dr. Mohd Munir was appointed to the Board on 22 May
2000. He graduated with a Bachelor of Science (Economics) and
a Ph.D. in International Relations from the London School of
Economics and Political Science (LSE), UK.
Masters degree in Business Administration from Iran Center for
Management Studies in 1975.
He formerly served as Regional Manager (East Malaysia) with
Bank Pembangunan Malaysia Berhad (East Malaysia), Trade
Manager of MISC Coastal Services Sdn. Bhd., Corporate Manager
and Manager of Location (Kuching) of Standard Chartered Bank
Malaysia Berhad.
He was the First Executive Chairman of the Securities Commission
(SC), a position he held for two terms from March 1993 until
February 1999. Upon his return from abroad, where he worked at
the LSE and for Daiwa Europe N.V. in London, he served from
1979-1986 in various positions in the editorial department of The
New Straits Times Press Berhad (“NSTP”) ending up as Group
Editor (English) in NSTP. He was the Chief Executive of Commerce
International Merchant Bankers Berhad (“CIMB”) from 1986, and
was its Executive Chairman before resigning to become Executive
Chairman of the SC.
Y.B. Joseph is now a businessman and Member of Parliament for
Julau Constituency, Sarawak. He is also a Director of Tabak
Holdings Berhad and Borneo Securities Holdings Berhad.
He currently serves as a Non-Independent Non-Executive Member
of the Board Audit Committee and Board Tender Committee
(TelCo). He is also a Board Member of a number of subsidiaries
of Telekom Malaysia. Y.B. Joseph has never been charged for any
offence and has no family relationship with any Director of the
Company nor any conflict of interest with the Company.
26
He has also served as Director and Chairman of several other
companies and council member of government agencies during
his career. Some of the prominent ones include the Association
of Merchant Banks, KLOFFE Sdn. Bhd., the Kuala Lumpur Stock
Exchange (KLSE), the Council of Malaysian Industrial Development
Authority (MIDA) and the Foreign Investment Committee (FIC) of
the Prime Minister’s Department. He is the Chairman of Celcom
(Malaysia) Berhad and also a Director of Technology Resources
Industries Berhad and Saujana Resorts (Malaysia) Berhad.
Dato’ Dr. Mohd Munir currently serves as the Independent
Non-Executive Chairman of the Board Audit Committee and a
Member of Board Nominating and Remuneration Committee. He
is also a Board Member of a number of subsidiaries of Telekom
Malaysia. He has never been charged for any offence. He has no
>>
Y.B. DATO’ IR. HAJI MOHD ZIN BIN MOHAMED
Y.B. Dato’ Ir. Haji Mohd Zin was appointed to the Board on 22 May 2000. He is a civil engineer by profession, having
obtained his Bachelor and Masters degrees from Bradley University, United States of America.
As a professional, he owns a consultancy firm in Civil and Engineering Works. He has served various government bodies
and is currently appointed on the Boards of University Technology Mara (UiTM) and Universiti Telekom Sdn. Bhd.
(Multimedia University). He is also a director of Brisdale Holdings Berhad, a member of the Malaysian Institute of Engineers
(MIEM) and the Board of Engineers of Malaysia.
He is also an experienced politician having been involved in Malaysian politics for almost 20 years. Y.B. Dato’ Ir. Haji Mohd
Zin currently is a Member of Parliament for Shah Alam Constituency, Deputy Head of the UMNO Shah Alam Division,
Deputy Chairman of Selangor’s Council of Culture & Tourism, a Board Member of Federal Agricultural Marketing Authority
(FAMA), a Board Member of Yayasan Selangor, a Counselor with the Municipal Council of Shah Alam, Selangor State
Assemblyman and currently the President of Malaysian Parliament Government Backbencher Club (BBC).
Y.B. Dato’ Ir. Haji Mohd Zin currently serves as a member of Board Tender Committee (TelCo) and is also a Board Member
of a number of subsidiaries of Telekom Malaysia. He has never been charged for any offence and has no family relationship
with any Director of the Company nor any conflict of interest with the Company.
27
DATO’ LIM KHENG GUAN
IR. PRABAHAR N.K. SINGAM
Dato’ Lim Kheng Guan was appointed to the Board of Telekom
Ir. Prabahar was appointed Director of Telekom Malaysia on
Malaysia on 23 June 2000.
23 June 2000. He is an engineer by profession and has a
Bachelor of Science (Civil Engineering) degree from Portsmouth
He is a Chartered Accountant by profession and an Associate
Polytechnic, United Kingdom in 1985.
Member of the Malaysian Association of Certified Public
Accountants, Fellow of Australian Society of Certified Practicing
A member of the Board of Engineers Malaysia, Institute of
Accountants, Associate of the Australian Institute of Bankers and
Engineers Malaysia and Environment and Research Association,
a Member of the Malaysian Institute of Management. He has also
Malaysia (“ENSEARCH”). He is a professional engineer who has
attended advanced management programs at Manchester
wide experience in the civil engineering sector, especially in the
Business School, INSEAD and London Business School.
areas of consultancy, contracting, project management and
project financing.
He has more than 30 years of experience in accounting,
management consulting and senior managerial positions in local
Ir. Prabahar currently serves as an Independent Non-Executive
and multinational public listed companies. Currently he is the
Member of the Board Audit Committee and Board Nominating and
Executive Director of Malaysian Management Consultants Sdn
Remuneration Committee. He is also a Board Member of a
Bhd and also a director of Pacific & Oriental Berhad, Technology
number of subsidiaries of Telekom Malaysia. He has never been
Resources Industries Berhad and Celcom (Malaysia) Berhad.
charged for any offence and has no family relationship with any
Director of the Company nor any conflict of interest with the
Dato’ Lim Kheng Guan currently serves as an Independent
Non-Executive Member of the Nominating and Remuneration
Committee, Board Audit Committee and also a Board Member of
a number of subsidiaries of Telekom Malaysia. He has never been
charged for any offence and has no family relationship with any
Director of the Company nor any conflict of interest with the
Company.
28
Company.
>>
ROSLI BIN MAN
Rosli bin Man was appointed to the Board on 15 July 2000. He has more than 25 years of experience in the
telecommunications industry. Rosli holds a Bachelor in Science in Electrical and Electronic Engineering (specialising in
Electrical Design and Instrumentation) from University of Glasgow, United Kingdom and a Diploma in Electrical and
Electronic Engineering (specialising in Communications) from Technical College, Kuala Lumpur.
He joined Jabatan Telekom Malaysia (JTM) in 1976 as Assistant Controller where he gained wide exposure in
telecommunication services including the task to implement the country’s first mobile telecommunications service i.e. Atur
450. In 1985, he made a career move to the private sector by joining the Fleet group as its Group Manager, Technical
Services where he was part of the team responsible in overseeing the roll-out and operations of the nation’s first privately
operated terrestrial television station namely Sistem Televisyen Malaysia Berhad (“TV3”). From 1988 to 1996, he was
instrumental in setting up the first privately owned telecommunications company in Malaysia i.e. Celcom (M) Sdn. Bhd.
(“Celcom”), catering for the cellular mobile telecommunication business. He left Celcom as its President in 1996 to join
Prismanet Sdn. Bhd. as Managing Director and held the position until November 1998. In July 2000, he joined Natrindo
Telpon Sellular (“NTS”), the GSM 1800 cellular operator in East Java, Indonesia. As the Chief Executive Officer, he was
responsible for the planning, development, successful roll-out of the network and the day-to-day operations of the
business. He was then appointed as Deputy Chief Executive Officer of Lippo Telecom to oversee NTS planning, roll-out and
operation of NTS National Cellular Operation. He left NTS in January 2002.
Rosli is also a Director of Technology Resources Industries Berhad and Celcom (Malaysia) Berhad and he currently serves
as member of a number of subsidiaries of Telekom Malaysia. He is a Non-Executive Director nominated by the Company’s
Substantial Shareholder, Khazanah Nasional Berhad and has never been charged for any offence. He has no family
relationship with any Director of the Company nor any conflict of interest with the Company.
29
TAN POH KEAT
MOHAMMAD ZANUDIN BIN AHMAD RASIDI
Alternate Director to Dato’ Abdul Majid bin Haji Hussein
Tan Poh Keat was appointed Director of Telekom Malaysia on
29 August 2000. He graduated with a Bachelor of Engineering
Mohammad Zanudin was appointed as Alternate Director to Dato’
(Electrical) degree and Master of Engineering degree from
Abdul Majid bin Haji Hussein on 12 December 2000. He has a
Auckland University, respectively, under the Colombo Plan
Bachelor of Economics from Universiti Kebangsaan Malaysia and
Scholarship.
a Master Degree in Public Management from Carnegie-Mellon
University, United States. He has also completed the Harvard
He joined Jabatan Telekom Malaysia (JTM) in 1962 as an
International Tax Program at the Harvard University in 1992.
engineer and has served in various appointments, the last being
Deputy Director General. Subsequently he joined Telekom
He began his career with the Treasury in 1984 as an Assistant
Malaysia as Director, Networks Service and retired at the end of
Secretary in the Economic and International Division. After four
1991. Currently, he is an independent consultant to a number of
years, he was assigned to the Tax Analysis Division where he was
local and international companies.
directly involved in formulating policies and strategies for budget
proposals. He was then promoted to be Principal Assistant
Tan Poh Keat is also a Director of Technology Resources
Secretary in 1998. Subsequently, he was transferred to the Public
Industries Berhad, Celcom (Malaysia) Berhad and VADS Berhad.
Enterprises, Privatisation and Minister of Finance Incorporated
He currently serves as a Member of the Board Tender Committee
Coordination Division as Principal Assistant Secretary in November
(TelCo) and a Board Member of a number of subsidiaries of
2000, a position he holds until today.
Telekom Malaysia. He is a Non-Executive Director nominated by
the Minister of Finance (Inc), the Special Shareholder of Telekom
Mohammad Zanudin is also the Alternate Member/Director to
Malaysia and has never been charged for any offence. He has no
Dato’ Abdul Majid on the Board Employees’ Share Option Scheme
Committee and the Board Tender Committee (TelCo). He has
never been charged for any offence and has no family relationship
with any Director of the Company nor any conflict of interest with
the Company.
30
SURIAH BINTI ABDUL RAHMAN
Alternate Director to Datuk Dr. Halim bin Shafie
Suriah was appointed to the Board on 24 November 2000 as
Alternate Director to Datuk Dr. Halim bin Shafie. She holds a
Bachelor of Arts (Hons) from University of Malaya and a Master
of Arts from the University of Leeds, United Kingdom. She began
her career in the public service as an Assistant Secretary in
Treasury and rose to the position of Principal Assistant Secretary
in the Government Procurement Management Division.
She then served various Ministries and Government Agencies
including the Social Economic Research Unit, Prime Minister’s
Department, Ministry of Housing and Local Government, Malaysian
Institute of Maritime Affairs, Public Service Department and
Implementation Coordination Unit of the Prime Minister’s
Department before assuming her current position as Deputy
Secretary General 1, Ministry of Energy, Communications and
Multimedia on 1 November 2000.
Suriah is also the Alternate Member/Director to Datuk Dr. Halim
on the Board Employees’ Share Option Scheme Committee and all
the subsidiaries of TM, where Datuk Dr. Halim has been appointed
as a Director. She has never been charged for any offence and
has no family relationship with any Director of the Company nor
any conflict of interest with the Company.
31
group business committee
sitting from left to right:
32
Christian de Faria
Dato’ Dr. Abdul Rahim Haji Daud
Chief Executive Officer, TM International Sdn. Bhd.
(since February 2003)
Deputy Chief Executive/Executive Director,
Baharum Salleh
Dr. Idris Ibrahim
Chief Executive Officer, TM Net Sdn. Bhd.
Chief Operating Officer, TM TelCo
Dato’ Dr. Ir. Haji Mohd Khir Harun
Hamzah Yacob
Chief Executive Officer, TM Cellular Sdn. Bhd.
Chief Executive Officer, TM Facilities Sdn. Bhd.
Dato’ Dr. Md Khir Abdul Rahman
Adnan Rofiee
Chief Executive, Telekom Malaysia Berhad
Senior Vice President, Major Business &
Government, Telekom Malaysia Berhad
standing from left to right:
Gazali Harun
Haji Mohd Yahaya Mohd Shariff
Acting Chief Financial Officer,
Senior Vice President, Network Services, Telekom Malaysia Berhad
Md Fauzi Said
Dato’ Abdul Malek Mohamad
Head, Consumer and Business,
Senior Vice President, Group Human Resource Management,
(since June 2002)
Haji Romli Hussin
Ranbir Singh Nanra
Vice President, Customer Network Operations,
Senior Vice President, Group Marketing, Telekom Malaysia Berhad
(since February 2003)
Haji Hamis Hasan
Abdul Majid Abdullah
Chief Financial Officer, TM Telco
Vice President, Corporate Strategy & Planning, Telekom Malaysia Berhad
Kairul Annuar Mohamed Zamzam
General Manager, Corporate Affairs, Telekom Malaysia Berhad
33
“managing with integrity, transparency and
accountability – intrinsic components in the
preservation of shareholder value”
corporate governance statement
The Board of Directors has continued its commitment in maintaining high standards of
corporate governance and the effective application of the principles and best practices as
set out in the Malaysian Code on Corporate Governance (“the Code”) throughout the Group.
Following the adoption of an Enterprise Risk Management Programme in 2002, the Board
considers that the Company has fully complied with Part I of the Code. The manner in
which the Company has applied the principles and best practices of the Code is set out
in this statement.
BOARD OF DIRECTORS
An experienced Board consisting of members with a wide range of business, financial, technical and public service background leads and
controls the Group. This brings depth and diversity in expertise and perspectives to the leadership of a highly regulated telecommunication
business. Directors’ biographies, appearing on pages 22 and 31 illustrates an impressive spectrum of experiences vital to the direction and
management of a telecommunication company.
During the year, fourteen (14) board Meetings were held and the attendance of individual Directors is recorded in the Statement
accompanying the Notice of Annual General Meeting.
Board Composition and Balance
The total of twelve (12) Directors of the Board comprise two (2) Executive Directors designated as the Chief Executive and Deputy Chief
Executive/Executive Director, six (6) Non-Executive Directors and four (4) Independent Non-Executive Directors representing one third of
the Board.
The functions of the Non-Executive Chairman and the Chief Executive are distinct and separately defined. Y.Bhg. Dato’ Dr. Mohd Munir
Abdul Majid is the Senior Independent Non-Executive Director, to whom concerns pertaining to the Group may be conveyed by shareholders
and the public.
The Board sets general policies and monitors the implementation of those policies by the Executive Directors. The Executive Directors are
obliged to report and discuss at board meetings all material matters currently or potentially affecting the Group and its performance,
including all strategic projects and regulatory developments. The Chairman is responsible in liaising between the Board and the
Management, thus ensuring the integrity and effectiveness of the relationship between the Non-Executive and Executive Directors.
34
The Non-Executive Directors provide considerable depth of knowledge collectively gained from experiences in a variety of
public and private companies. The Independent Non-Executive Directors provide unbiased and independent views in
ensuring that the strategies proposed by the management are fully deliberated and examined, in the interest of
shareholders, employees, customers, and the many communities in which the Group conducts its business.
Board Appointment Process
The Board has put in place formal and transparent procedures for the appointment of new Directors. These procedures
cater for the appointment of nominees by major shareholders and the appointment of Non-Executive Directors arising from
casual vacancies. According to the procedures, the Nominating and Remuneration Committee will consider all nominees to
the Board after taking into account the required mix of skills and experience and other qualities, before making a
recommendation to the Board and major shareholders.
Re-Election
In accordance with the Company’s Articles of Association all Directors are subject to re-election by rotation once at least
every three (3) years and a re-election of Directors shall take place at each Annual General Meeting. Following an
amendment to the Articles of Association, Executive Directors also rank for re-election by rotation as provided for in the
Kuala Lumpur Stock Exchange (KLSE) Listing Requirements.
The re-election of Directors ensures that shareholders have a regular opportunity to reassess the composition of the Board.
Names of Directors submitted to shareholders for election are enumerated in the Statement accompanying the Notice of
Annual General Meeting.
Directors’ Training
An induction programme is provided for newly appointed Directors. All the Directors have attended and successfully
completed the Mandatory Accreditation Programme conducted by the Research Institute of Investment Analysts Malaysia.
During the year, the Directors have also attended various seminars and international conventions to keep abreast of
developments, particularly in the telecommunications industry.
Directors’ Remuneration
The Nominating and Remuneration Committee has been entrusted to recommend to the Board a framework for the
remuneration of the Executive and Non-Executive Directors.
The Executive Directors’ remuneration comprises a salary, allowances, bonuses and other customary benefits as appropriate.
Salary reviews take into account market rates and the performance of the individual and the Group.
35
Remuneration of Non-Executive Directors is based on a standard fixed fee. Additional allowances are also paid in accordance
with the number of meetings attended during the year.
Fees payable to the Directors are subject to annual approval by shareholders at the Annual General Meeting (AGM). Details
of the nature and amount of major elements in the remuneration of each Director of the Company are as follows:
Directors
Fees &
Allowances
RM
Salary
RM
Bonuses
RM
Benefits-in
kind
RM
Total
RM
Executive
264,000.00
62,450.00
33,000*
8,900.00
368,350.00
252,000.00
37,590.00
30,000*
8,900.00
328,490.00
Non-Executive
Tan Sri Dato’ Ir. Muhammad Radzi
bin Hj Mansor
—
158,740.00
—
10,200.00
168,940.00
—
35,100.00
—
1,500.00
36,600.00
—
36,100.00
—
1,500.00
37,600.00
—
141,500.00
—
33,990.00
175,490.00
Y.B. Dato’ Ir. Haji Mohd Zin bin
Mohamed
—
124,160.00
—
33,990.00
158,150.00
Dato’ Dr. Mohd Munir bin
Abdul Majid
—
46,100.00
—
1,500.00
47,600.00
—
70,480.00
—
1,500.00
71,980.00
—
87,110.00
—
1,500.00
88,610.00
Rosli bin Man
—
104,400.00
—
1,500.00
105,900.00
Tan Poh Keat
—
62,150.00
—
1,500.00
63,650.00
Alternate Directors
Mohammad Zanudin bin Ahmad
Rasidi (Alternate to Dato’
Abdul Majid bin Haji Hussein)
—
9,600.00
—
1,500.00
11,100.00
Suriah bt Abdul Rahman
(Alternate to Datuk
Dr. Halim bin Shafie)
—
8,900.00
—
1,500.00
10,400.00
516,000.00
984,380.00
63,000.00
109,480.00
1,672,860.00
TOTAL
Notes: * Bonus for financial year ended 31 December 2001 paid in 2002
SUPPLY OF INFORMATION TO THE BOARD
Directors are sent an agenda and a full set of board papers for each agenda item to be discussed, well in advance of
board meetings. The process of Board papers approval, compilation and dissemination is expedited via an efficient and
secure electronic Board Document Management System. This facilitates an informed decision-making process within the
Group.
36
The Board reviews quarterly management performance reports which include comprehensive reviews and analysis of major
business and financial issues, customer satisfaction indices, market share, key business indicators, and the quality of
products and services. The Board also considers and endorses recommendations of its Board Committees, major operating
units and subsidiaries of the Company.
All the Directors have direct access to the advice and services of the Company Secretary. The Board is advised and updated
on statutory and regulatory requirements pertaining to their duties and responsibilities as well as appropriate procedures
for management of meetings.
Procedures are in place for Directors, in furtherance of their duties, to seek independent professional advice where
necessary at the Company’s expense in order to fulfil their duties and specific responsibilities.
BOARD COMMITTEES
The Board delegates certain responsibilities to Board Committees, namely, the Audit Committee, Nominating and
Remuneration Committee, Tender Board Committee (TelCo) and Employee Share Option Scheme (ESOS) Committee. All
committees have written terms of reference and operating procedures and the Board receives reports of their proceedings
and deliberations. The Chairmen of the various committees report the outcome of the committee meetings to the Board
and these are incorporated in the minutes of the full Board meeting.
Audit Committee
A full Audit Committee report enumerating its membership, its role and its activities during the year is set out in pages
44 to 47.
Nominating and Remuneration Committee
Membership:Tan Sri Dato’ Ir. Muhammad Radzi Haji Mansor (Chairman – Non-Independent Non-Executive)
Dato’ Dr. Mohd Munir Abdul Majid (Independent Non-Executive)
Ir. Prabahar N.K. Singam (Independent Non-Executive)
Dato’ Lim Kheng Guan (Independent Non-Executive)
Objectives:The main objectives of the Nominating and Remuneration Committee are:• to ensure that the Directors of the Board bring characteristics to the Board, which provide a required mix of
responsibilities, skills and experience.
• to set the policy framework and to make recommendations to the Board on all elements of the remuneration, terms
of employment, reward structure and fringe benefits for Executive Directors and other top selected management
positions with the aim to attract, retain and motivate individuals of the highest quality.
Principal Duties and Responsibilities:• Recommend to the Board, candidates for directorship on the Board of the Company and its Group as well as
membership of all other Board Committees. In making its recommendations, the Committee considers candidates from
the Management for directorship in its Group of companies as proposed by the Chief Executive;
• Examine the size of the Board with a view to determine the number of Directors on the Board in relation to its
effectiveness and review its required mix of skills and experience and other qualities;
• Recommend suitable orientation, educational and training programmes to continuously train and equip existing and
new Directors;
• Set, review, recommend and advise the policy framework on all elements of the remuneration such as reward structure,
fringe benefits and other terms of employment of the Executive Directors having regard to the overall Group policy
guidelines and framework;
37
•
•
Advise the Board on the performance of the Executive Directors and an assessment of their entitlement to performance
related pay and advise the Executive Directors on the remuneration terms and conditions of senior management;
Establish and recommend a formal and transparent procedure for developing policy on the remuneration of the NonExecutive Chairman, Non-Executive Directors and Board Committees, which recommendation shall be decided by the
Board of Directors as a whole.
The Nominating and Remuneration Committee has the authority to examine a particular issue and report back to the Board
with recommendations. The determination of remuneration packages of Directors is a matter for the Board as a whole and
individuals are required to abstain from discussion on their own remuneration. The Committee met eight (8) times during
the year.
Tender Board Committee (TelCo)
Membership:Dato’ Abdul Majid Haji Hussein (Chairman – Non-Independent Non-Executive)
Dato’ Dr. Md Khir Abdul Rahman (Non-Independent Executive)
Dato’ Dr. Abdul Rahim Haji Daud (Non-Independent Executive)
Y.B. Joseph Salang Gandum (Non-Independent Non-Executive)
Y.B. Dato’ Ir. Haji Mohd Zin Mohamed (Independent Non-Executive)
Tan Poh Keat (Non-Independent Non-Executive)
Mohammad Zanudin Ahmad Rasidi (Alternate to Dato’ Abdul Majid Haji Hussein – Non-Independent Non-Executive)
The principal duties and responsibilities of the Tender Board Committee (TelCo) are to ensure that the procurement process
complies with the relevant policies and requirements and to consider, evaluate and approve or recommend awards which
are beneficial to the Company taking into consideration various factors such as price, usage of product and services, its
quantity, duration of service and other relevant factors. The Committee met eight (8) times during the year.
ESOS Committee
Membership:Tan Sri Dato’ Ir. Muhammad Radzi Haji Mansor (Chairman – Non-Independent Non-Executive)
Dato’ Dr. Md Khir Abdul Rahman (Non-Independent Executive)
Dato’ Dr. Abdul Rahim Haji Daud (Non-Independent Executive)
Dato’ Abdul Majid Haji Hussein (Non-Independent Non-Executive)
Datuk Dr. Halim Shafie (Non-Independent Non-Executive)
Mohammad Zanudin Ahmad Rasidi (Alternate to Dato’ Abdul Majid Haji Hussein – Non-Independent Non-Executive)
Suriah Abdul Rahman (Alternate to Datuk Dr. Halim Shafie – Non-Independent Non-Executive)
The principal duties and responsibilities of the ESOS Committee are to construe and interpret the Employee Share Option
Scheme (ESOS) and options granted under it, to define the terms therein and to recommend to the Board to establish,
amend and resolve rules and regulations relating to the scheme and its administration. The Committee only meets as and
when required.
Apart from the above, specific and ad-hoc Board Committees have been established during the year on need basis to
deliberate and expedite decision-making processes on specific aspects of the business and corporate exercises.
RELATIONSHIP AND COMMUNICATION WITH SHAREHOLDERS/INVESTORS
The Board acknowledges its role in representing and promoting the interests of shareholders and that it is accountable to
the shareholders for the performance and activities of the Group. Formal channels of communication are used to give an
account to shareholders on the performance of the Group.
38
One of the most important means of communication with shareholders and investors is through the annual report, which
is comprehensive with sufficient details about financial results and activities of the Group. The annual report published in
Bahasa Malaysia and English, is despatched to shareholders. At the same time, quarterly financial results are announced
to the KLSE in a timely manner. Established procedures are in place to ensure the timely public release of share price
sensitive information.
The AGM provides an open forum at which shareholders and investors are informed of current developments where
questions can be directed to Board members and Committees Chairmen. A press conference is held immediately after the
AGM where the media is advised on the status of resolutions that were considered. The Chairman, Executive Directors and
Chief Financial Officer are present at the press conference to clarify and explain issues raised by the media.
Where Extraordinary General Meetings are held to obtain shareholders’ approval on business or corporate proposals,
comprehensive circulars to shareholders are sent within prescribed deadlines in accordance with regulatory and statutory
provisions.
To ensure easy and convenient access to the Group’s financial information by shareholders and investors, press releases,
annual reports and other corporate information, a web site is maintained at http://www.telekom.com.my.
The KLSE also provides for the Company to electronically publish all its announcements including its quarterly results and
Annual Report through KLSE internet web site at http://www.announcements.klse.com.my.
INVESTOR RELATIONS
In line with good corporate governance practices, the Company’s Investor Relations (IR) unit proactively and actively
disseminate relevant information about the Group to the investment community, specifically the institutional fund managers
and analysts.
Telekom Malaysia is one of the most actively covered companies in the Kuala Lumpur Composite Index with regular
tracking by more than 18 research brokers, 3 rating agencies and over 200 domestic and foreign institutional investors,
both in the equity and debt markets. The IR unit maintains very close contact with them, to ensure that the Group’s
strategies, operational activities and financial performance are well understood and that such information is made available
to them in a timely manner.
Regular contacts to provide accurate and timely information are established through roadshows, company visits, one on
one meetings, teleconferences and e-mails. Telekom Malaysia participated actively in more than 10 local and overseas
investor conferences in New York, London, Beijing, Hong Kong and Singapore, in the year 2002 including the KLSE Investor
Week 2002.
Telekom Malaysia is one of the few corporations in Malaysia that conducts teleconferences every quarter to brief analysts
on its quarterly results. At these sessions, analysts are not only given a comprehensive review of the Group’s financial
performance but are also given the opportunity to clarify whatever queries they may have in question and answer sessions.
The senior management of the Group, the Chief Executive, Deputy Chief Executive/Executive Director, Chief Financial Officer,
Vice Presidents and heads of the operating companies are actively involved in IR activities, meeting fund managers and
analysts regularly.
Information that is disseminated to the investment community conforms to KLSE disclosure rules and regulations. Care
has been taken to ensure that no market sensitive information such as corporate proposals, financial results and other
material information is disseminated to any party without first making an official announcement to the KLSE.
39
ACCOUNTABILITY AND AUDIT
Financial Reporting
The Board aims to provide and present a balanced and meaningful assessment of the Group’s financial performance and
prospects at the end of each financial year, primarily through annual financial statements, quarterly and half yearly
announcement of results to shareholders as well as the Chairman’s Statement and review of operations in the annual
report. The Board is assisted by the Audit Committee to oversee the Group’s financial reporting processes and the quality
of its financial reporting.
Directors’ Responsibility Statement
The Directors are required by the Companies Act, 1965 to ensure that financial statements prepared for each financial year
give a true and fair view of the state of affairs of the Group and the Company as at the end of the financial year and of
the results and cash flow of the Group and the Company for the financial year. The Directors consider that in presenting
these financial statements, the Group and the Company has used appropriate accounting policies, consistently applied and
supported by reasonable assumptions and estimates.
The Directors have a general responsibility for ensuring that the Company and the Group keep accounting records and
financial statements, which disclose with reasonable accuracy the financial position of the Company and the Group. Due
care and reasonable steps are taken by the Directors to ensure that such financial statements comply with the Companies
Act, 1965, applicable approved accounting standards in Malaysia and other regulatory provisions.
Internal controls
The Board acknowledges its overall responsibility for maintaining a sound system of internal controls to safeguard
shareholders’ investment and Group’s assets. The Statement of Internal Control is set out on pages 48 to 49 of the annual
report providing an overview of the state of internal controls within the Group.
Relationship with Auditors
An appropriate relationship is maintained with the Company’s Auditors through the Audit Committee. The Audit Committee
has been explicitly accorded the power to communicate directly with both the external Auditors and internal Auditors.
The role of the Audit Committee in relation to the Auditors is set out in the Terms of Reference on page 47.
Audit Committee
The Audit Committee also conducts review of the Internal Audit Function in terms of its authority, resources and scope as
defined in the Internal Audit Charter. Furthermore it ensures the independence of the internal auditors and unrestricted
access to information and people in the Group. Highlights of activities conducted by the Committee are detailed in the
Audit Committee Report on page 45.
Signed on behalf of the Board of Directors in accordance with the resolution passed on 27 February 2003.
TAN SRI DATO’ IR. MUHAMMAD RADZI HAJI MANSOR
Chairman
40
additional compliance information
The following information is provided in compliance with the Kuala Lumpur Stock Exchange Listing Requirements:-
1. NON-AUDIT FEES
The amount of non-audit fees paid and payable to the external auditors and their affiliated companies by the Group for the financial
year ended 31 December 2002 is as follows:a)
PricewaterhouseCoopers, Malaysia
• due diligence review for acquisition of investments
• reviews of financial information and attestation work including reporting accountants services
for the listing of a subsidiary company
b)
PricewaterhouseCoopers Taxation Services Sdn. Bhd.
• due diligence review for acquisition of investments
• tax advisory services
RM
1,719,000
620,000
131,000
377,020
2,847,020
2. MATERIAL CONTRACTS INVOLVING DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS
There were no material contracts entered into by the Company and/or its subsidiaries involving Directors and major shareholders’
interests either subsisting as at 31 December 2002 or entered into since the end of the previous financial year ended 31 December
2001 except for those disclosed as recurrent related party transactions of revenue or trading nature or related party transactions.
3. RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE (“RRPT”)
The aggregate value of RRPT entered into by the Company and/or its subsidiaries during the financial year are as follows:Related Parties
Type of transactions
Dato’ Dr. Abdul Rahim Haji Daud,
a director of both Telekom Malaysia
and Meganet Communications
Sdn. Bhd. (“MCSB”) and hold shares
in Telekom Malaysia
Transactions between Telekom Malaysia (purchaser)
and MCSB (supplier) for the following:•
Intelligent Building System package
for Menara Telekom
•
Design, supply, deliver, testing and
commissioning of security management systems
•
Rental of vehicle
•
Telekom Malaysia Headquarters Information
Technology (“IT”) Migration projects
•
National Network Operation Centre, Cyberjaya
•
Information Technology infrastructure
•
IT Consultancy & Migration projects for
Putrajaya & Wisma Putra
•
Security Manhole System for Putrajaya
•
Car parking system
Transacted value during
the financial year ended
31 December 2002
(RM)
4,869,561
12,805,977
130,873
2,541,928
0
3,495,798
153,720
0
2,559,000
41
additional compliance information
Related Parties
Sapura Telecommunications Berhad
(“STB”), major shareholder of Telekom
Smart School Sdn. Bhd. (“TSS”)
Transaction between TSS (purchaser) and STB (supplier)
Dato’ Dr. Md Khir Abdul Rahman and
Tan Poh Keat, are directors of
Telekom Malaysia and Telekom
Technology Sdn. Bhd. (“TTSB”) and
hold shares in Telekom Malaysia
Dato’ Dr. Md Khir Abdul Rahman,
a director for both Telekom Malaysia
and Telekom Applied Business
Sdn. Bhd. (“TAB”) and hold
shares in Telekom Malaysia
Tan Poh Keat, a director of both
Telekom Malaysia and TTSB and
hold shares in Telekom Malaysia
a director of Telekom Malaysia,
TTSB and TAB, and hold shares in
Telekom Malaysia
Prism Holdings Limited (“PHL”),
a major shareholder of Prism
Transactive (M) Sdn. Bhd. (“PTSB”),
and has 30% interests in TAB,
a subsidiary of Telekom Malaysia
42
•
Design, supply, delivery, installation, testing, and
commissioning of a customised computer system
for Smart Schools in Putrajaya
31 December 2002
(RM)
3,965,589
Transaction between TTSB (purchaser) and
Telekom Malaysia (supplier)
•
Office space rental from Telekom Malaysia
•
Lease of vehicle from Telekom Malaysia
286,891
59,760
Transaction between Telekom Malaysia and TAB
•
Office space rental at Telekom Malaysia IT
Complex Cyberjaya, Selangor
233,268
•
Intelligent Office Automation System for new
Headquarters
•
Network Integrated Planning & Provisioning System
1,716,955
•
Fraud Prevention and Management System
2,250,300
•
Integrated Messaging Exchange System
931,044
•
Amper Payphone Management System
480,000
0
Transaction between TTSB (purchaser) and
TAB (supplier)
•
Develop, install and commission of
320 transaction kiosks
2,386,870
•
Install and commission payment switch
4,717,702
Transaction between TAB (purchaser) and
PTSB (supplier)
•
Purchase of crypto server and purchase of
transaction kiosk
0
Related Parties
Tan Sri Dato’ Ir Muhammad Radzi
Haji Mansor and Dato’ Dr. Abdul
Rahim Haji Daud are both
directors of TM Cellular Sdn. Bhd.
(“TM Cellular”) and hold shares in
Telekom Malaysia
Transaction between TM Cellular and TAB
•
Develop, install and commission Call Detail
Record Auto Back Up System
31 December 2002
(RM)
171,000
a director for Telekom Malaysia,
TM Cellular and TAB, and hold shares
in Telekom Malaysia
Tan Sri Dato’ Ir. Muhammad Radzi
Haji Mansor and Dato’ Dr. Abdul
Rahim Haji Daud are both
directors of Fiberail Sdn. Bhd. (“FSB”)
and Telekom Malaysia and hold shares
in Telekom Malaysia
Khazanah Nasional Berhad, common
major shareholder of Telekom
Malaysia and Perusahaan Otomobil
Nasional Berhad (“PROTON”)
Transactions between Telekom Malaysia and FSB
•
Office space rental from Telekom Malaysia
445,320
•
Rental of vehicles from Telekom Malaysia
468,448
Transaction between Telekom Malaysia (purchaser) and
PROTON (supplier)
•
Purchase of motor vehicles
908,668
4. IMPOSITION OF SANCTIONS/PENALTIES
There were no public sanctions and/or public penalties imposed on the Company and its subsidiaries, directors or management by
the relevant regulatory bodies during the financial year.
43
audit committee report
sitting from left to right:
Chairman
standing from left to right:
Hashim bin Mohammed
Group Chief Auditor/
Secretary to Audit Committee
44
1. MEMBERSHIP
The Audit Committee comprises of three Independent Non-Executive Directors and two Non-Independent NonExecutive Directors of the Board as follows:Dato’ Dr. Mohd Munir bin Abdul Majid – Chairman, Independent Non-Executive Director
Dato’ Abdul Majid bin Haji Hussein – Non-Independent Non-Executive Director
Y.B. Joseph Salang Gandum – Non-Independent Non-Executive Director
Dato’ Lim Kheng Guan – Independent Non-Executive Director
Ir. Prabahar N.K. Singam – Independent Non-Executive Director
Hashim bin Mohammed – Group Chief Auditor/Secretary to Audit Committee
Members of the Audit Committee shall not have a relationship which in the opinion of the Board of Directors, would
interfere with the exercise of independent judgement in carrying out the functions of the Audit Committee. Members
of the Audit Committee shall possess sound judgement, objectivity, independent attitude, management experience and
knowledge of the industry. Dato’ Lim Kheng Guan who is an independent non-executive director is a member of
Malaysian Institute of Accountants (MIA).
2. MEETINGS
The committee had four (4) meetings in the financial year 2002. Y.Bhg. Dato’ Dr. Mohd Munir bin Abdul Majid,
Y.B. Tuan Joseph Salang Gandum and Ir. Prabahar N.K. Singam attended all four (4) meetings, whilst Y.Bhg. Dato’
Abdul Majid bin Hj. Hussein and Dato’ Lim Kheng Guan attended three (3) out of the four (4) meetings.
The Group’s Deputy Chief Executive, Acting Group Chief Financial Officer and General Manager, Group Finance
representing management attended all of the four (4) meetings upon invitation by the Chairman of the Committee.
The Group Internal Auditors attended all these meetings whilst the External Auditor, PricewaterhouseCoopers (PwC)
attended the meetings upon invitation by the Chairman of the Committee. PwC auditors met with the Chairman of
the Audit Committee prior to the meetings without the management.
3. SUMMARY OF ACTIVITIES
The Audit Committee carried out its duties as set out in the terms of reference as in page 47.
Apart from its duties as set out in its terms of reference, the Audit Committee also reviewed and deliberated on
reports and updates as provided by:
The Task Force for Best Practices (TFBP) which was established by the Audit Committee in the year 2001 mainly to
support them on:
•
New updates and developments of best business practices and exposure drafts, principally on corporate
governance, statutory and regulatory requirements, compliance to accounting standards and other business
guidelines. The TFBP consistently submitted their reports in every Audit Committee Meetings.
•
Coordinating and tracking the implementation of an enterprise risk management programme to institute risk culture,
practices and governance by management to achieve business excellence and support overall group objectives.
•
Reviewing and recommending the Risk and Internal Control Policy for the Audit Committee’s approval.
•
Monitoring and coordinating reviews on the effectiveness of the Group’s system of internal controls, through
reports furnished by the Internal Audit Division, the External Auditor and the management.
45
audit committee report
The Management Audit Issues Action Committee which was established by the Audit Committee in year 2002 to
update the Audit Committee on the progress of:
•
Management actions to resolve significant control and accounting issues as highlighted by the Internal and
External auditors.
•
Any other recommendations made by the Audit Committee for management action.
4. INTERNAL AUDIT FUNCTION
The Group has a well established Internal Audit Division which reports to the Audit Committee on its activities based
on the annual Internal Audit Plans. A new Group Chief Auditor was appointed on 1 October 2002.
The Audit Committee approves the risk-based Internal Audit Plans. The scope of Internal Audit covers the audits of
all financial, operational and compliance matters including those of local and overseas subsidiaries. The main activities
include auditing of:
•
Revenue assurance;
•
Financial management and operations;
•
Marketing and sales activities;
•
Security, controls, operations and development information system;
•
Network availability, serviceability and quality;
•
Human resource operations;
•
Support service operations; and
•
Local subsidiaries and international ventures.
The Audit Committee receives regular reports from the Group Chief Auditor of the Internal Audit Division on audit
works and activities prior to the Committee meetings. The Internal Audit reports are submitted to the Audit Committee
based on quarterly audit plan as well as additional reports based on special requests by the management. In 2002,
a total of 90 audits, reviews and investigations were carried out spanning the Group operations.
Additionally, the Internal Audit Division works closely with the external auditors to resolve accounting and control
issues to ensure that significant issues are effectively addressed by the management.
46
TERMS OF REFERENCE
OF AUDIT COMMITTEE
1. COMPOSITION OF THE AUDIT COMMITTEE
The Committee and the Chairman shall be appointed by the Board of Directors and shall
consist of at least three (3) Non-Executive Directors, the majority of whom are independent.
The Audit Committee shall be appointed by the Directors from amongst their members and
the members of the Audit Committee shall elect a Chairman from among themselves who
shall be an Independent Director. All members of the Audit Committee, including the
Chairman, will hold office only so long as they serve as Directors of the Company. The Board
of Directors must review the terms of office and performance of the Audit Committee and
each of its members at least once every three years to determine whether the Audit
Committee has carried out their duties in accordance with its terms of reference.
2. MEETINGS
The Committee shall meet not less than four (4) times a year and reports to the Board of
Directors. The quorum of the Committee meetings, shall consist of at least two third of the
members, with Independent Non-Executive Directors forming the majority.
3. AUTHORITY
The Audit Committee has unrestricted access to information, records, properties and
personnel of the Group. It also has direct communication channels with the external and
internal auditors. The Committee is also authorised by the Board to obtain external
independent professional advice as necessary.
controls as highlighted by the external and internal
auditors per management letters;
4. DUTIES AND RESPONSIBILITIES
The following are the main collective duties and
responsibilities of the Committee:
i.
ii.
iii.
To approve the Internal Audit Charter, which defines
the independent purpose, authority, scope and
responsibility of the internal audit function in the
Company and Group;
Consider the appointment of a suitable accounting
firm to act as external auditor and amongst the
factors to be considered for the appointment are the
adequacy of the experience and resources of the firm
and the persons assigned to the audit, to consider any
question of resignation or dismissal and to
recommend the audit fee payable thereof;
Discuss with the external auditor before the audit
commences, the nature, approach and scope of the
audit and ensure co-ordination where more than one
audit firm is involved;
iv.
Review the quarterly interim financial results, half-year
and annual financial statements of the Board;
v.
Review with the external auditors the financial
statements for the purpose of approval before the
audited financial statements are presented to the
Board for adoption;
vi.
vii.
Discuss problems and reservations arising from the
interim and final audits and any matter the auditor
may wish to discuss in the absence of the
management where necessary;
Review the follow-up actions by management on the
weaknesses of internal accounting procedures and
viii. Review the assistance and co-operation given by the
Company and it's officers to the external and internal
auditors;
ix.
Review the Internal Audit Plans and results of the
internal audit process; to ensure appropriate actions
are taken on the recommendations made by the
Internal Audit function;
x.
Review and appraise the performance and
remuneration of the Group Chief Auditor and be
consulted on his appointment and removal;
xi.
Review the adequacy and the integrity of the Group's
internal control systems and management information
systems, including systems for compliance with
applicable laws, rules, directives and guidelines;
xii.
Propose best practices on disclosure in financial
results and annual reports of the Company in line with
the principles set out in the Malaysian Code of
Corporate Governance, Malaysia Accounting Standard
Board (MASB) and other applicable laws, rules,
directives and guidelines;
xiii. Propose, monitor and ensure an adequate system of
risk management for management to safeguard the
Group’s assets;
xiv.
Consider and review any significant transactions
which are not within the normal course of business
and any related party transactions (RPT) that may
arise within the Company and the Group; and
xv.
Consider other topics as defined by the Board.
47
statement on internal control
INTRODUCTION
The Malaysian Code on Corporate Governance stipulates that the Board of Directors of listed companies should maintain
a sound system of internal controls to safeguard shareholders’ investment and the Group’s assets. Set out below is the
Board’s Statement on Internal Control in compliance with the KLSE’s Listing Requirements and the Statement on Internal
Control: Guidance for Directors of Public Listed Companies.
RESPONSIBILITY
The Board places importance on the need to maintain a sound internal controls system and effective risk management
practices in the Group to ensure good corporate governance. The Board affirms its responsibility for reviewing the
adequacy and integrity of the Group’s system of internal control and management information systems, including systems
for compliance with applicable laws, rules, directives, guidelines, and risk management. The Board is informed of all major
control issues pertaining to internal controls, regulatory compliance and risk taking. The system of internal controls
includes financial controls, operational efficiency and effectiveness, compliance monitoring, systems and process
improvements, self-assessment and risk management. This system can only provide reasonable but not absolute assurance
against material misstatement or loss.
RISK MANAGEMENT
The Board has approved a Risk and Internal Control Policy and an Enterprise Risk Management Framework for the Group
in 2002. The Board has initiated an ongoing process to identify, evaluate and manage significant risks that affect the
achievement of the Group business objectives. During the year under review, the Board had engaged external consultant
to perform gap analysis by inventorying the significant risks, and the adequacy of the present systems of internal controls
in the Group’s significant operations. The principal risks identified are those relating to Business Strategy, Operations,
Finance, Systems and Compliance. The Board acknowledges that considerable effort and commitment is required to
implement Enterprise Risk Management within the Group and has allocated appropriate resources in the Risk Management
Unit. The Task Force for Best Practices (TFBP) continues to coordinate the implementation of ERM, and will report to the
Board Audit Committee an aggregated view of principal risks inherent in all operating units and companies within the Group
and their respective risk response plans to manage these risks.
CONTROL SELF ASSESSMENT (CSA)
The Board recognises that Control Self-Assessment process is a key aspect of the risk management system, hence
supported its implementation by the Group Internal Audit. CSA is a process where business units at operational levels are
required to identify risks that prevent the achievement of their business objectives. It also includes the assessment on the
effectiveness and adequacy of the current internal controls, hence culminating in the improvement of the overall business
processes. A seminar on Corporate Governance, Internal Control and Risk Management for the Group top management
was also held. Throughout 2002, a total of 16 CSAs involving more than 300 employees were carried out in various
operating units within the Group. These have resulted in better awareness of risks and controls and improved
understanding on the linkage between risks and business objectives.
48
OTHER KEY ELEMENTS OF INTERNAL CONTROLS
The other key elements of the Group’s internal control systems are as follows:
1.
Board has reviewed and approved Business Plans within which the business’s objectives, strategies and targets are
articulated. These business plans are communicated throughout the organisation to ensure effective implementation.
2.
Clearly defined delegation of responsibilities to committees of the Board, Management at Corporate Centre and
companies, including financial authority limits set in the Business Process Manual as well as the Subsidiary Policy
and Guidelines.
3.
Structured review of all proposals for material capital and investment acquisitions by the business segments within
the Group, namely TelCo Executive Committee and respective boards of major operating companies before approval
by TM Board.
4.
Self-assessment and provision by the Group’s five major operations, of the Internal Controls Assurance Letter on an
annual basis affirming the effectiveness, reliability and adequacy of systems of internal controls.
5.
Clearly documented policies and procedures in respect of Financial Controls, Procurement, Network Operations,
Information Technology, Marketing, Human Resources and Health and Safety.
6.
Detailed budgeting process, which is in place, is reviewed at the operating company levels and approved by the
Board.
7.
Performance reports on financial performance and business objectives are regularly provided to operating company’s
management and boards, to enable them to review the Group progress against its goals.
8.
Monitoring of regulatory and statutory compliance through the TFBP to support the Board on proper management of
effective corporate governance practices and requirements. The Board has also approved the setting up of a Technical
Compliance Division to report and update the TFBP and the Group on proper practices and compliance to these
requirements.
9.
Monitoring of external and internal audit control issues to ensure completion through the Management Audit Issues
Action Committee to ensure actions are taken by management to resolve the issues effectively.
The statement does not include the state of internal controls in material joint ventures and associated companies, which
have not been dealt with as part of the Group.
There was no material loss incurred as a result of internal control weaknesses.
49
Securing
Business Connections
In bits and bytes we deliver
Over networks built for tomorrow
Where security is paramount
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Never will your data be compromised
By securing business connections
chairman’s statement
“2002 was another extraordinary year. It saw three major
milestones in the company’s history. Having been associated with
Telekom Malaysia for fifteen years, I can say these were truly
historic events in the evolution of the company.”
TAN SRI DATO’ IR MUHAMMAD
RADZI BIN HAJI MANSOR
Chairman
52
The first was the move into our
new building Menara Telekom. The
second is the merger between our
cellular subsidiary, TM Cellular
Sdn. Bhd. and Celcom (Malaysia)
Berhad [Celcom], which was
formerly a subsidiary of Telekom
Malaysia. For me both represent a
sentimental “home-coming”. In
Menara Telekom we have come to our new home, and in Celcom’s case it is
a warm welcome back to the fold and we are now reunited. The third is the
Initial Public Offering (IPO) of another subsidiary, VADS Berhad on KLSE
Second Board and early this year, the listing of Telkom South Africa, our
associate company, on Johannesburg and New York Stock Exchanges. These
are symbols of rebirth and renewal ushering a new era for Telekom Malaysia.
They signify a renewed confidence in our future, appropriate to the theme of
this year’s Report – “Opening Up Possibilities” the whole new range of
opportunities before us.
53
chairman’s statement
Writing this piece from the 55th floor of our new intelligent and
Against this backdrop, Telekom Malaysia’s performance has been
elegant building, officially opened by our beloved Prime Minister,
satisfactory. Despite the adversities, which we had expected to
YAB Dato Seri Dr. Mahathir bin Mohamad on 10 February 2003,
materialize in negative growth, we are pleased to announce a
it gives me a view over the horizon, stretching into the future. Its
marginal growth of 1.7% in top-line revenues and 7% in our net
design represents the rebung or bamboo shoot, which symbolises
earnings, stripping out the exceptional item included in 2001. We
not only growth but flexibility and resilience. The bamboo bends
are particularly encouraged by the positive developments in our
to the winds of change yet able to withstand its force. Telekom
cellular and broadband initiatives, which we have targeted as
Malaysia recognizes now more than ever the need to be responsive
future engines of growth for Telekom.
to the turns of fortune dictated by the dynamic and uncertain world
we presently inhabit and the changing needs of our customers.
The merger of TM cellular and Celcom is on track and should be
completed by middle of next year. With it, we enter an entirely
The uncertainty prevailing in the world has weakened economies.
new dimension and acquire a new and enhanced corporate
The financial effects of the dotcom crash, the slowdown in the
identity. Together with our new building we are seeing the new-
telecommunications industry and accounting scandals have shaken
look Telekom. The merger provides a new capability to help
confidence to the core. Even against this backdrop, there are global
realize our vision to attain at least 30% revenue contribution from
concerted efforts towards recovery and growth.
the cellular business. We have become well placed to realize this,
even exceed it.
The telecommunications industry, as part of the larger ICT landscape
is strategic in sustaining long-term economic growth. It is widely
We are now positioned as the country’s leading totally integrated
accepted that the next economic revolution is in terms of knowledge
service provider with a boost in market share in the cellular
which can grow via increased communications, by way of facilitating
segment, from 17% to an estimated 40%. But while the merger
the speed, transfer and sharing of knowledge between people,
bestows a commanding scale and capability it means,
businesses and nations. Building a knowledge economy is critical
correspondingly, we are expected to demonstrate leadership and
for socio-economic development, not just for financial gain but by
fulfill an enhanced national responsibility. With the combined
education and increasing awareness; forging greater understanding
synergies it will bring, it will spearhead the continuing expansion
between us as a people and a race. Perhaps, this is where hope
of both coverage and services, nation wide, whilst rationalizing
for long-lasting peace and prosperity truly lies.
the network infrastructure.
The telecommunications industry itself has undergone phenomenal
Telekom Malaysia is also fortunate in being allocated the spectrum
change over the last decade, and technology is improving at a
to operate third generation (3G) services recently and I thank our
tremendous rate with great impact on usage patterns and the way
Government for this. I also congratulate those who put together
we communicate and conduct business. Of particular significance
our bid, for a successful outcome in a very demanding exercise.
has been the explosion of the Internet and cellular technologies.
The onus is now on us to justify the faith shown in our ability,
Innovations in product and service development have seen immense
which means taking a leap into the new technology involved. 3G
growth in data and content, which underscores the current demand
elsewhere has not exactly had a problem free debut. We intend
trends in mobile, broadband and multimedia. Voice remains a key
to follow a judicious path in implementing it but welcome the
product but is migrating from public switch to packet switch
chance to elevate our services – and our technical profile in the
(Internet Protocol – IP) and cellular networks. These trends
process. Whilst we welcome the new broadband capability,
necessitate the experimentation with new business models, which
however, we should not forget that this is just a facilitator and
industry players have yet to find a proven formula for.
that what matters is the content.
Despite this, there remains a real genuine need for basic
All these developments were not without cost. The new
telecommunications services and infrastructure development.
headquarters, our acquisition of Celcom, our installation of 3G
There is a delicate balancing act which Telekom Malaysia is
represent a huge investment. Part of the rationale is that in line
committed to; not only must we be responsible to our customers
with current national policy we are focusing on and developing
and shareholders but, we must be responsible to our nation.
the domestic market. And as with all investment it proclaims a
confidence in the future. We have already begun to open up
exciting new possibilities.
54
Menara Telekom, the nation’s
latest landmark.
We have built a global presence which today reaches more than 7 million cellular customers in 7 international ventures. But we feel now
is the time to rationalize our overseas investment, to concentrate on the domestic sector first, and refocusing on the Asia Pacific region
where the greatest growth in telecommunications will take place. We ourselves have identified the cellular market, data, Internet and
Multimedia as the keys to our future success.
We cannot allow our progress to be deterred by the shadows of world conflict. But we recognize that uppermost in people’s minds is a
heightened awareness of risk. Security has long been on our list of priorities. We already have an established unit to deal with Risk
Management. Risk today goes beyond the obvious commercial exposure to operational and technical, as well as financial concerns. In the
present context in which Telekom Malaysia finds itself in an invidious position, there are serious security problems. As we are providing
a strategic service, management is always aware of its responsibility to protect the safety of both equipment and personnel, but now with
increased vigilance. We have identified the principal risks in our operations and preemptive security measures are being taken. Risk
management is a test of preparedness, requiring us to be in a state of constant readiness. May I reassure shareholders that today's trials
are a wakeup call and serve to strengthen our resolve to fulfill our crucial role in the economy and in national life. We face the future with
a positive mind set.
Domestically we need to work smarter. We not only have to be alert to new possibilities but ready to exploit them. In this year’s Report you
will notice that profitability is not proportional to revenue, which may be attributed to higher operating costs. Cost cutting has already begun.
Employee welfare is an ongoing concern as witnessed through our Voluntary Separation Scheme (VSS) last year which met with a good
response whereby some 1,763 employees at all levels accepted the offer. We in a small way have begun internationalizing our work force,
our strength, relevant to the international dimension to our operations, and reflects the incipient response we see elsewhere in this country
to the reality of a globalising world. It has been a trying year. The management and staff have performed well under challenging business
conditions and deserve to be congratulated. In view of the continuing uncertainties we now call on them to redouble their efforts with the
emphasis on customer service and satisfaction – that vital link between us and our customers which builds loyalty and attachment.
Social responsibility still remains an integral part of our business philosophy. Telekom Malaysia is attuned to the new era of corporate
governance and greater transparency, which resonates with the values we hold dear and have always practised. We continue to support
major community and national projects notably the Langkawi International Dialogue and Telekom Malaysia Le Tour de Langkawi. It is our
hope that the Universal Service Provision (USP) Fund will provide stimulus for pushing further connectivity to those in our community who
are still waiting for progress in communications to reach their doorstep.
May I thank my fellow Board members for their active participation and contribution at all Board and Committee meetings and to the Chief
Executive, the management and staff for their sterling efforts over the past year and their steadfastness and resilience in facing the new
challenges. We thank the Government for their support in these troubled times. To our valued shareholders, we wish to put on record our
utmost gratitude for their undeviating loyalty and support particularly in our efforts to bring the Company and the Group to greater heights.
Please be assured that what will sustain us is our undiminished confidence in the long term future of Telekom Malaysia and our resolve
to keep faith with our vision. That vision is defined as to become a leading integrated and total communications company of choice. That
is the ultimate possibility that is realistically open to us in our present strengthened position. We remain secure in the knowledge - a very
Malaysian knowledge that Vision combined with strategic intent, ultimately triumphs over adversity.
TAN SRI DATO’ IR MUHAMMAD RADZI BIN HAJI MANSOR
Chairman
55
chief executive’s
statement
Chief Executive
56
OPENING REMARKS
2002 has been a year of uncertainty; amidst a world struggling to
overcome perhaps the greatest set of challenges we will have to
face in this new millennium. The aftermath of September 11 and
the ensuing global tensions are negatively affecting vulnerable
economies still recovering from the dotcom crash and the
telecommunications industry slowdown. Asia, fresh from the
wounds of the Asian Crisis is dealt a new deck of trials. In these
uncertain times, these words ring true:
“Conflict creates tension. Tension creates
resolution. Resolution creates change....”
(Albert Emerson Unaterra – writer)
Thus, resolution is key – so long as we resolve to overcome uncertainty, there is always opportunity for change and growth.
Telekom Malaysia holds firm to our resolve. We remain steadfast in our vision to become the communications company
of choice and maintain a long-term view in all our endeavours to date. We set out with the clear intention to grow our
cellular, data and internet multimedia businesses and we continue to make encouraging headway in these arenas.
We must be resolute because we are committed to the growth of this company, to ensure its strength commercially and
to deliver value to our customers and shareholders; but more than this, we are also committed to supporting the growth
of this nation. This balancing act is unique to us, and we accept its challenges in earnest.
The theme for this year’s Annual Report is “Opening Up Possibilities”. This couldn’t be more apt – this vast communications
infrastructure we are building is more than just about the network, it is about what is built upon it – businesses,
relationships, knowledge, the economy. By bringing people and information together, we hope to create a new world of
possibilities.
In pursuing this vision, I am heartened by the enthusiasm and dedication of the citizens of Telekom Malaysia in giving full
support to the achievement of our goal.
With that, I am pleased to announce the results of the Group’s performance in 2002.
57
chief executive’s statement
2002 GROUP PERFORMANCE
Environment
Global and Regional
The external environment has suffered many setbacks of late – fear of terrorism, the dotcom bubble burst, accounting
scandals, and telecommunications sector slowdown – have all hit the world economy adversely. Yet, growth albeit slowly
will prevail once more on a more prudent basis, i.e. the world economy is re-setting itself back into a more realistic era
of growth.
In helping to sustain long-term economic growth, ICT services especially telecommunications remain at the forefront in
driving global efforts towards a knowledge economy and increasing connectivity; never more evident than the explosive
growth of revenues in the Asia-Pacific region. It is here that opportunities lie and provide the foundation for the next burst
of medium-term growth.
The future of the global telecommunication industry has been influenced by the following trends, which could very well
alter the future of voice and data markets, affecting carriers like us. These trends provide valuable insights as to what
strategy telcos should pursue;
•
Voice will continue to be a key revenue generator for incumbents for the next few years as the playing field shifts from
‘traditional’ voice to VoIP and cellular
•
The migration towards cellular and wireless networks is creating new demand for mobile services
•
The explosion of Internet usage
•
The widespread availability of affordable and efficient broadband access and services
•
The acceleration of demand for data services from multinational corporations and organisations to become more
dynamic operating in a borderless world
•
The importance of value added services as a source of revenue generation
•
New and innovative business models emerging from fierce competition and dramatic changes in the industry value chain,
which places greater emphasis on content, aggregation and applications providers than network and services providers
Essentially however, telecommunications companies the world over will be concentrating on two things: primarily how to
generate growth and earnings recovery.
In the current environment whilst USA and Europe grapple with its financial problems, the greatest telecom growth will be
in Asia-Pacific, which is less encumbered by debt. With relatively strong macroeconomic fundamentals and policies,
coupled with strengthened financial and corporate sectors, the Asia Pacific region is expected to record high growth and
emerge as a dynamic region with vast trade and investment potential. China’s strong growth performance is expected to
be the catalyst for the growth in this region where intra-regional trade is becoming increasingly important.
By 2005, the Asia/Pacific region will contribute almost 30% of the world’s telecommunications services revenue. Demand
is high for the deployment of infrastructure to universalise service; new networks tending to leapfrog to the highest level
of technology – again especially in cellular with the migration to 2G+ and 3G networks. Wireless penetration will continue
to increase around the world. Wireless networks, less expensive to install than wireline; therefore, will greatly influence
infrastructure build-up in regions with low fixed line penetration, such as Malaysia. Handheld devices will soon become the
predominant means of access to the Internet.
58
Malaysia
although a new mechanism of Universal Service Provision (USP)
Regardless of the global environment, there is a clear need for
is also in place, we carry responsibility in helping to see this
the continuing development of telecommunication services and of
initiative through. With use of wireless technologies, such as Code
the sector here in Malaysia. Telekom Malaysia recognises this fact
Division Multiple Access (CDMA) and Wireless in Local Loop
and hence is focussing its efforts at home and in the region.
(WiLL), we have successfully introduced basic services in certain
rural areas and even cleared waiters in congested urban centres.
Accommodative monetary conditions and our government’s
stimulative fiscal policy will continue to drive stronger economic
There is still much work to be done and in 2002, Telekom
growth in Malaysia. The economy grew 4.2% in 2002 and is
Malaysia put its mind to the task.
expected to maintain its growth momentum in 2003, led by
further improvements in both domestic and external demand,
although these will be subject to some downside risk from global
Performance Review
events. Structurally, the Malaysian economy is strong in the
For the current financial year to date under review, the Group’s
services and manufacturing sector and is fairly dependent on
revenue increased by 1.7% from RM9,673.2 million recorded in
private consumption, which has been steady over the last few
the corresponding period in 2001 to RM9,834.1 million mainly
years. We gauge the need for telecommunication services by
due to higher revenue from telephony, data, internet and
these key indicators.
multimedia as well as other telecommunication services. However,
the Group’s profit before taxation has decreased by 35.7% from
Usage patterns are in line with our predictions; fixed line
RM2,443.6 million recorded in the preceding year corresponding
revenues continue to fall in face of mobile substitution in voice,
period to RM1,570.1 million attributed to the inclusion of an
as well as competitive pricing in international rates and the effect
exceptional gain of RM827.8 million from disposal of an
of VOIP. Mobile revenues still show encouraging growth although
associated company in 2001. Stripping out this exceptional item,
increases in subscriber base are tapering off indicating the need
net earnings actually rose by 7.3% to RM1,056.3 million as
to raise ARPUs via value-added services. The government is keen
compared to RM984.1 million in the previous year. Our overseas
to see 3G networks and services introduced and the industry
investments, are now profitable with total combined profit before
consolidation is partly in preparation for this. The data segment
tax of RM176.9 million in 2002 as compared to RM131.7 million
also registers growth although it is a migration phase, as
in the previous year.
companies evaluate their business needs and budgets for low or
higher capacity leased lines and networks. Internet usage is
moving beyond dial-up to broadband access. Malaysians grow
more sophisticated in their requirements and the future engines
of growth are wireless and broadband. Thus, new and attractive
content is increasingly needed. The industry has been very good
at providing carriage and connectivity, but for content, even
globally, telcos have yet to successfully generate content business
models. This is key going forward.
Against this backdrop, Telekom Malaysia has a national agenda to
support. In order to help drive the nation towards long-term
sustainable growth and progress, we need to address two main
issues; increasing Malaysian competitiveness and productivity and
increasing rural telecommunications’ penetration rates. In terms of
competitiveness, working together with the Malaysian
Communication and Multimedia Commission (MCMC), we have a
new tariff structure now in place for our fixed line services. We
are also mindful of providing value-added data solutions to our
Driving the knowledge economy.
customers so as to encourage businesses. In terms of access,
59
In terms of revenue, cellular contribution grew by 6.3%, data
RM5,841.7 million while our net gearing was at 38.3%. All in all,
services by 0.4%, and internet and multimedia by 32.9%. Leased
we present a healthy balance sheet, which is commendable in
services declined by 5.1% due to migrations to higher end services
these trying times.
such as Corporate Information Superhighway (COINS), which grew
encouragingly by 52.5%. Telephony revenue decreased only
As a result of the above, basic EPS grew by 5.7% to 33.5 sen
marginally by 1.1% as expected due to lower tariffs and cellular
from 31.7 sen in 2001 excluding the exceptional gain in 2001.
substitution. Still, revenue from fixed line services accounted for
The Board recommends a final dividend of 10.0 sen per share
65.4% of total revenue, although down from 67.2% in 2001.
less tax at 28% (2001: 10.0 sen per share less tax at 28% and
a special dividend of 5.0 sen per share less tax at 28%) for the
In terms of customer base, we grew our mobile business
shareholders’ approval at the forthcoming Annual General Meeting
organically by 20% and with the proposed Celcom/TMTOUCH
of the Company on 20 May 2003.
merger, this would bring our total market share to about 40%.
It is also a significant year as this is the first year TM Cellular
has shown positive profits with total profit contribution of RM10.4
Key Initiatives
million (excluding waiver of shareholder loan) as compared to
We have identified the future engines of growth for the company
RM118.0 million loss in the previous year. Mobikom’s loss was
as wireless, broadband, data and multimedia. Here we are pleased
reduced to about RM46.5 million as compared to RM256.0 million
to share some of the developments in these areas in 2002.
last year. Celcom, which is now an associated company of Telekom
Malaysia contributed a loss of RM15.6 million to the Group’s
Our cellular business has always been a priority but it was in
results for the year.
2002, with the Celcom/TMTOUCH merger that we feel that we
truly stand in good stead. Together, Celcom and TMTOUCH form
Internet subscribers grew by 11.8% to 1.4 million dial-up customers
a formidable GSM force towards the provisioning of 3G services.
and we successfully launched our broadband access service,
Forging ahead, we will seek to improve further profitability and
Streamyx in 2002, which currently has 45,000 customers and is
realise true synergy with our new sister company.
fast growing. We are also proud to introduce 43 Streamyx hotspot
sites which allow broadband internet access while on the move,
In making sure that 3G is a sound business, Telekom Malaysia
with the aim of increasing this to 200 sites in 2003.
has planned for a trial that is to commence in Q2, 2003, which
in turn would become the yardstick in determining the way to
Although we are facing a slight negative growth of 2.2% in fixed
move forward. However, in migrating from 2G to 3G networks,
line customers due to a decrease in residential lines, business lines
we maintain that it is not so much the platform that matters but
have increased by 2.2% and we also see growth to 42,000 fixed
rather the services that are delivered on them. Thus in the
CDMA service lines. This is a key growth initiative within Telekom
medium term, Telekom Malaysia should endeavour to deliver
Malaysia, that of offering fixed services via wireless access; it is a
innovative and value-add services on current platforms in order
strategic and cost effective move in providing access to rural areas
to increase returns on existing investments, especially in view of
and indeed waiters across the nation. At full scale, cost per line is
our ongoing merger. Nonetheless, we are committed to bring
expected to range from RM2,000 to RM2,500 compared to
Malaysians closer to embrace this new emerging technology.
RM7,000 to RM10,000 for normal copper rural line. CDMA
technology is also a means by which to provide internet services
TM Net Sdn. Bhd. (TM Net) was incorporated in 2002, a mark of
where needed and where fixed line dial-up may not be available.
strategic independence and business focus, adopting a new
corporate logo to reflect a new culture and spirit. In 2002, it
In terms of operating costs – a testament to continued efforts,
spearheaded the market’s evolution towards broadband
we managed to achieve a significant reduction in bad debt
connectivity. It maintained leadership in the ISP market with a
allowance, which stood at RM564.4 million (5.7% of total revenue)
total subscriber base of 1.9 million. For the financial year under
as compared to RM869.5 million (8.9% of total revenue) in the
review, TM Net attained a profit before tax of RM5.3 million on
previous year. The lower allowance were mainly due to writebacks
the back of RM161.8 million in revenue, which is an achievement
during 2002 as well as lower allowance in TM Cellular. Depreciation
as the company was expected to be profitable only from the year
expense rose by only 4.4% while net finance cost fell by some
2003 onwards.
23.8%. Telekom’s net debts as at 31 December 2002 stood at
60
TM Telco is building a network for tomorrow. Hence, network migration to an IP based New Generation Network (NGN),
and the provision of comprehensive broadband access is an ongoing project and currently being actively pursued to
provide higher capacity, bandwidth and capability to meet the customers’ requirement. The move towards a wholesale
business model will allow TM TelCo to focus on revenue growth, cost containment and asset utilisation.
TM International Sdn. Bhd. (TMI) was set up as a wholly-owned subsidiary of Telekom Malaysia to oversee and manage
its foreign ventures. As at end 2002, TMI’s foreign cellular subscriber base stood at over 7 million people from seven
countries around the world – South Africa, Guinea, Malawi, Bangladesh, Sri Lanka, Cambodia and Thailand. International
investments will continue to form an important operational aspect for Telekom Malaysia, with the aim of increasing
shareholder value.
TM Facilities Sdn. Bhd. (TM Facilities) principal responsibility is to provide cost-efficient and quality services to the Group.
With the view of embracing a market-driven pricing structure, in the year under review, TM Facilities implemented the new
Activity Based Costing (ABC) costing structure, which was rolled out to the customers of Malaysian Logistics and Property
Operations.
At Group level, amongst other critical strategic areas, we are focussing
on our one-stop CRM programme and preparing for wholesale and 3G
services. The transformation programme to create a new performance
culture, and put in place the systems and processes necessary for
success, is well underway.
Staff and skills development continues to be a priority; we need to
create a more agile multi-skilled workforce able to deliver against the
challenges of today’s and future businesses. This is another delicate
balancing act, as we are also aware of the need to create better value
from our Human Capital, by reducing the cost of employment and by
increasing productivity. The changing operational environment has also
meant the need for the right mix of talent and competencies.
ICT facilitating a
multiskilled workforce.
61
The Voluntary Separation Scheme (VSS), offered in 2002 was
We take education very seriously; we have also built the nation's
positively received and it affected 1,763 employees. At year-end,
first private university, the Multimedia University (MMU) with its
the total Group strength is 29,800 – the reduction in headcount
23 Centres of Excellence in various disciplines to cater for the
will reduce cost of employment and improve productivity
need for ICT expertise in Malaysia. MMU also collaborates with
measures; whilst we strive to attract new recruits with the
transnational organisations of global expertise such as Microsoft,
relevant skills to suit TM’s future needs. We have also reviewed
Intel, and Nokia to extend the breadth of knowledge. Similarly
critical Human Resource processes such as compensation, talent
Telekom Malaysia’s incorporation of its Research and Development
and career management in order serve our employees better. In
arm shows our commitment to both commercial, industry and
terms of training support, our Telekom Training College is now
national progress in R&D; with emphasis on delivering innovative
offering a wider range of specialised ICT courses to help prepare
and quality products that can be commercialised and rolled out
our people to face the challenges ahead. The courses are also
as services to the public.
offered to interested external students.
Telekom Malaysia is also proud of our Scholarship Foundation
These initiatives will map out a new identity for Telekom Malaysia,
which has funded RM45.5 million in scholarships and loans to
moving away from the incumbent image to a full-integrated
bright young Malaysians who continue to bring new talent back to
communications provider.
the Company and the country. Out of 2,789 students, we have
recruited 841 sponsored students. We offer our promising people
and high calibre researchers the opportunity to pursue
GROWING THE NATION:
TELEKOM MALAYSIA’S CONTRIBUTION
postgraduate studies while completing research projects for both
personal development and for the benefit of the organisation.
The telecommunications industry has always been a strategic
sector for economic growth and progress, both in terms of
Our sense of corporate citizenship extends beyond education and
infrastructure and in the provision of services. Beyond this, which
socio-infra development work. In the field of tourism, our Menara
form our core business activities, Telekom Malaysia has and is
Kuala Lumpur, the world’s fourth tallest telecommunications tower
always active in promoting good corporate citizenship as evidenced
as well as the Menara Alor Setar have become premier tourist
by our strong support through our various contributions and
attractions and draw in tourists from all over the world. Continuing
organisation of numerous national, educational, social, community
with our practise of supporting events of national importance, we
and environmental projects. We believe these initiatives help
sponsor the Le Tour de Langkawi, Langkawi International Dialogue,
empower the nation towards becoming a knowledge-based society.
and most recently the NAM Summit. These efforts help position
Malaysia on the global map of international events.
Our special contribution is in helping to achieve the government’s
aim of bridging digital divide via our endeavours in Universal
Service and particularly our Smart School programme. In 2002,
PROSPECTS
we have increased penetration rates and cleared waiters utilising
The physical move into Menara Telekom late 2002 and its
wireless technologies in rural and congested urban areas. We
officiating ceremony by our Honourable Prime Minister, YAB Dato
continued to be involved in community development projects by
Seri Dr Mahathir Mohamed recently is a symbolic gesture of
using various alternative technologies and in so doing,
rebirth for Telekom Malaysia. Riding on this new-found
strengthened the collaborative working model that exists between
momentum, the Group will step up efforts to tap the potential
the government and private corporations in delivering basic
market in the high growth segments of cellular, multimedia,
services where they are most needed.
internet and data businesses.
We have taken that model and replicated it again in our Smart
School programme, which is a collaboration with seven local
firms and three multinationals with the intent of incorporating
advanced technology-based teaching and processes into the
existing national education system. The Malaysian Smart School
Pilot Project now encompasses 87 schools and we hope to
extend its reach throughout and beyond Malaysia.
62
Entering into this new age of interconnectivity enabled by broadband and wireless, the Group will focus on pushing top
line revenue through provision of high end data services, expand broadband and cellular access coverage and add new
applications, contents and services. In the fixed voice business, we will continue to defend our dominant market share.
Meanwhile, we will intensify efforts to achieve operational and cost efficiency.
The ongoing Celcom and TMTOUCH merger is a positive move for Telekom Malaysia. It is expected to strengthen the
group's mobile platform and leapfrog the merged entity to become the largest mobile operator in the country. For 2003,
our cellular operation will benefit from the combined market share, operational synergies and cost savings, for example
through network sharing, which in turn reduces capital expenditure. The customers will be the ultimate beneficiaries of the
improvement in services of the new entity.
Telekom Malaysia will continuously strive to increase its profitability and market share for both local and global businesses.
For that purpose, Telekom Malaysia has been realigned accordingly to establish a new strategic focus that will provide the
strength to compete in the existing and new businesses such as broadband services and 3G. TM Net, TM Facilities and
TMI have been set up to give more focus in delivering their respective businesses.
With these strategic initiatives being actively addressed, we are confident that we will be able to maintain a strong position
in the ever-growing competitive environment.
CLOSING REMARKS
In these uncertain times, we need to create new possibilities for ourselves. There is no waiting for the right set of world,
economic, or market conditions. Even in this environment, there are opportunities and still much that can be achieved. An
organisation that can steer itself through uncertain times will be the stronger for it in better times. Thus we must resolve
to change, to overcome the challenges put before us and to remove the barriers between us. We must change mindsets,
shift paradigms and continuously innovate. With change and strong collective will, we will progress.
Let me end by thanking the Board of Directors, management and our people who have brought Telekom Malaysia to what
it is today, for their contribution and hard work but mostly for their unwavering faith and dedication.
“The best way to predict the future is
to invent it.” (Alan Kay, inventor)
Chief Executive
63
Providing
For Everyone
Providing the vital links
Via wireless communications
From the tallest corporate offices
To the remotest longhouses
Bringing access to the inaccessible
Making the world a smaller place
Providing for the people
Wherever they may be
By providing for everyone
MANAGEMENT
TM TelCo
DR. IDRIS IBRAHIM
Chief Operating Officer
operations review
Fixed Line
Services
66
- TM TelCo
TM TelCo is the core business unit of Telekom Malaysia and
currently its main revenue contributor. The Company manages and
operates fixed line telephony and data-based products and services.
Malaysia’s penetration rate of 19 telephone lines per 100 population
is still relatively low and presents significant opportunities for growth.
Malaysia is gaining momentum towards achieving the aspirations of the Government for a knowledge-based economy and
an IT-literate society. The year 2002 saw TM TelCo making inroads in improving its service delivery and playing its part in
meeting the nation’s objectives. However, the company continued to face increased competition, mainly from mobile and
VoIP services. Nevertheless, there are still areas of potential growth in the data business as well as in value-added services
and quality of services related to ICT applications.
Throughout the year, numerous products, awareness programs as well as operational task forces were created and
launched as proof of TM TelCo’s commitment to delivering and meeting the needs and requirements of its customers. The
introduction of new products as well as the signing of major contracts with regard to future development were some
initiatives taken to lay the foundations for continuing growth.
Being a market-oriented company, TM Telco had initiated tariff reviews in respect of both national and international calls
in the year under review. Although the volume of calls has increased, the total revenue for voice services has dropped by
1.4% from the previous year. The data sector, however, has
shown an improvement of 11.1%.
Total costs increased by 16.9% to RM2,948 million, mainly
attributable to initiatives towards improving operational efficiency
particularly in network quality, marketing tools and staff skills.
The customer base has reached a total of 4,593,300 of which
72.5% are residential lines while business lines accounted for
the remaining 27.5%. Business customers had recorded an
increase of 12,492. However, net customer base was reduced
slightly due to attrition in residential customers.
The total number of waiters was improved by 29.4% from
90,650 in 2001 to 63,981 in 2002 due to implementation of
FW CDMA (Fixed Wireless Code Division Multiple Access) in
unserved areas.
IT literacy is on the rise.
operations review
In 2002, TM TelCo spent RM1,281 million on assets to develop
The increase in sales of Prepaid Ring Ring Card and i-Talk, which
and enhance its network. The bulk of the expenditure went to
offered very competitive call rates to selected countries via VoIP,
Customer Access Network, Transmission and Switching. To improve
helped offset the loss of revenues in National and IDD calls. This
the efficiency of back-end support, TM TelCo spent RM278.8
move indicates that TM TelCo is developing a strong foothold and
million on non-network related assets, mainly in developing and
alternative business to expand its fixed line services.
enhancing end support systems for the benefit of the customers.
FW CDMA, a new wireless technology introduced in 2002, has
TM TelCo is continuously improving its network infrastructure.
recorded a customer base of 42,192. This technology will be
Hence, network migration to a New Generation Network (NGN) and
used to attract and reach new customers in the near future.
Broadband continued unabated during the year, to provide higher
In addition, Telesiswa (collect calls), which was renamed Callpoint
capacity bandwidth capable to meet the demands of its customers.
during the year is poised to generate greater usage among the
customers.
The Company strongly believes that telecommunications and ICT
will be the driving platforms for the continued growth and
development of the nation’s economy. As a responsible corporate
Broadband Leased Lines (BLL)
citizen, TM TelCo actively supports regulatory requirements,
BLL is a very high bandwidth digital circuit connectivity with
Universal Service Obligation (USO) and Universal Service Provision
speeds of 4 Mbps to 155 Mbps and is fully managed end-to-end,
(USP) and participates in the Government’s Economic Planning
riding on the state-of-the-art Digital Data Network (DDN) platform.
Unit (EPU) programmes. The year 2002 was a satisfying year
So far there are 11 subscribers from among multinational
with regard to USP and the various government’s initiatives as
companies (MNCs).
TM TelCo helped contribute in achieving the Government’s aim of
bridging the digital divide.
Integrated Services Digital Network (ISDN)
TM TelCo actively participated at both the management and
The promotional campaigns on ISDN, especially TM ISDN Promo
working group levels for international projects such as IMT-GT
2002, have contributed to both customer and revenue growth.
(Indonesia, Malaysia and Thailand – Growth Triangle), BIMP-EAGA
The ISDN revenue for the year 2002 was RM170 million as
(Brunei, Indonesia, Malaysia and Philippine – East Asia Growth
compared to RM153 million in the previous year.
Area). The success of these groups will see improvements in
the socio-economic standing of member countries as well as
provide for better relations between Malaysia and its counterparts
Digital Leased Lines (DQ)
in the region.
DQ is an advanced, managed and secure network that offers
high-speed connectivity between Headquarters and remote
offices with data transmission speeds of 64 kbps, n x 64 kbps
up to 2 Mbps. This service has been offered to existing analogue
leased line subscribers to improve their service quality. There are
also special pricing packages for retail and wholesale customers
and promotion packages named “Connect 4 Promotion” to
Telephony
promote and make the digital leased circuit services more
The focus of the year 2002 was on retaining the existing customers,
attractive and affordable.
getting new customers as well as increasing customers’ traffic
usage. As such, efforts were directed towards attractive product
positioning and packaging.
68
COINS (Corporate Information Superhighway)
International Private Leased Circuit (IPLC) is designed to fulfill the
COINS, available nationwide, is a globally connected data
demands of a privately-owned secure global network between
communications network that supports multimedia applications,
dispersed locations at exceptional high speeds. It is a dedicated
networked computing and communications. It is a fast and open
point-to-point leased service between various business premises
multimedia network, employing the latest technology using
around the world, and provides the best platform for global
DWDM (Dense Wavelength Division Multiplexing) with a huge
private networks.
capacity of 40 Gigabits per second. It consists of different access
channels including ATM, Frame Relay and IP. A special package
VoIP Clearinghouse for voice and data was established as a major
for the domestic COINS VPN (Virtual Private Network) service
step towards achieving the goal of becoming a global hub of
was introduced on 1 September 2002 targeted at major and small
information communications. TM Clearing House (TMCH) was
business customers. Revenue from COINS for the year 2002 is
designed to serve as a single point of contact to originate and
RM160.1 million compared to RM105.0 million in the previous year.
terminate calls worldwide. It provides among others, billing and
settlement for its members, financial accounts management,
settlement of accounts and credit risk assessment between carriers,
Myloca
bandwidth and IP access provision and other value-added services,
Myloca is Telekom Malaysia’s total data hosting and recovery
including global roaming and messaging. It also acts as a single
solution, ensuring round-the-clock data availability and integrity.
point of contact for termination of telephony minutes regionally
The centre provides services such as IDC (Internet Data Centre),
and globally.
Telehousing and BC (Business Continuity) as outsourcing alternatives
TMCH offers customised packages for Start-up, Established and
that can help reduce customers’ IT costs.
Corporate members with a 3-tier volume scheme. It exploits existing
bilateral relationships (currently to 59 countries and 78 1st tier
Global Services
carriers) and wholesalers. The arrangement enables TMCH to enjoy
Global Frame Relay is the ideal solution for international Wide
large-scale exchange of telephony minutes via both PSTN and VoIP.
Area Network connection. With a fully-managed global network
and extensive reach, it acts as a digital nerve centre for businesses
CUSTOMER SERVICE
around the world.
TM TelCo strives to improve customer satisfaction by cultivating
Global Asynchronous Transfer Mode (ATM) offers an organisation
a customer-focused culture within the Company. It also subscribes
the flexibility and simplicity of managing high-speed networks
to excellent customer service by producing innovative, customer-
across the globe with speeds of up to 155 Mbps and highly
oriented products. Departments/units such as Customer Assistance
secured global network. It is able to meet the rigorous demands
Service (CAS) were strengthened to tackle customer-related issues.
of bandwith and multimedia applications.
Currently all Call Centre Businesses and the Operator Assisted
Services are ISO 9002 certified. Most services achieved the
predetermined target as depicted in the table below.
Response time within 10 seconds
Services
108
101
104
999
Telesiswa
1050
103
Achievement 2002
97.5%
97.7%
96.8%
98.1%
73.9%
95.8%
89.8%
Achievement 2001
95.8%
95.3%
96.0%
98.0%
83.0%
89.1%
88.2%
69
operations review
TM TelCo endeavours to provide excellent service delivery with
iOFFICE was re-launched in January 2002. It is an integrated
respect to the targets set in four key performance indicators
communication service via a dedicated portal (www.ioffice.com.my)
namely Installation Time, Service Restoration, Service Reliability
that comprises PC Telephony Services, Unified Messaging
and Operator Assisted Services (100).
Services (email, voice mail, fax mail, SMS), Directory Services
and Internet Access.
To ensure the required level of service excellence, TM TelCo sets
the targets and measurements in accordance with the
requirements set by the MCMC (Malaysian Communications and
SUPPORT
Multimedia Commission). The year 2002 was a successful year
Network
with respect to improved quality of service delivery. The year-to-
TM TelCo’s objectives in delivering excellent customer service and
date achievement of fault rate for year 2002 was 0.246, as
state-of-the-art products are well supported by an extensive
compared to 0.014 recorded in the year 2001, which is well
network infrastructure in line with Telekom Malaysia’s vision to be
below the 0.5 target as set by the MCMC. With a fault rate of
the communications company of choice.
0.246, it means that on average, each customer will experience
one fault within a period of four years against the target of one
We have been actively pursuing the centralisation of operations
fault within two years.
and maintenance activities in order to achieve maximum efficiency
and cost effectiveness. A Network Operations Centre (NOC) was
set up to ensure smooth implementation of switching and
PRODUCT LAUNCHES
transmission networks. It resulted in the average switching system
Managed BLL was launched in June 2002. It offers managed
availability of 99.9992%, transmission area microwave system
high-speed connectivity of up to 155 Mbps.
availability of 99.9980%, and fibre optic system availability of
99.9955%.
DSL was soft launched in September 2002 when TM Net Sdn.
Bhd. launched tmnet streamyx services. It enables data
Telekom Malaysia’s mostly fiber optic-based national and
communication at rates up to 100 times faster than current
international network currently has the capability to provide high-
traditional modems and up to 50 times faster than ISDN over the
capacity and high-quality global connections for Internet and
same line as telephone service.
other broadband services. Complementing the above, Telekom
Malaysia has also introduced Very Small Aperture Terminal
(VSAT) services for both domestic and international private
managed site-to-site and remote wide area network solution
network applications, international gateway projects and also for
based on IP Networking Technology.
bridging the digital divide in the rural and remote areas.
70
TM IP VPN was soft launched in November 2002. It is a secure
Convenience
from any location.
The Company has also expanded international connectivity
through the commissioning of three submarine cable projects.
The Asia Pacific Cable Network 2 (APCN2) connects Malaysia
with seven other countries in the Asia-Pacific Region, and
provides the first-ever self-healing high-bandwidth optical-fiber
submarine cable system. The SAT-3/WASC/SAFE cable system
enables Telekom Malaysia to connect directly with new
destinations in Africa such as South Africa, Ghana, Mauritius and
Senegal at a cheaper cost per circuit. It also provides Telekom
Malaysia with a diverse route to Europe. As the sole landing
country in the Far East, Malaysia is well positioned to be a hub
for African countries to reach the Asia Pacific and Oceania region.
Telekom Malaysia and 13 other international telecommunication
carriers signed a MOU in Bali, Indonesia on 4 September 2002
for the SEA-ME-WE 4 cable system to be built on Dense
Wavelength Division Multiplexing (DWDM) connectivity across
South East Asia, Middle East and Europe. The Ready-For-Service
(RFS) is expected in 2004.
QUALITY INITIATIVES
Billing
To align with Telekom Malaysia’s strategic focus on profitability,
Numerous steps were taken in the continuing effort to automate
customer-centricity, operational excellence and employee excellence,
our operations to the highest level. DRMS (Disaster Recovery
TM TelCo has implemented several transformation programmes
Management System), a software tool that facilitates effective
and action plans to blend its core values of uncompromising
management and monitoring of business continuance/disaster
integrity, total commitment to customers and respect and care
recovery activities, was developed to complement our Problem
with Telekom Malaysia’s Corporate Culture (owning the customers,
Management System and Network Monitoring System.
teamwork, performance driven and innovativeness). During the
year, Telekom Training College had completed awareness-training
Through sound management, improved processes and quality
programmes on “Internalising Core Values” (ICV) for all TM TelCo
initiatives, bill production improved during the year, and has shown
divisions and staff. The year 2003 will witness the implementation
to be consistently completed within two days with minimal errors
programme for ICV.
recorded throughout the year. Complaints and issues continued to
be handled through a complaint management system called
The quality initiatives and programmes implemented in achieving
SMART (Sistem Maklumat Aduan dan Resolusi Telekom). Todate,
the above strategic focus are TMBEA (Telekom Malaysia Business
there are about 2,500 Customer Service personnel using the
Excellence Assessment) and the ISO 9000:2000 standard.
system to handle complaints nationwide.
Through TMLinX, TM TelCo was able to collate payment data
MARKET SEGMENT
from various agencies that operate bulk payment collection and
Major Business & Government
autopay services such as banks, financial institutions, credit card
During the year, apart from maintaining the revenue stream of
companies and state authorities, transmitted on-line from the
telephony services, the primary focus of the Major Business and
agencies to the billing centre.
Government segment was to acquire a bigger market share in
data services and explore new business opportunities especially
Another application system completed this year that helped to
in providing total business solutions to corporate, major business
improve the revenue sharing settlement globally is INTACTS
and government clients and customers.
(International Traffic Analysis and Accounting System).
71
operations review
Focus was also given towards making Malaysia a communications
Revenue Assurance (RA)
hub in the Asia Pacific region by expanding Telekom Malaysia’s
The RA project comprises five initiatives relating to credit
business regionally and globally.
management, international settlement, data services, payphone
and telephone official services. The project which began in April
2002, aims to rectify revenue leakages and gaps within various
Consumer & Business
operating systems, processes and procedures.
The Consumer & Business segment embarked on several customer
management programmes including ISO Quality Standard
Project implementation is divided into two phases:
Compliance Programmes at call centres. Four promotional packages
•
Phase 1 is mainly to identify the top 20% revenue leak.
were made available during the year, namely Pakej Ria Residen
•
Phase 2 will operationalise the new processes and procedures,
which targeted new housing estates, Pakej Mesra Rakyat for low
following the installation of an enhanced operating system
utilisation areas, Pakej Business Plus for the business community
targeted at the rest of the leaks.
and Pakej B – Sub Busy to ensure that no Internet users miss
any incoming calls. A second line was also offered with free
rental. The continued support given to the Haj Pilgrims through
Hubbing
Tabung Haji has helped strengthen the excellent rapport with
As the future and potential growth in telecommunications in the
Tabung Haji and its very large customer base. The Malaysia Direct
global market unfolds, TM TelCo is gearing and realigning itself
service has enabled the pilgrims to call home and the call
towards realising more revenue from global data businesses.
charges borne by the numbers dialled in Malaysia.
Aspiring to be the Asia Pacific communications hub through the
provision of global networking, Telekom Malaysia’s long-term
target is to lead the managed IP, data and voice markets in Asia
SPECIAL PROJECTS
Pacific and maintain a high ICT market share in Malaysia.
USP
Hubbing will attract significant traffic from all over the world, with
Telecommunication projects in the rural areas continued to be the
the emphasis in the Asia Pacific region, thereby creating a
main agenda for the Government in bridging the digital divide. TM
powerful presence on a worldwide scale.
TelCo continued to participate actively in the projects initiated by
the Ministry of Energy, Communications and Multimedia (MECM)
and Malaysian Communications and Multimedia Commission
International Business Master Plan (IBMP)
(MCMC). In this regard, details of Telekom Malaysia’s participation
TM TelCo foresees that the global telecommunications and
are as follows:
information industries will pose intense competition in the years
i.
Telekom Malaysia was awarded an MECM project to provide
basic telecommunications and Internet services to 220
schools in various areas in Sabah and Sarawak. Valued at
RM49 million, the project was successfully completed at the
end of December 2002.
ii.
the maximum market share for the Asia Pacific region. To achieve
the objectives set and position Telekom Malaysia as an industry
leader in the Pacific-Rim region, the IBMP was developed to
address critical as well as strategic planning issues. The creation
and continuous enhancement of the IBMP is a crucial step in
Telekom Malaysia submitted a proposal for a MCMC project
realising the aspirations of Telekom Malaysia. In this respect, the
to provide telecommunications services in USP-designated
IBMP serves as the platform that spearheads Telekom Malaysia’s
areas in Julau, Sarawak and Kinabatangan, Sabah. The pilot
venture as a player in the Asia Pacific region and ultimately as a
projects cover 10 sites in both areas, 2 have been completed
player in the global market.
in December 2002 and the rest will be completed in 2003.
As its operational efficiencies increase, TM TelCo will be more
aggressive in bidding for USP projects in the future.
72
to come. The Company’s objective is to raise its profile and obtain
TM TelCo will implement CRM initiatives beginning with system
enhancements in stages in 2003. The goal of CRM solutions is to seamlessly
integrate IT and business objectives into every area of the Company’s
operation that relates to the customer. In order to unlock the value of CRM
and to fully realise its potential, the Company has adopted an implementation
framework based on the interaction of cross-functional business processes
derived from strategy development, value creation, multi-channel integration,
information management and performance assessment.
Looking at the current and future competitive landscape, there is great potential in the wholesale market. Being an early player in the
wholesale environment, TM TelCo has the unique opportunity to develop its wholesale skills and experience. The expansion of its wholesale
business will allow TM TelCo to focus on revenue growth, cost containment and asset utilisation.
Wholesale will be introduced to licensed operators, traffic resellers, ISP and ASP operators, through differentiated wholesale packages of
fixed facilities, products and services.
TM TelCo has also embarked on a new strategic approach to achieve customer excellence through the establishment of a newly dedicated
Customer Service Unit. Customers are becoming more demanding in their requirements as their communication needs evolve. Thus, the
Customer Service Unit acts, as a focal point to oversee these special and specific needs, to respond quickly to complaints and to exceed
the expectations of customers.
The Company will continue to build on its initiatives in improving operational excellence as it enters another year of growth. Operational
excellence will continue to be aligned with objectives towards increased profitability, customer-centricity, and employee excellence. The new
company’s vision will provide the glue in the culture transformation programmes and the impetus in the implementation of action plans
rolled out in 2002.
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operations review
Box
Article
BUSINESS
NETWORKING
TM-IPVPN: THE NEW FRONTIER IN NETWORKING SOLUTIONS
As businesses expand and establish branches in geographically
In 1997, work was under way to bring the advantages of Frame
disparate locations, it is becoming increasingly important for
Relay technology to the IP network. At the time, IP was becoming
these businesses to have a communications infrastructure in
increasingly popular as a protocol for applications. It was also
place to facilitate the transmission of important information. As
believed that shared networking in an IP environment would be
an example, it is necessary for sales personnel to have access to
cheaper and more cost effective if done on the Internet. Thus IP
certain client and corporate data while they are on the road.
VPN as a virtual networking solution was conceived.
In the early days, an extended enterprise required direct leased
IP VPN can be broadly defined as virtual connections between
lines to build its own private network, which would connect two
dedicated sites provided through the shared network of a public
or more sites for secure data transmission. Although this increased
Internet or a private IP network. When it is provided through the
the cost of doing business, it was considered a necessary
public Internet it can be done through Internet Protocol Security
expenditure which, in any case, provided a high return on
(IP Sec) technology, which encrypts the data and tunnels it through
investment by improving productivity.
the Net. This would appear to be cost-effective, but there are
several drawbacks that may outweigh the perceived cost savings.
Since 1991, when the first Virtual Private Network (VPN) was
implemented through Frame Relay technology, more cost effective
Since public IP VPN carries information across multiple and non-
shared networking solutions became available for businesses.
specified IP backbone infrastructures, there is no control on the
What VPN does in essence is to virtualise the leased line
end-to-end speed and quality since these are determined by a
functionality through dedicated connections at the Service Provider
“best effort” basis. Scalability and management issues have to be
Network. Businesses require these leased lines only for last-mile
considered too, especially when a large number of tunnels have
connections, thereby reducing costs. In Malaysia, Telekom Malaysia
to be managed in the Internet cloud. In addition, when organisations
was the first service provider to provide Virtual Private Network
need to deploy business-to-business communications (Extranet)
solutions. Today, it has 142 customers using its COINS VPN.
with suppliers, partners or vendors, the public IP VPN would
require a public key infrastructure (PKI). Then, running voice and
As the global outlook changes, so too does the outlook of the
video traffic over the public IP VPN would be problematic due to
business manager. Currently, all businesses face the same situation
the latency introduced by encryption and decryption.
of having to do more with fewer resources. Thus there is a need
to increase productivity using new network communication tools
Another type of IP VPN built on public Internet is based on
and applications at a controlled cost. Fortunately for businesses,
Multiprotocol Label Switching (MPLS) technology, introduced
the landscape of shared networks has evolved drastically, with the
initially to speed up routing operations. Since the year 2000,
growth of Internet, new security technology and increased usage
router technology has improved such that it no longer requires
of Internet Protocol (IP) based applications.
MPLS. But then, another use of MPLS was discovered. If it is
implemented on an IP network, MPLS performs very much like a
Frame Relay network. For some Internet Service Providers (ISP),
this was a practical solution: why not provide VPN services on an
IP network, which was already being used to run their Internet
services anyway?
74
HQ
Telecommuter
IP VPN
deployed
per site
IP VPN
deployed
in POP
HQ
Supplier or partner
Putrajaya
Pahang
SP
Intelligence Core
Branch or
remote office
Branch or
remote office
Kuching
CPE-based VPN and Network-Based VPN
Private IP VPN is built on a private IP network, quite separate from Internet traffic. In this environment, the private IP network resources
provided by the Service Provider are shared among the business community for the deployment of their own Virtual Private Network.
TM-IPVPN is based on a private Telekom Malaysia IP built with MPLS ATM on the existing COINS network of 622Mbps. This will be
expanded soon to a pure IP intelligent MPLS backbone running on 10Gbps to cater for the growing business.
The Telekom Malaysia IP network can be accessed via any one of the following methods: Leased Lines, Digital Subscriber Lines (DSL),
Very Small Aperture Terminals (VSAT), Gigabit Ethernet, Wireless LAN, Frame Relay, Asychronous Transfer Mode (ATM), Integrated
Subscriber Digital Network (ISDN) and Dialup PSTN. Users, therefore, have the flexibility of choosing the most cost-effective type of access
for their purpose. In addition, users of TM-IPVPN enjoy guaranteed throughput level and minimal latency with fast and efficient transmission
speeds. Telekom Malaysia is also able to move the built-in routing and firewall intelligence into its virtual private network. In the long term,
Telekom Malaysia plans to introduce more value-added services that will enhance businesses' access to a cost-effective network.
TM-IPVPN is a hybrid network that is able to support two types of technology:
a)
IPSEC VPN
In this technology, a secure and encrypted tunnel between enterprise sites is created using Internet Protocol Security (IP Sec)
technology. This technology is usually implemented in a Customer Premise Equipment (CPE) based network and can be supported
in both public and private IP networks. This technology is suitable for a small-scale enterprise network due to inherent scalability
restrictions.
b)
MPLS VPN and MPLS/BGP VPN
Multiprotocol Label Switching (MPLS) VPN also creates tunnels across IP networks, but currently has no mechanism for packet
encryption like IP Sec. MPLS VPN traffic is isolated using a label similar to ATM and the Frame Relay Permanent Virtual Circuit (PVC),
thus offers the same level of security as Frame Relay or ATM network services. Interception of any of these three types of traffic
would require access to the Service Provider network. If additional security is required, traffic can be encrypted before it is
encapsulated into MPLS using IP Sec.
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operations review
BUSINESS
NETWORKING
Box
Article
TM-IPVPN: THE NEW FRONTIER IN NETWORKING SOLUTIONS
CHOOSING THE RIGHT IP VPN SERVICE
PROVIDER
whole of Malaysia reduces your operational and capital expenses
when your business grows.
Before implementing an IP VPN, businesses have to carefully
consider their business communication requirements. There must
be a thorough understanding of the various VPN options available
before an informed choice can be made which would best meet
their individual needs. The following are some compelling reasons
why TM-IPVPN should be the preferred choice.
Efficient use of bandwidth
By virtue of being connected to the IP network, TM-IPVPN
customers have access to various services such as Intranet,
Extranet and Internet, without having to pay for these.
Nationwide availability
One common business requirement is the ability at some point in
the future, of expanding the size of the business network costeffectively. TM-IPVPN meets this requirement with its extensive
nationwide nodes and rich last-mile access infrastructure options.
Having a service provider that has extensive reach covering the
Dial Router
ISDN NT
Security
There are many attractive features in an IP VPN. But according to
a report published by IDC Market Research WAN Manager Survey
2001, what most companies look for is security. Security is not
an issue with TM-IPVPN since it is a private network. As an
added feature, TM-IPVPN also supports IP Sec technology if the
customer requires end-to-end encryption. TM-IPVPN utilises the
Telekom
Malaysia
PSTN / ISDN
Dial-UP
RAS
TELEKOM
MALAYSIA
DIAL VPN
Router
Logical : PPP/HDLC/FR
Physical : Leased Line
Telekom
Malaysia
PSTN / ISDN
State-Level
BackBone Router
MPLS
BackBone Route
Channelised E1
ADSL Router
384 kbps - 2M
ATM ADSL / SDSL
Telekom
Malaysia
PSTN / ISDN
IP Service
Edge Router
ATM
Ethernet Switches
10 Mbps - 1 G Mbps
VLAN over Fibre
Telekom
Malaysia
PSTN / ISDN
State-Level
BackBone Route
MultiTenant
Satellite
Remote office A
HSP/HPP
Satellite dish
VSAT
Remote office B
Remote office C
76
TELEKOM
MALAYSIA
IP
NETWORK
Satellite dish
Satellite dish
Satellite dish
IP Service
Edge Router
concept of perimeter security implemented through a firewall that
resides at the edge of the private IP network. This firewall can be
used by the customer as double protection on top of its own
firewall in its premises. This feature will protect the customer's
network from backdoor access through the Internet. For Extranet
connectivity, TM-IPVPN provides Network Address Translation to
ensure security and privacy between business entities. Telekom
Malaysia has put much thought into the security features of
TM-IPVPN, saving customers the time, effort and money of
having to supplement it with additional security measures.
Route Diversity
TM-IPVPN supports mesh topology within the service provider
network rather than individually specified topology. Mesh
topology provides natural route diversity, allowing for fast and
easy interconnections while providing the required redundancy.
Alternative diversity in the form of ISDN backup to the
headquarters, or an ISDN route to the IP network, is also
available if required. Given these measures, organisations can rest
assured that their communication will not be disrupted, thus
allowing them to save on operational expenditure.
Prioritisation
In competitive environments, organisations introduce new
applications with unfamiliar properties that may utilise higher
bandwidths, resulting in mixed applications. In such situations,
organisations must give priority to mission-critical applications
such as Citrix, ERP and SNA over IP-based applications that are
non-mission-critical. If not, the non-mission-critical applications
may burst and consume most of the available bandwidth.
Recognising this, TM-IPVPN provides prioritisation features which
once again help businesses save on operational and capital
expenditure in the long term.
Shared knowledge
As more enterprises are moving towards client servers and
business critical applications such as Enterprise Resource
Planning (ERP) and Customer Relationship Management (CRM),
they can connect employees from other branches to headquarters
for access to critical information to assist them in purchasing
parts or even in inventory maintenance. These cost-saving
measures double as tools with which employees can access
information as and when required. Further, decision-making will
be easier and better as a result of information-empowered
employees.
Organisational effectiveness
TM-IPVPN allows you to transfer large files to other branches
with ease, thus saving on time and money while also increasing
productivity. For example, a design firm can transmit large files
to its branches without using expensive and time-consuming
couriers to physically transport the documents.
Remote working
Using this, the mobile or remote worker can access the corporate
system for important information from any location. It also allows
a mobile sales force to access the company’s CRM system.
Enabling them to retrieve customer profiles enhances service
efficiency which in the long run will increase business agility and
performance.
TM-IPVPN also offers the flexibility required to adapt to rapidly
changing business conditions, such as an increasing or decreasing
workforce size, plus also helps to get new branches going.
SERVICE OFFERINGS
TM-IPVPN currently offers four types of services – Managed
Intranet, Managed Remote Access, Managed Extranet and
Managed Security Services.
1.
Managed Intranet
This provides clients with flexible and cost-effective
solutions allowing for secure intra-company communication
between corporate and branch offices. Companies can
better control their costs and manage geographically
dispersed locations by outsourcing the function to Telekom
Malaysia leveraging on its private backbone. Telekom
Malaysia’s managed solutions allow for fully-meshed and
access technology-independent connectivity to its clients.
2.
Managed Remote Access
This provides clients with a flexible and cost-effective
solution for managing increased demand for secure
communication between the corporate office and road
warriors, telecommuters and small offices. Access technologies
in use today include dialup, DSL, wireless and cable.
Telekom Malaysia supports dial access over PSTN (using
the COINS Dial VPN service) and, in future, DSL access.
3.
Managed Security Services
This provides clients with a cost-effective solution for
managing their security and connectivity requirements. By
meshing the client’s own network personnel with third-party
security specialists, the client will have truly comprehensive
security at all levels of IT, from the network level up to the
application layers. Collaborating with a security service
provider gives a client both depth and breadth of security
tailored to meet its specific needs. For a start, Telekom
Malaysia offers managed firewall solutions, designed to meet
the perimeter security requirements of both small-to-medium
and large businesses. Telekom Malaysia’s solutions include
Packet Filter Firewalls and Stateful Inspection Firewalls.
4.
Managed Extranet
Extranet VPNs enable businesses to be more closely
connected to their suppliers, distributors and customers.
This service is a combination of all the above services.
77
Maximising
Mobility
From one place to another
Connected we remain
Through short messages we share
The joy of laughter and happiness
From m-commerce to m-banking
Mobility delivers convenience
The freedom of mobility
Facilitates productivity
By maximising mobility
MANAGEMENT
DATO’ DR. IR. MOHD
KHIR HARUN
Chief Executive Officer
operations review
Cellular
- TM Cellular
Sdn. Bhd.
TM Cellular Sdn. Bhd. (TM Cellular) is the provider of the digital cellular
network, TMTOUCH, which operates on the Global System for Mobile
Communications (GSM) technology. This technology is based on the 1800
frequency spectrum which offers benefits such as greater security, better
coverage indoors and outdoors, superior speech quality, clearer
transmission, greater capacity and data transmission capabilities.
During the financial year under review, TM Cellular’s revenue grew by 7.5% to reach RM1.164 billion compared to RM1.083 billion the
previous year. A major contributing factor to this growth was the increase in the number of prepaid subscribers. For the financial year
2002, TM Cellular turned in a profit before tax of RM10.4 million (excluding waiver of shareholder loan), marking a remarkable turnaround
from its loss-making in 2001.
80
There was an increase in the number of TMTOUCH prepaid subscribers in
2002, registering more than one million as at 31 December 2002. This
represents an increase of more than 160% from just under 400,000
prepaid subscribers in 2001. This is in line with the Company’s strategy
of making the prepaid segment the dominant service. This has been
achieved through creating more value for customers, enhanced by attractive
consumer campaigns and competitions.
During the year, several attractive packages were introduced to attract quality postpaid customers and to stay on par with market offerings.
Towards this end, new plans and innovative packages were developed to complement existing ones and to cater for changing market
demands. Extensive research and measures were also taken to foster closer relations with existing corporate clients.
In the year 2002, TM Cellular practised a cautious approach in terms of acquiring new postpaid customers, concentrating instead on
customer retention, collection and increasing the average revenue per user (ARPU). As such, the postpaid segment showed a decrease of
32.0% from the previous year. Steps were also taken to revise the subscriber registration policy and the dealers’ incentive structure.
In a continuing effort to improve customer service, in the
beginning of 2002, TM Cellular launched Best Practices – a set
of guidelines for TMTOUCH Service Centre staff, which also
outlines the right conduct and presentation when staff deal with
customers.
In an endeavour to enhance the Company’s partnership with its
dealers and principals, a TMTOUCH sales campaign, Cash
Odyssey, was launched in Johor Bahru in April 2002. The sales
campaign came complete with a new package of incentives for
dealers. This was followed by the TMTOUCH Escapade sales
campaign, launched in Sabah in the second quarter of the year.
Currently, TM Cellular offers specially designed packages such
as the Millennium Plus, Touch Extreme and Touch Premium.
The different packages offer distinct features for a diverse
profile of users – ranging from heavy users to those who rarely
make calls but are always on the receiving end.
Launching of the prepaid mobile special edition.
81
operations review
A vast range of
mobile offerings.
In a move to be on par with other cellular providers
worldwide, TM Cellular strives to stay in tune with the everevolving cellular technology. For the year 2002, TM Cellular took the
lead in demonstrating the Multimedia Messaging Service (MMS) at
the Asean Communications and Multimedia Exhibition. TM Cellular’s
MMS enables users to view items prior to purchase, such as cars or
handphones. For executives and business users, TM Cellular’s MMS
means that business reports, charts and graphs can be transmitted
directly from a PC or notebook to a mobile phone, or between
mobile phones. TMTOUCH subscribers who intend to use this service
require an MMS enabled mobile phone and a GPRS SIM card.
Another mobile-commerce service introduced by TM Cellular was the Mobile Banking and
Payment Via Secure SMS, which allows consumers to conduct banking transactions via
their cellular phones. This exemplifies TM Cellular’s commitment to continuously develop
cutting-edge products and applications that suit the demands of today’s users; and to
bring the latest developments in cellular technology to its subscribers.
Besides International Roaming and value-added services such as the TMTOUCH 600 Info
Access Call Waiting, TM Cellular has introduced a wide range of SMS based products and
services that increase customer convenience and serve to capture the growth potential of this
very lucrative platform. TM Cellular currently offers a suite of 14 SMS services, including:
TMTOUCH SMS Info Stock
Displays the latest information on the stock exchange and helps subscribers monitor their
investments.
TMTOUCH Mood Swingers
Offers a range of more than 1,000 ring tones and logos that can be downloaded.
TMTOUCH SMS Summons Checkpoint
This collaboration between TM Cellular, Polis Diraja Malaysia and Telekom Applied
Business Sdn. Bhd. allows subscribers to check for traffic infringement summons.
82
TMTOUCH YAHOO! Messenger
check the status of their application by providing their IC number,
In partnership with Yahoo!, this service enables users to
company’s registration number or just the name of the company.
communicate online, without a personal computer. TMTOUCH
subscribers can send, receive and reply to instant messages
TMTOUCH Basis Checking via SMS
online.
Allows authorised TMTOUCH dealers and vendors to check
potential customers against a blacklist, prior to registration.
SMS KLIA Flight Info
Enables subscribers to check the arrival and departure times of
TMTOUCH JPJ SMS Renewal Status
domestic and international flights at KLIA.
Enables subscribers to check on the validity of their road tax and
driving licence directly from JPJ via SMS.
TMTOUCH SMS Bill Info
Allows subscribers to check their bill summary and payment
TMTOUCH SMS Weather Info
history via SMS.
Allows subscribers to check the daily weather forecast.
TMTOUCH SMS Soccer Alert
TMTOUCH Iman
Keeps subscribers in touch with results of their favourite soccer
A special service providing access to features like Islamic ringing
leagues and tournaments, even as the matches are being played.
tones and picture messages. Besides that, it also offers an
Islamic directory such as prayer times, qiblat finders, a list of
TMTOUCH SMS UPU Service
mosques and halal restaurants worldwide.
Enables subscribers to check the status of their enrolment to
local universities through Unit Pusat Universiti (UPU).
TM Cellular also undertook various special projects during the
year, one such endeavour being the successful implementation of
DATATOUCH (data warehouse application) catering to prepaid
subscribers. DATATOUCH is currently undergoing function
enhancement to expand its scope to both prepaid and postpaid
subscribers. New features are being incorporated which are
expected to be launched in the first quarter of 2003. DATATOUCH
will enable TM Cellular to understand the trend of current and
future subscribers and their requirements for effective product
development and marketing campaigns, thereby supporting the
Company’s overall business growth.
TM Cellular has also begun upgrading its Customer Contact
Management System infrastructure, to improve its capacity and
allow for new self-service features. The exercise is 90% completed
and targeted to be launched by the first quarter of 2003.
On the billing front, TMTOUCH customers no longer have to face
long queues at payment counters because its Service Centres are
equipped with the Automated Payment System. The system was
TMTOUCH – SMS Yellow Pages.
successfully implemented nationwide in February 2002. To
complement the Billing System towards better customer service,
TMTOUCH SMS Yellow Pages
Facilitates instant access to Yellow Pages information via SMS.
TMTOUCH SMS Share Application
An SMS info-on-demand service that gives subscribers access to
the latest results of Initial Public Offering counters as listed by
the Kuala Lumpur Stock Exchange. It also enables subscribers to
TM Cellular also linked all the service centres to the headquarters
via COINS. This was completed in November 2002.
In addition, automatic reconnection was implemented in June
2002. This ensures that TMTOUCH customers’ lines and services
are re-activated automatically after being barred, once the due
payment has been received.
83
operations review
In the move towards Mobile Banking and Payment Via Secure
Sepang from 21-23 June 2002. In conjunction with the event,
SMS, TM Cellular sealed various agreements with local and
TMTOUCH subscribers were able to download logos and designs
regional partners such as SMART Money Holdings Corporation
of GT cars on their handphones.
(Philippines), Sonera SmartTrust AB and Prism Transactive (M)
Sdn. Bhd. in the second half of the year.
In 2002, TM Cellular appointed a one-stop agency through the
TPA (Tenureship Partnership Agreement), an agency which will
TM Cellular also cemented a deal with ACeS Philippines Cellular
act as an intermediary between telcos and relevant local authorities
Satellite Corporation and APAC ACeS (Malaysia) Sdn. Bhd. on
to plan and legalise all Base Transceiver Station (BTS) structures
22 October 2002, to provide satellite telecommunication facilities.
as well as co ordinate the building of new ones. During the course
This will enable TMTOUCH subscribers to communicate via satellite
of the year, TM Cellular signed various MOUs on the leasing of
phone, especially in areas that lack basic telecommunication
BTS structures with subsidiaries of the Terengganu, Pahang and
facilities and infrastructure.
Sarawak State Governments.
The agreement involves satellite airtime reselling and supply of
On the industry consolidation front, Telekom Malaysia and Celcom
network infrastructure for satellite communications between the
Malaysia Berhad (Celcom) signed a Conditional Sale and Purchase
satellite phone service run by Smart Communications Inc., ACeS
Agreement on 28 October 2002, for the sale of TM Cellular to
Philippines Cellular Satellite Corporation and TM Cellular Sdn.
Celcom. The total purchase consideration of RM1,684.0 million will
Bhd., with APAC ACeS (Malaysia) being the terminal supplier for
be satisfied by the issuance of 635,471,698 new Celcom shares
the service.
at RM2.65 per share. Upon completion of the transfer, Telekom
Malaysia’s shareholding in Celcom will increase from approximately
Among other major activities, TM Cellular was the Official Cellular
31.2% to 47.9% of the issued and paid-up capital of Celcom.
Provider for the Seventh Conference Of The Ministers of
Endowments and Islamic Affairs, held in May 2002. On the
The signing will clear the path towards a full merger of Celcom
sporting front, the Company was appointed as the Official Cellular
and TM Cellular, thus fulfilling Telekom Malaysia’s objective of
Provider for the Telekom Malaysia Le Tour de Langkawi 2002 for
becoming a leading mobile telecommunications services provider
the second year running and for Sukan Malaysia IX 2002, Sabah
in Malaysia. The resulting entity will see a combined subscriber
(SUKMA). In addition, TM Cellular was the title sponsor for the
base of over three million customers and a leap in market share
TMTOUCH Japan GT Championship Malaysia, which was held in
to approximately 42%.
This momentous exercise is expected strategically to improve the
position of the enlarged entity in the high-growth mobile market.
Even on the technology and network coverage alone, there is
excellent fit. On the GSM standard, the business combination
provides the combined entity with the best of both platforms – the
GSM 900 platform, which is good for covering large areas; and
the GSM 1800, better for coverage in densely populated areas.
The two entities have embarked on a planned process to integrate
their operations. As an example, at the end of 2002, they rolled
out the Joint Domestic Roaming Service and the Cross Bill
Payment convenience for their combined customer base.
The first phase of the Domestic Roaming was announced by
Y.B. Datuk Amar Leo Moggie, Minister of Energy, Communications
and Multimedia, on 14 October 2002. This is the first seamless
domestic inter-network roaming service in the country.
TM Cellular – Title Sponsor of the Japan GT.
84
The Company is looking to increase its subscriber base and ARPU; and at
the same time improve its capital and operational efficiency. TM Cellular
is planning to focus more on profitability, in line with industry operating
parameters; operating efficiency; and on being the Best In Class for
Customer Service and Network Quality.
On the integration front, after receiving the relevant regulatory approvals, both Telekom Malaysia and Celcom have sought and obtained the
approval of their respective shareholders for the transaction.
It is the aim of the integration process to create better value and benefits for customers. The Joint Integration Steering Committee,
comprising Telekom Malaysia, Celcom and TM Cellular senior management, was established to guide and plan for a smooth integration of
both entities. The Integration Masterplan will be implemented over an 18 to 24-month period and will look at areas such as infrastructure,
network, customer touch points and human resources.
TM Cellular will leverage the integration with Celcom to offer, ultimately, 95% coverage nationwide. In addition, when the two businesses
are integrated, a broader range of products and services, including customer service, will be made available. TM Cellular is also planning
to conduct in-depth research on customer behavior in preparation for the integration.
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operations review
Box
Article
ONLINE TRANSACTIONS
and
MOBILE BANKING
ONLINE TRANSACTIONS
hile the dotcom bubble was still fast-expanding in the
late-1990s, marketing gurus and industry experts were
all harping about the e-commerce revolution. E-commerce
promised to give the consumer maximum choice at
lower prices, increased competition, reduced distribution
costs, so on and so forth. Triple-digit growths were forecast. There were
more clever business models, smart people and general optimism than
there was actual business.
W
Five years on the world has become much wiser. Today, everyone can see
the myth from the money. This is not to say that e-commerce has failed.
Far from it, e-commerce continues to grow and gain adherents. US online
sales grew by 34% to US$47.9 billion (RM182 billion) in 2002. As such,
e-commerce is not a failure. It’s just not growing at the interstellar rates
predicted earlier. There is, however, one segment of e-commerce that is
growing at astronomical rate – online transactions.
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ONLINE TRANSACTIONS IN MALAYSIA
WHY MALAYSIANS TRANSACT ONLINE
E-commerce is defined as “buying and selling information,
In general, consumers conduct online transactions for the
products and services via computer networks”. In other words,
following benefits:
making transactions online, which, according to statistics, is
1.
Convenience
being readily assimilated into the Malaysian culture, although
2.
Speed
such transactions do not necessarily end in sales. While only
3.
A tool to improve control over finances
15% of Malaysian Internet users have bought things online, it is
4.
Private interaction (as opposed to talking to a counter clerk)
estimated that about 30% of the same group make use of online
5.
Availability of information
transaction facilities.
6.
Perceived or real savings
This pattern is in sharp contrast with the US experience, where
People who conduct transactions online also tend to have higher
70% of Internet users buy online but only 33% use online
levels of income and education. Males are found to be more likely
transaction facilities.
to transact online. Plus, users tend to be younger.
Perhaps the most well-known Malaysian online transaction
Just about every major bill (and a lot of “minor” ones) can be
destination is www.maybank2u.com. Since the service was
paid online, including that for your phone service, electricity,
launched in June 2000, it has logged over 16 million transactions
water, TV, credit cards, municipality fees, insurance, membership
with a registered customer base of about 700,000. A study on
fees, ISP, and loans.
online banking found it attracts a more diverse group of Internet
users than other financial activities, such as buying or selling
While the payment of bills online is not likely to replace over-the-
stocks online, or even seeking financial information online.
counter transactions completely in the short-term, the trend
definitely points to that direction. Already, Pos Malaysia, the
By far, the most popular online transaction activity in Malaysia is
country’s most ubiquitous bill payment facilitator, is updating and
the payment of bills. And banks and other online transaction
streamlining its operations to be web-enabled.
agents recognise this. Maybank2u.com, for example, has 342
partner payee companies to date. Relatively speaking, the
adoption of online banking in Malaysia is nothing short of
MOVING FORWARD
phenomenal, even when compared that in the US which,
While the payment of bills appears to have a firm and probably
incidentally, has grown an impressive 164% in the past two
permanent foothold in online transactions, it is by no means the
years.
only kind of online transaction available to customers.
So what is it about online transactions that appeals to the unique
Online banking activities such as enquiries, the transfer of funds
psyche of Malaysians?
and management of personal accounts are already available to
Malaysians. It is probably only a matter of time before these and
other online transaction activities really catch on in Malaysia.
All this is good news for full-service Internet Service Providers
like TM Net. TM Net seeks to provide the means for Malaysians
to move forward on the Internet. At present, TM Net provides the
following facilities for consumers who wish to transact online:
TM Net Internet Access: either through Streamyx or Prepaid,
both affordable means for people to get online.
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Article
ONLINE TRANSACTIONS
and
MOBILE BANKING
Bluehyppo.com: this full-service portal is an ideal first- and one-
The advent of broadband, too, will boost online transactions by
stop place for consumers to transact online.
increasing speed of delivery. In addition, newer approaches for
Netmyne: provides business solutions to enable businesses to
take advantage of online transactions and other IP-enabled
activities. Also a partner of all major local banks that are online.
Two key factors that will drive online transactions are convenience
and confidence. Combining the convenience of mobility and
Internet reach, with a secure payment mechanism, will see online
transactions booming. This new line of potential will see
communication companies being well positioned to tap the new
source of revenue. However, to realise this potential, there will
need to be speed and focus. Also, a number of service providers
will be required as the processes and the supporting environment
will transcend a variety of institutions.
The consumer segment is expected to be a major growth area.
While online transactions between businesses will still be fraught
with customised processes that require common understanding
between providers and users, consumer demand will be created
by the variety of services made available at the convenience of a
touch. Till now, online financial services have been proven to be
very popular. It is possible that entertainment facilities will follow,
given the convenience of being able, for example, to book and
buy tickets online.
the consumer market, like location-based, pushed information to
entice users, will draw more customers, especially in popular
activities such as shopping.
Online transactions are set to flourish. But will Telekom Malaysia
be able to keep up with the flow? The answer would appear to
be a resounding “yes”, given the Group’s strong presence in the
Internet through TM Net and the mobile sector via TMTOUCH and
Celcom, complemented by a presence in payment services via
Telekom Technology Sdn. Bhd. and online applications through
TM Net. Telekom Malaysia’s share of the online transactions pie
will depend on the amalgamation of efforts in these three areas,
to offer comprehensive and attractive services.
MOBILE BANKING
Along with the ICT industry in general, cellular technology has
evolved such that it no longer satisfies the function of
communication only. These handheld contraptions not only keep
us in touch with one another, but also allow us to access
information, such as that regarding our bank accounts. In fact,
the possibilities offered by mobiles are at least as far-reaching as
that provided by the Internet, so much so it has spawned a new
buzzword: m-commerce. And TM Cellular Sdn. Bhd. intends to
Indeed, the potential range of online transactions is far and wide.
E-Government related transactions, such as the payment of fees
and levies online, will soon become a routine. Advances in mobile
technology, meanwhile, will allow for person-to-person (P2P)
transactions and transfers, and point-of-sale (POS) purchases via
mobile phones.
88
be the pioneer in offering customers the gamut of facilities
m-commerce can provide.
TM Cellular Sdn. Bhd. successfully launched the TMTOUCH
While the Smartcard has yet to arrive on our shores, m-commerce
Mobile Banking and Payment via Secure SMS on 8 October 2002.
in Malaysia does encompass a novel Multimedia Messaging
Partnering with Bumiputra-Commerce Bank Berhad (BCB),
Service (MMS). With MMS, you can send and receive animated
TM Cellular Sdn. Bhd. offers an innovative alternative to
graphics, still pictures, and audio and video streaming on your
conventional modes of banking, such as walk-in banking, using
mobile. TM Cellular’s MMS enables users to analyse items they
the ATM, phone banking and Internet banking. This service
are interested in purchasing, such as cars and mobile phones,
enables TMTOUCH subscribers who are also BCB account holders
and even to view holiday resorts they may wish to stay in. For
to do their banking via their mobile phones. In order to enjoy this
executives and business users, TM Cellular MMS can be used to
service, TMTOUCH subscribers simply need to upgrade their
transmit business reports, charts and graphs directly from a PC
present 8K or 16K SIM cards to 64K browser SIMs.
or notebook to a mobile phone, or between mobile phones.
Among the banking services that can be conducted via SMS
TM Cellular took the opportunity to demonstrate some of its more
include balance enquiries, fund transfers, changing of PIN
compelling MMS applications over GPRS (General Packet Radio
numbers, checking of credit card balance and making payment,
Services) at the recent Asean Communications & Multimedia
checking the due date of credit cards, loan payment (such as
(ACM) exhibition in Kuala Lumpur.
housing and personal loans) and checking fixed deposit status
such as the maturity date. Soon, customers will also be able to
Next to m-commerce, another upcoming trend are 3G applications
use their mobiles to settle utility bills with Telekom Malaysia,
and services, which rely on MMS as their key business driver
Tenaga Nasional, Indah Water, Jabatan Bekalan Air Selangor and
using General Packet Radio Service. In fact, 3G technology will
Gas Malaysia, as well as pay Universiti Kebangsaan Malaysia and
provide a much greater range of multimedia capabilities and
Progressive Insurance fees. And the list continues to grow fast.
roaming facilities, at higher speeds, than the usual GSM network.
Moreover, the 64K SIM card also makes it easier for subscribers
Initially, 3G will be available on traditional handsets, but it is
to access other TMTOUCH SMS products such as Moodswingers,
expected eventually to outgrow these.
TMTOUCH Summons Checkpoint, Stock Info and News & Sports.
In anticipation of a wave of 3G in Malaysia by 2004 or 2005,
In Europe, m-commerce has advanced by leaps and bounds
TM Cellular will conduct a feasibility study on the availability of
thanks to the multi-tasking and innovative Smartcard, which can
3G handsets, market readiness for the technology and availability
be used to buy pizzas and groceries, reload prepaid cards and
of the required infrastructure before going full steam on setting
connect to bank accounts, all via the mobile phone. In fact,
up 3G networks. TM Cellular also foresees the service convergence
pundits even predict m-commerce may overtake e-commerce
concept integrated into the business environment over the next
because transactions over the mobile network are safer than
few years. However, the roll-out and uptake of such services
those conducted over the Internet. M-commerce transactions over
depend ultimately on consumers’ expectations.
GSM (Global System for Mobile Communications) are safe as
both data and voice carried over the air are encrypted.
89
Surfing
Without Wires
No cables to shackle
No walls to confine
Pick a spot, pick a Hotspot
Work and play, any way you choose
Our Hotspot wireless broadband
Will set you free
By surfing without wires
operations review
Multimedia
Services
MANAGEMENT
TM Net Sdn. Bhd.
BAHARUM SALLEH
92
- TM Net Sdn. Bhd.
The performance of TM Net Sdn. Bhd. (TM Net) in
2002 is a testimony of its resilience and the dedication
of its team in achieving consistent growth despite
uncertainties in the economic climate.
July 2002 marked a significant change when the business of TM Multimedia (a division of Telekom
Malaysia) was migrated to a newly incorporated company known as TM Net Sdn. Bhd., a wholly
owned subsidiary of Telekom Malaysia. TM Net Sdn. Bhd. has adopted a new corporate logo
reflecting its new culture and spirit. The new TM Net is more agile, market oriented and customer
focused. With this transformation, customers can expect more accessible, affordable and reliable
Internet related services.
In 2002, TM Net spearheaded the market’s evolution towards broadband. It maintained its leadership
position in the ISP market with a total subscriber base of 1.9 million. Revenue (combining that of
TM Multimedia and TM Net Sdn. Bhd.) grew by 23.0% to RM370.0 million attributed to a large
extent to the key drivers for growth, namely tmnet streamyx, tmnet direct and tmnet prepaid. Also
contributing to the revenue were other access services, application services and content services.
For the financial year under review, TM Net attained a profit before tax of RM5.3 million on the
back of RM161.8 million in revenue (from July to December 2002). That is commendable
achievement considering that the company was expected to be profitable only from the year 2003
onwards. TM Net’s turnaround to profitability within a relatively short span of time marks a first
for a subsidiary of Telekom Malaysia and bears testimony to the focused and concerted efforts of
the Company.
In year 2002, tmnet streamyx recorded a 93.0% growth as compared to that of 2001, while tmnet
direct and tmnet prepaid grew at 48.0% and 94.0% respectively. The main drivers for revenue growth
were not only dependent on key products but also on effective partnerships and marketing strategies.
Given the concerted effort to improve revenue growth and profitability, total operating expenditure
was reduced by 46.3% to RM81.2 million (combining that of TM Multimedia and TM Net Sdn. Bhd.)
in 2002 compared to operating expenditure of TM Multimedia in 2001. A drop in bandwidth costs and
prudent spending on overheads also contributed to huge improvements in the operating expenditure.
The Company also recorded a lower capital expenditure of RM167.0 million (combining that of
TM Multimedia and TM Net Sdn. Bhd.) in 2002 compared to capital expenditure of TM Multimedia
of RM180.0 million in 2001. A large portion of the capital expenditure was channeled to access
services to expand and upgrade the system and network in order to improve service offerings.
Of this, more than RM90.0 million was spent on point-of-presence (POP) expansion while content
services, application services and systems support, accounted for the rest.
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operations review
With 11% Internet subscriber penetration in this country, TM Net believes
the time is right for migration to broadband. In 2002, tmnet streamyx was
a top performer in the Malaysian broadband market and became the third
largest revenue contributor to TM Net. In an effort to make broadband
Internet access more accessible, attractive and affordable in the market, the
Company has reduced the price of its new packages by almost 63%. In
the coming year, TM Net will prioritise broadband service as a strategy to
meet the demands of the market.
In the year under review, TM Net has achieved a subscriber base of 1.9 million, of which 1.5 million were from access services, 7,937
from application services, and 380,884 from content services.
Services from TM Net
Access Services
TM Net Sdn. Bhd. is the leading Internet Service Provider (ISP) in Malaysia, providing a wide range of access services using a multitude
of technologies. While maintaining tmnet 1515 and tmnet 1525 services, the company introduced tmnet streamyx at end 2001. This new
service is beginning to transform the way people live, work and do business. Broadband has enabled businesses and individuals to
participate more effectively in the e-economy. It enhances the ability of Malaysian enterprises to compete in a modern global economy,
further improving the functioning of the domestic market and empowering people with greater knowledge.
In addition, TM Net also introduced tmnet prepaid, Malaysia’s first
prepaid Internet access via a card and CD. Besides being the most
convenient means for customers to get online, it provided a medium of
payment for multimedia services such as games online. Both services
showed tremendous market uptake that provide a positive improvement
of the customer-based average revenue per user (ARPU).
94
While focusing on tmnet prepaid and tmnet streamyx as new
•
revenue contributors, tmnet direct continued to be a key profit
centre, charting stronger revenue growth as compared to 2001. The
e-Bina is the first fully integrated national construction
industry IT platform launched on 23 December 2002
•
emphasis for this coming year will be to strengthen the focus on
myBizPoint is an online business solution that provides
comprehensive, economical and flexible packages to suit the
broadband, applications and contents for a total solutions offering.
Internet needs of small and medium businesses
•
communication services consist of several applications that
allow users to communicate and collaborate via the Internet
Application Services
TM Net is spearheading broadband adoption by making its
These services allow users to optimise broadband for improved
applications more accessible via Netmyne. Broadband enables
productivity. In addition, TM Net continues to provide a
new and improved services such as enhanced public services in
comprehensive means for businesses to gain easy access to the
addition to improving business productivity and competitiveness,
Internet through other services like hosting, payment gateway and
and new forms of entertainment. Cashing in on this, TM Net has
streaming.
introduced five new broadband-based applications, namely e-Health,
e-Conference, e-Bina, myBizPoint and communication services.
•
•
e-Health is a new integrated Internet solution that improves
Content Services
healthcare benefits management systems through online
To complement its web-based applications, TM Net continued in
applications
its efforts to provide an aggregated content platform. In 2002,
e-Conference is an e-commerce solution that uses audio,
BlueHyppo was the single largest content aggregator in the
video and web-conferencing tools to communicate multipoint-
country. In only its second year of operation, BlueHyppo was
to-multipoint in real time over the Internet
again voted as a Top 88 site in the country by The Edge.
In continuing as the single largest aggregated contents platform,
www.bluehyppo.com has greatly contributed to extending both
TM Net’s and the Telekom Malaysia Group’s sphere of influence
in the online world. Offline, it has also brought TM Net and the
Group closer to the people, as evidenced by the positive response
to Bluehyppo.com’s game tournaments and Anniversary celebrations
in addition to continued high-traffic generation to the site.
Launching of TM Net’s another broadband application service:
Netmyne e-Conference.
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operations review
The focus on building its content repository has resulted in a
Bahru, Pulau Pinang, Kota Kinabalu and Kuching, based on the
high number of page views throughout the year. As well as being
revamped image of the existing HOI in Kelana Jaya. To minimise
the country’s premier online content aggregator, TM Net also has
the application processing time, for broadband services TM Net is
its own internally generated content that has proven to be popular.
developing an online registration system, which is expected to be
available in the first quarter of 2003.
As TM Net continued to aggregate trilingual contents, it has also
expanded to include aggregated broadband contents in tandem
The Company is committed to delivering quality customer service,
with TM Net’s broadband expansion. The broadband content
and has dedicated 1-300 lines available 24 hours of which
categories include entertainment and games in response to
1-300-88-1515 is dedicated for the consumers and 1-300-88-9515
market demand. The broadband content was further enriched with
for business customers including all broadband customers.
the introduction of a new subchannel, e-l@ne. With such contents,
TM Net has also employed more staff to attend to customers’
Bluehyppo.com has to date registered 380,884 members, 65
calls at the Customer Interaction Centre. The call centres have
million page views and 400 million hits.
separate consumer and business divisions in order to speed up
interaction time.
Responding to Customers
The billing system has also been improved to be more accurate
TM Net has always been proactive and sensitive to its customers’
and timely. For the convenience of customers, an online payment
needs. In the year 2002, tmnet streamyx received favourable
system has been made available through SelfCare via the website
response from the market, especially from the consumer segment.
http://tmbil.tm.net.my which enables customers to view, print
Improved quality of service (QoS) and specific promotional activities
invoices and settle payments online or at a Kedai Telekom.
were among the major steps taken to build customer awareness
and knowledge of tmnet streamyx. By complying with mandatory
QoS standards, regulated by the Malaysian Communication and
Partnerships
Multimedia Commission (MCMC), TM Net ensures that only the
In order to grow its content and application services, TM Net has
best service quality is delivered to its customers.
partnered with a variety of parties to offer application services to
industries such as healthcare and construction. The success of its
To facilitate subscription to an Internet account, TM Net has
partnerships has resulted in the launch of e-Health, e-Bina,
increased the number of resellers for its services, resulting in a
e-Conference and e-l@ne.
larger distribution network. In addition, TM Net is opening additional
Houses of Internet (HOI) in other major cities, namely Johor
Going from strength
to strength –
Bluehyppo.com.
96
As part of its marketing strategy, TM Net has developed a network of distributors to sell its products and services,
for whom it organises training programmes to increase efficiency. The Company will also be focusing on the
business segment by moving towards a total solutions offering.
Another key partnership is with DRB-HICOM Information Technologies Sdn Bhd to launch the first national PC,
KOMNAS Twenty20. Under this partnership, TM Net provides Internet access as well as attractive contents and
solutions, with BlueHyppo as the default content/application page in KOMNAS Twenty20.
TM Net has also partnered with the Ministry of Energy, Communications and Multimedia and Pos Malaysia to
introduce 14 Rural Internet Centres (RICs) all over the country. This is to assist in the Government’s aim of
narrowing the digital divide.
To enhance convenience, TM Net also unveiled the first tmnet amalgamated access, application and multimedia
content in a single offering. The prepaid CD offers an alternative for speedy access to people who stay in places
where broadband services are still unavailable. Called powerSurf, this value-added service provides an accelerated
web browsing and content delivery of up to three times faster than dial up (56kbps) speed. The CD also offers an
email virus shield application.
In the coming year, TM Net anticipates growth in broadband
and VoIP services. Therefore, the Company will be investing
in QoS improvements that are expected to contribute
positively to the demand for broadband services, broadband
related content and broadband applications.
The company will also continue to build on the positive demand for broadband based communications applications
and prepaid services established in 2002.
Whilst the broadband service saw a myriad of learning experiences, the coming year will see the quality of service
being focused, in parallel with the expansion of the service.
The key drive in the coming year will see TM Net addressing its customers with a total solution approach for an
enriching customers experience with Internet, the medium of the future.
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operations review
e-COMMUNITY
Box
Article
he country’s thrust into the information age began in earnest in
the 1990s, when several initiatives were taken to drive information
technology and its offshoot, the multimedia industry. All of these
supported our Prime Minister Dato Seri Dr. Mahathir Mohamad’s
Vision 2020 of seeing Malaysia evolve into a developed nation.
T
In retrospect, what began as a relatively modest desire to be IT savvy has
now evolved into a mission to turn Malaysia into a country that embraces
information and communication technology so wholeheartedly that it changes
even the way the country is governed. In the forseeable future, the public
and private sectors as well as the community will contribute actively to a
participatory form of governance.
For this to work, however, there has to be a change in the mindset of the
populace. That is one of the reasons why it is important to create an
e-community, namely a community that has the skills and resources to
access information and the desire and knowledge to make good use of it.
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When the National Information Technology Council (NITC) was set
There exists, therefore, an unmistakable “digital divide”, one that
up in 1994, it was with the purpose of guiding the Government
the Government is fully aware of. What’s more, there are more
on matters related to IT such that this budding industry and its
people on the “have-not” side of the dividing line than there are
applications could be used as a tool to help the country prosper.
across the fence. In schools, for example, where Internet access
Those days, the use of computers was still in its infancy and the
would be a good place for young ones to start acquiring important
Internet was virtually unheard of. In less than a decade, however,
ICT skills, as many as 90% of primary schools and 75% of
IT has become such an integral part of communication that it is
secondary schools are lacking in this simple facility (Ministry of
very much integrated into our lifestyles. We no longer write
Education, 2000). Another figure for concern: half of the total
letters, but send emails; we don't apply for fixed line phones, but
number of Internet subscribers in the country reside in the Klang
opt for the more versatile mobile; we don’t look up encyclopedias
Valley.
or dusty journals for information, but click on the mouse and surf
the Net...
The existence of such lop-sided disparity in a country does not
augur well for its progress, not only because the majority are not
Life has changed significantly, thanks to advances in information
in a position to benefit from the inherent advantages of being
and communication technology (ICT). Using the NITC’s definition
“connected”, but also because such polarity has the potential to
of an e-community as one in which networks of communities
cause friction among the have’s and the have-not’s. It is, therefore,
dynamically participate in the process of governance to enhance
in the interest of national unity as well as national prosperity to
the quality of life of Malaysians, we may not as yet qualify fully for
bridge the existing gaps and provide access to facilities and
the title. But we are definitely on our way there, as we are already
amenities to those who currently do not get to enjoy them.
“connected” and use our connections to make everyday life easier,
more efficient and enriched. When we say “we”, however, we
There are, however, two parts to creating an e-community, as the
tend to mean urbanites with a certain level of income who have
NITC realises. In a paper on “Access and Equity: Benchmarking
been exposed to the multifarious benefits and conveniences of
for Progress”, published in 2000, NITC states that simply providing
ICT. And not everyone in the country enjoys the same privileges.
the infrastructure, or infostructure, will not do the job. It is equally
important to make sure the communities involved are prepared to
To illustrate the point, consider this: certain basic utilities such as
use the facilities provided, and have the required skills and
electricity are needed to power the usage of ICT. However, while
knowledge to do so. In other words, an e-community requires a
the whole of Peninsular Malaysia is supplied with electricity, some
certain mindset. Sometimes, creating this is harder than providing
20% of Sarawak and 25% of Sabah are still without this energy
the hardware.
utility. There are also those below a certain income level who
simply cannot afford to own a phone (either fixed line or mobile)
Supported by the NITC, many projects are being undertaken, both
let alone a computer. In addition, there are those in pockets of
to make ICT available to people and places lacking access to such
society who, for one reason or another, are marginalised in terms
technology, as well as to win over converts to its usage. The
of access to ICT. These include non-working women, the disabled,
NITC Strategic Agenda, launched in 1998 was designed to plan a
the youth and the aged.
strategic path towards Malaysia’s entry into an e-world. It has
identified five areas that need to be looked into to make the vision
a reality. The establishment of an e-community is one of them.
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e-COMMUNITY
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Article
The NITC is thus providing as much support as it can to efforts
Bario, situated in a beautiful valley about 1,000 metres above sea
aimed at popularising ICT. For example, it has set up a grant to
level, has no road access. Surrounded by mountains, it can be
provide financial assistance to Malaysians of all strata to participate
reached only by a one-hour flight from Miri or Marudi in northern
in and utilise ICT. In essence, the Demonstrator Application Grant
Sarawak. Mail takes something like two weeks to reach the
Scheme (DAGS) helps fledging organisations and even non-profit
highlands and there are certainly no newspapers, with the
making organisations make use of ICT to disseminate information,
exception of a few copies occasionally sent up from Miri.
keep people connected, and also to support their businesses. There
are at the moment more than 42 recipients of the grant, who use
The village is inhabited by a small population of indigenous Kelabits,
it for a wide range of projects, from biodiversity investment to
living in 12 long houses. Until a year ago, Bario did not even
nature watching, agriculture, forensic sciences and health.
have telephones. Until today, in the absence of any power plant,
the people use generators supplied by the Government to provide
One of these projects called e-Bario, has been successful and
electricity to the lone school in the village, the police station and
impressive that it has won international recognition and acclaim.
other public facilities, but only for a few hours a day, as diesel is
e-Bario, is a special “Internet Access for Remote Communities”
expensive. Lack of public utilities that many of us take for
pilot project undertaken by Telekom Malaysia with the collaboration
granted, and especially that of communications, has been the
of Universiti Malaysia Sarawak (UNIMAS), the Canadian International
biggest handicap to development in Bario.
Development Research Council (IDRC), NITC, MIMOS Bhd., the
Sarawak Government and the Bario community itself.
The village, in many ways, was perfect for any initiative to
provide connectivity to a remote location. Its isolation and the
The project has in effect connected Bario, an isolated village in
fact that the terrain presented many difficulties to the construction
the highlands of Sarawak, to the rest of the world and paved the
of infrastructure made it even more attractive as a challenge,
way for the native Kelabit villagers to embark on a journey of
especially to Telekom Malaysia.
discovery and development, which until recently has been denied
them, simply because of their remote location. Already, certain
Under the e-Bario project, Internet access is provided to generator-
foreign diplomats who have visited the area to inspect the project
powered PCs via a Telekom Malaysia solar-powered VSAT satellite
have shown interest in promoting it as a tourist destination
system specially installed for this purpose. To pull a cable to such
among their nationals.
a remote and difficult terrain would have been problematic, if not
impossible, and would have taken a very long time and at
exorbitant cost. Thus, the project team decided instead to provide
telecommunications access via a satellite network and systems.
100
After several technical site visits, new generation VSAT equipment
e-Bario is perhaps the only successful project of its kind in the
was chosen to provide connectivity of up to 2Mbps. With this
world. Because of its highly innovative nature, e-Bario won a
high bandwidth connectivity, the Bario community has access to
2002 Industry Innovators Award.
high-speed Internet and high-bandwidth applications. In addition,
this new generation VSAT is run by a solar panel, providing
For Telekom Malaysia, aside from the international recognition
24-hour power supply that is not dependent on the village’s
gained for its contribution to progress in the communications
restricted electricity supply.
industry, the success of e-Bario is something the company is
proud of for many reasons. Firstly, through the project, Telekom
The project started with a technical site visit to Bario to study
Malaysia has played its role as a caring corporate citizen in
whether VSAT would be a suitable solution, both for a quick fix
improving the lives of a small and hitherto neglected community.
and in the long term. The visit was also to investigate if there
Secondly, e-Bario proves that the digital divide can be bridged.
were any existing facilities that could support VSAT, to find the
And, thirdly, given the dedication and perseverance of the villagers
most suitable location to place the antenna and other VSAT
themselves in seeing the project through, it provides great hope
equipment; and to determine any potential constraints or problems
in the country’s ability to develop pockets of e-communities that
in installing the VSAT system.
might eventually merge into one all-encompassing e-nation.
After this technical reconnaissance, it was decided that VSAT
Before e-Bario, there already existed a number of e-communities
would indeed be the most practical solution but while it was
that unite groups of people either through common interests,
being set up, two sets of INMARSAT terminals would also be
common goals or even simply through living in common
installed as an interim measure. These were configured and
neighbourhoods. But with this special project, Telekom Malaysia
commissioned on 4 August 2000. One set is at the house of the
has helped create the first e-community of indigenous people
penghulu, or village head, for use as a telephone, and the other
who can now embrace information and communication technology
is in the school principal’s office, used as a telephone as well as
in their daily lives and interactions to improve their quality of life
to access the Internet and e-mail.
in very significant ways.
Today, the VSAT system is up and roaming, proving that ICT can
be implemented in any location, anywhere in the world, even in
the remotest areas lacking the most basic facilities. Life in Bario
has improved because there is hope for development. Even in
their day-to-day existence, there has been dramatic change
brought about by the ability of simply being able to communicate
with friends and family outside the village. Payphones that are
connected to the TM VSAT System have been installed. These
phones, the Internet and computing technology will continue to
make a big difference in the way the villagers communicate with
the outside world.
101
Expanding
G l o b a l Ve n t u r e s
We are spanning continents
From Asia to Africa
We are enabling communications
Where there were none before
We are creating smart partnerships
And fostering strategic alliances
We are a citizen of the world
Inculcating peace, sharing prosperity
By expanding global ventures
operations review
International
Operations
- TM International Sdn. Bhd.
MANAGEMENT
TM International Sdn. Bhd.
CHRISTIAN MANUEL DE FARIA
In line with Telekom Malaysia’s vision of becoming a global communications
player, TM International Sdn. Bhd. (TMI), a wholly owned subsidiary is the
vehicle used to oversee and manage its foreign ventures. Initially, these
international ventures were under the administration of International
Venture Division (IVD) of Telekom Malaysia.
Telekom Malaysia’s overseas investments contributed approximately 13% to the Group’s profit after tax in the financial year ended
31 December 2002. Profit after tax contribution stood at RM137 million, as compared to RM79 million registered in the previous year.
This represents an increase of approximately 73% in profit contribution to Telekom Malaysia from the previous financial year. As at end of
2002, TMI’s foreign cellular subscriber base from its international investments in South Africa, Guinea, Malawi, Bangladesh, Sri Lanka and
Cambodia has exceeded 7 million.
104
TMI enjoys strategic support from four divisions, namely the Human Resource
Strategy and Management Division, the Technical Services Support Division,
the Financial Control Division and the Strategic Business Management and
Analysis Division. This support has enabled TMI to adopt a holistic approach
in seeking viable international ventures, and subsequently managing them
to create shareholders’ value for Telekom Malaysia.
With the establishment of TMI, Telekom Malaysia is assured of
MTN NETWORKS (PRIVATE) LIMITED (MTN)
effective management of its international investments, thus
Telekom Malaysia’s first international investment was in Sri Lanka
maintaining high standards of operations and management in the
in 1995, where a wholly-owned subsidiary MTN Networks (Pvt)
interest of value creation for the Group.
Limited (MTN) was set up to provide GSM cellular services
utilising the 900MHz frequency band. The licensing agreement
To date, Telekom Malaysia has investments in South Africa, Guinea
was awarded by the Government of Sri Lanka for a period of
and Malawi in the African continent. Nearer in the region are
18 years until the year 2013. In year 2002, MTN obtained the
Bangladesh, Sri Lanka, Cambodia and Thailand. Having gained
international roaming license, which will enhance the revenue
valuable experience in managing overseas operations, Telekom
base of the Company. Despite intense competition in the Sri
Malaysia will seek more feasible ventures on a selective basis to
Lanka cellular market, MTN managed to emerge as the leading
generate a higher level of business growth and profitability for the
cellular company with a subscriber base of 485,006 at the end of
Group.
year 2002. This represents a growth of 81% in terms of its
cellular subscriber base as compared to the previous year.
During the year 2002, the Company undertook a restructuring
exercise to consolidate all the other international ventures under
Moving forward, MTN plans to increase its capital investments to
TMI. Upon completion of the exercise, the value of TMI’s capital
expand and increase the existing network coverage and capacity.
will be enhanced.
This will allow MTN to provide a higher level of call quality to its
present and future customers. MTN will continue to enhance its
products and services and adopt effective marketing strategies to
grow its customer base in the future.
Forging closer global links.
105
operations review
TM INTERNATIONAL BANGLADESH LIMITED
(TMIB)
TM International Bangladesh Limited (TMIB) was set up in 1997
as a joint venture company between AK Khan & Co. Ltd. (a
leading Bangladesh Business Group) and Telekom Malaysia. TMIB
Close business networking with our international partners.
was granted a 15-year licence, renewable annually thereafter, to
develop and operate GSM cellular services in Bangladesh.
The year 2002 witnessed TMIB embarking on an aggressive
network expansion programme to increase its network capacity to
accommodate an ever growing customer base. The 100%
increase in its cellular subscribers to 161,265 as at end of 2002,
is the consequence of its network expansion and the continuing
strong demand for cellular services in Bangladesh. Given the
success of its expansion programme in the year 2002 and the
large market potential, TMIB will continue to grow in terms of
network capacity and subscriber base in the future in order to
create value to the shareholders.
TELEKOM NETWORKS MALAWI LIMITED (TNM)
Telekom Malaysia formed a joint venture company with the
Government-owned Malawi Telecommunications Ltd. (MTL) in
1996 to operate GSM cellular services until year 2016. Telekom
Malaysia and MTL hold 60% and 40% stakes respectively in TNM.
TNM is yet another success story for Telekom Malaysia as the
company is currently the leader in the cellular market in Malawi.
TNM experienced a 61% increase in cellular subscriber base to
46,800 as at the end of 2002 thus maintaining its current position
as the dominant cellular player. The volatility of the local currency,
however, continue to impact the financial performance of the
with a 60% share of the cellular market. By end of year 2002, the
total subscriber base for cellular was 71,000 representing an
increase of 103% compared to the previous year, while fixed
subscribers stood at 22,550.
Sotelgui s.a. has implemented an improved credit management and
collection system to strengthen its working capital management.
The Company will continue to implement its network expansion
plans that will result in an increase in network capacity and coverage
to meet a growing market and enhance revenue generation.
CAMBODIA SAMART COMMUNICATIONS
CO. LTD. (CASACOM)
Cambodia Samart Communications Co. Ltd. (Casacom) began its
commercial operations in 1999, with Telekom Malaysia holding a
51% stake and the remaining 49% being held by Samart Corporation
Public Company Ltd. (“SAMART”), a Thai communications company.
Casacom was awarded a licence to provide and operate GSM
NMT 900 cellular services for 35 years and is currently the
second largest cellular operator in Cambodia.
In the year 2002, Casacom was granted an international roaming
licence in addition to its domestic cellular services.
company. While the cellular market in Malawi is growing with the
entry of new players, TNM is in a strong position to rise above
the competition, and is expected to maintain its leadership
position by adopting effective customer retention and better cost
management strategies.
SAMART CORPORATION PUBLIC COMPANY
LTD. (SAMART)
Telekom Malaysia has a 19.73% stake in the public-listed Samart
Corporation Public Company Ltd. (SAMART), which provides a
wide range of value-added telecommunication services. Including
SOCIETE DES TELECOMMUNICATIONS DE
GUINEE (SOTELGUI s.a.)
In West Africa, Telekom Malaysia has formed a strategic
partnership with the Government of Guinea (GOS) to form Societe
Des Telecommunications De Guinee (Sotelgui s.a.). Telekom
Malaysia holds a 60% equity in Sotelgui s.a. while the GOG owns
the remaining 40%. Currently, Sotelgui s.a. is the market leader,
106
the manufacturing and distribution of telecommunications
equipment such as TV antennas and satellite dishes in Thailand.
SAMART is undergoing a debt restructuring exercise to better
manage its debt level. The management of SAMART is committed
to this exercise and will adopt appropriate measures to improve
the Company’s performance and strengthen its balance sheet.
TELKOM SA LIMITED (TSA)
TSA was awarded a five-year exclusive licence to provide public
Telekom Malaysia’s largest foreign investment is in South Africa,
switched telecommunication services (PSTS) in South Africa
where it has a 12% effective holding in Telkom SA Limited (TSA)
which lapsed in 2002. During the year 2002, TSA underwent an
via Thintana, a partnership between Telekom Malaysia and South
expansion exercise, which saw an improvement in the call quality
Western Bell Corp (SBC Communications Inc. of the United
of its cellular services. The Company has plans to increase its
States). TSA also owns 50% of Vodacom Group Proprietary Ltd.
competitiveness and to increase and grow its current customer
(“Vodacom”), the dominant cellular operator in South Africa with
base of over 5 million. The Initial Public Offering (IPO) of TSA
approximately 6 million customers.
took place successfully on 4 March 2003.
In line with TMI’s endeavour to remain competitive in the international
market, the Company will focus on various programmes to enhance
management efficiency. In this context, TMI is embarking on a restructuring
exercise to enhance capital and tax efficiency, improve management
processes and introduce more efficient internal procedures and practices
for better business control.
In the coming financial year, the Company will continue to focus
Economically feasible international investments will continue to be
on further strengthening the financial performance of the current
an integral business component for Telekom Malaysia, with the
international ventures and seek new investments on a selective
primary aim of increasing shareholder value. TMI is committed
basis with primary focus on creating shareholders’ value. The
in ensuring the long-term sustainability of these investments.
latter will be in the form of viable international investments
In the ensuing year, the company will give emphasis on risk
through partnerships, strategic alliances or joint ventures. Priority
management, economic expansion and process re-engineering to
will be given to potential investments which have attractive
generate efficiency and higher financial performance. The
business growth and economic fundamentals and proximity to
development of strategic economic resources, especially human
Malaysia.
resources, will also be a key initiative. TMI anticipates that
investment in strategic human resource development will provide
TMI will seek selective new markets abroad with teledensity
enduring benefits to the international investments.
below the average levels in the ASEAN and South Asian region.
Potential new markets include those in Indonesia, Myanmar,
TMI is gearing up to capitalise on the growing global
Cambodia and Vietnam in South East Asia and India, Pakistan,
telecommunications market in the year 2003. With the completion
Afghanistan, Iran, Bangladesh, Nepal and Sri Lanka in the South
of the restructuring of TMI, the company is poised to expand its
Asian region.
foreign investments with greater confidence and contribute further
to the financial performance of the Group.
Our core focus in the international market would be on the
provision of cellular and value-added services. In addition, TMI
will also capitalise on the opportunities created by new business
segments, such as data networks, internet and content-based
services.
107
Maintaining
Operational Efficiency
From the simple telephone
To state-of-the-art devices
Being functional is critical
For business or pleasure
Operational efficiency is imperative
For prosperity to prosper
By maintaining operational efficiency
operations
review
Facilities
TM Facilities Sdn. Bhd. was set up in January 2002 to manage Telekom
Malaysia’s five Strategic Business Units (SBUs) – Malaysian Logistics,
Malaysian Security, Facilities Management & Infrastructure Development
(FMID), Property Development, and Fleet Management – each of which
has its niche area of expertise.
In the year 2002, TM Facilities managed revenue from internal and external sources totalling RM349.3 million. This is the first year the
SBUs have been profitable. Notable achievement to the financial performance of the SBUs was the decrease in total costs by 17.1% over
the previous year, a reduction of RM60.5 million.
110
MANAGEMENT
TM Facilities Sdn. Bhd.
HAMZAH YACOB
Management
- TM Facilities
Sdn. Bhd.
MALAYSIAN LOGISTICS
MALAYSIAN SECURITY
Malaysian Logistics is involved principally in the provision of
A competent and reliable security force is essential to any large
logistics and related support services to Telekom Malaysia.
organisation. In Telekom Malaysia, this function is taken care of
Its activities consist mainly of warehousing, distribution and
by Malaysian Security, which safeguards the Group’s assets,
transportation, freight forwarding management and scrap
resources and personnel.
management. Currently, Malaysian Logistics has a network of 35
warehouses spanning East and West Malaysia – from Kangar, in
Its primary activities include the provision of armed and unarmed
Perlis, to Tawau, in Sabah.
guards for high-risk areas such as business outlets, collection
centres and government gazetted key installation points.
Its freight forwarding services cover the Group’s free-on-board
(FOB) freight movements into and out of East Malaysia. Meanwhile,
Malaysian Security also provides value-added services such as
inland distribution within Peninsular Malaysia and Sabah and
security for cash-in-transit, night vaulting, and patrolling of optical
Sarawak is taken care of by a sizeable fleet of trucks which handle
fiber routes, overhead and underground cables. Other specialised
the needs of the entire Group.
services offered include security audits, investigations into fraud or
theft and the implementation of security awareness and preventive
Beyond providing in-house logistics services, Malaysian Logistics
programmes.
also extends its quality service to external parties to generate
additional income. For example, over the past few years, Malaysian
In its endeavour to reduce overhead costs, especially in the area
Logistics has assisted Shell Gas in managing its central LPG
of outsourcing, efforts were made during the year to introduce
storage facilities in Prai, Malacca and Kuantan (Semambu). For
remote surveillance systems which could be managed from a
the year under reporting Malaysian Logistics has completed the
centralised control unit, hence reducing the need for security
newest facility in Alor Setar meant for Shell Gas installation.
personnel on-site.
111
operations review
FACILITIES MANAGEMENT & INFRASTRUCTURE
DEVELOPMENT (FMID)
FMID sees to the management of Telekom Malaysia’s facilities and
buildings. It provides electrical, mechanical, and civil engineering
services as well as commercial building maintenance services to
the Group.
During the year, various functions were outsourced to third party
operators. Hence, there was a need to monitor these operators
closely to ensure quality of service and cost efficiency. In 2002,
the unit focused on reviewing non-profitable outsource arrangements
and on providing relevant training to equip employees with the
skills needed to do the job themselves.
Given the outlook for TM Telco, its main customer, the number
PROPERTY DEVELOPMENT
of projects and developments in the near future is expected to
The unit is responsible for the management of TM TelCo’s
decrease. On that note, the Property Development unit has to
infrastructure projects and the development of Telekom Malaysia’s
diversify its resources and the focus for the year ahead shall be
land bank. The unit is divided into two areas – the project
to add value to the development of the Group’s land bank.
management and consultancy unit handles infrastructure projects,
while the commercial unit manages the Group’s commercial
Property Development’s maiden project in 2002 was a land
developments.
development project in Mukim Ijok and Jeram, both in Selangor.
The project, undertaken with an established property developer,
covers an area of 550 acres and is expected to complete in 2006.
The unit also acts as ‘custodian’ to all Telekom Malaysia’s
documents pertaining to its assets, which includes liaison with
State-of-the-art control centre at Menara Telekom.
land and state authorities, collection of rental, and managing
payments of leased rentals, quit rents and assessment fees.
FLEET MANAGEMENT
As its name implies, the Fleet Management unit looks after the
Group’s fleet of 7,000 vehicles. Principal activities include vehicle
maintenance and repair, licensing and permits, insurance and
claims as well as the purchase of new vehicles and sale of scrap
vehicles.
In 2002, efforts were directed towards the improvement of vehicle
maintenance and upgrading of the fleet. A sum of RM25 million
had been spent for the purchase of new utility vehicles and
saloon cars, with the emphasis on replacing vehicles exceeding
seven years old.
112
Telekom Malaysia’s modern
fleet of vehicles.
During the year, Fleet Management successfully installed custom-designed vehicles for the optical fiber group, to facilitate the maintenance
of fiber optic routes. The company also managed to secure revenue of RM3.4 million from the sale of scrap vehicles.
In 2002, Fleet Management, signed a contract worth RM52 million with Petronas, Shell and ExxonMobil on behalf of Telekom Malaysia, to
supply petroleum and petroleum related products for Telekom Malaysia’s vehicles. The contract is for a period of five years.
With the activation of TM Facilities under the new management, the direction
for the year ahead will be to identify opportunities and roll-out business
models. These will serve to propel the five SBUs towards becoming fullfledged individual business entities with the view of further enhancing
shareholder value.
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operations review
Implementation of
Box
Article
ELECTRONIC GOVERNMENT
IN MALAYSIA (EG*NET)
In this age of connectivity, being open and connected applies not
WHAT IS THE ELECTRONIC GOVERNMENT?
only to corporations and individuals but also governments. One of
The Electronic Government is a multimedia networked paperless
the best ways for government agencies and departments to be
administration linking government agencies within Putrajaya, the
connected to each other as well as to the people is via multimedia.
new administrative centre, with government centres around the
country to facilitate a collaborative government and efficient
Recognising this, the Malaysian government has embarked on a
service to the business community and the average citizen. The
mission to create a leadership that applies multimedia technology
vision of an Electronic Government is one in which the Government,
to its benefit. The vision is that of a highly efficient Electronic
the corporate sector and the public could work together for the
Government that is able to provide information and services to
benefit of the nation. This vision calls for the application of
those who need it in the most readily available and accessible
information and multimedia technologies to improve productivity
manner. The Electronic Government is one of the seven flagship
and increase the number of delivery channels of the Civil Service.
applications of the Multimedia Super Corridor (MSC).
While the Electronic Government is itself an MSC application, its
The MSC was established in 1996 as the Government’s gateway
success will not only reinvent the management of the country by
to the exciting information age by tapping into the full potential
making it more efficient, but will also nudge all the other MSC
of information technology and multimedia. Its main objective was
projects forward.
to spearhead economic development as the nation moves towards
achieving Vision 2020. The Civil Service’s active involvement in
It is envisaged that the Electronic Government will cover
the planning and implementation of most of the MSC flagship
24 Federal ministries, 126 Federal departments, 78 Federal
applications, have not only spurred further development of the
statutory bodies, 245 state departments, 109 state statutory
MSC, but have also contributed towards the growth of a new
bodies, 144 local governments, 950,000 employees, 400,000
multimedia sector, which holds tremendous potential to enhance
corporations, 1.6 million proprietors and 22 million citizens.
the country’s competitive edge.
Part of the Electronic Government is the provision of e-services.
The Electronic Government is just one of the four MSC flagship
The main objective is to make government services easier to
applications being managed by the Civil Service. The others are:
access through multiple electronic delivery channels such as
the Smart School, Multipurpose Card and Telehealth. In addition,
kiosks, Interactive Voice Response (IVR) systems, the Internet
there are three non-Civil Service-controlled flagship applications
(via web TV and PCs) and one-stop service windows. In addition,
in the Multimedia Super Corridor, namely the R&D Cluster,
e-services will mean faster services that are also more reliable,
Worldwide Manufacturing Web and Borderless Marketing.
transparent and secure.
Among the services that will be offered electronically are the
issuance and renewal of driving licences and road tax, vehicle
registration, payment of Road Transport Department summonses,
utility payments and access to on-line information from the
Ministry of Health.
114
E-Services forms one of seven pilot projects under the Electronic
the Electronic Government Steering Committee comprising
Government banner, the others being: Electronic Procurement,
Government officials led by the Malaysian Administrative
Generic Office Environment, Human Resources Management
Modernisation and Management Planning Unit (MAMPU),
Information System, Project Monitoring System, Electronic
representatives from the Multimedia Development Corporation,
Labour Exchange and E-Syariah.
leading private sector multimedia/IT companies and consultants
from McKinsey & Company.
1.
e-Services
e-Services will enable the public to conduct transactions
6.
e-Syariah
more easily with the Government and utility companies.
The e-Syariah system has been built with the objective of
With the one-stop service window provided by the Electronic
improving the overall efficiency and decision-making process
Government, it will be possible to go to a kiosk in a
of the Malaysian Syariah Courts. At its core is the case
shopping mall or use the PC at home to renew your driving
management system that assures the timely and just
licence and pay your electricity bill.
disposition of cases. In addition, links to relevant agencies
such as Jabatan Kemajuan Islam Malaysia (JAKIM), Polis
2.
e-Procurement (EP)
DiRaja Malaysia (PDRM), Jabatan Imigresen Malaysia,
Electronic Procurement will automate, reengineer and
Bahagian Hal Ehwal Undang-Undang (BHEUU) and Jabatan
transform the current procurement system to cut costs and
Pendaftaran Negara (JPN), the library system, lawyer
create faster turnaround time, enabling the Government to
registration and portal together with the office automation
become a “smart buyer”. Suppliers, large and small, will
and networking efforts will all help create a cyber world for
also benefit from greater transparency in the new system by
Syariah court officials. The e-Syariah system will benefit the
receiving faster and more accurate payments.
court administrators, judges, lawyers and their clients in
different ways.
3.
Generic Office Environment (GOE)
The Generic Office Environment (GOE) is a multimedia
With a consolidated database of clients collected from
environment that provides the common components required
district courts across the country, administrators are supplied
to accommodate a variety of business functions. The GOE
with a rich source of data on people and cases, for timely
consists of a number of building blocks that can be combined
decisions.
in a variety of ways to meet different business needs, or to
construct more sophisticated functional components. In the
Equipped with productivity tools like calendaring, scheduling
pilot application, the GOE will be customised to suit the
and an inheritance (faraid) calculator, judges can now
specific business needs of the Prime Minister’s Office. The
process their cases swiftly. They can also access on-line
GOE is capable of being customised to suit the business
reference material like law databases, the Al Quran, Hadith,
needs of other departments within the Government, as well
Fatwa, etc.
as being capable of evolving to support future business needs.
The system integrates the processes seamlessly and
4.
Human Resources Management Information System
delivers more efficient services to lawyers. Clients, meanwhile,
(HRMIS)
will benefit as they will see shorter queues outside the
The Human Resources Management Information System
courtrooms and at counters across the nation. In addition,
(HRMIS) will provide a single interface for Government
they can conduct some of their court work on the Internet.
employees to perform HRM functions effectively and
efficiently in an integrated environment.
The concept of Electronic Government rests on putting in place
an integrated communications network to facilitate the efficient
5.
Project Monitoring System (PMS)
flow of information among Government agencies, and between
The Project Monitoring System (PMS) is designed to
the Government and the people. This would benefit both the
provide a mechanism for monitoring the implementation of
Government and the public by making its operations faster and
Government projects. The service also provides a platform
smoother through quicker access to Government information and
for exchanging ideas and demonstrating best practice
services.
models in information management and communication
services. An initial set of priority pilots has been selected by
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operations review
Implementation of
Box
Article
ELECTRONIC GOVERNMENT
IN MALAYSIA (EG*NET)
For it to work, it is imperative that the network used is both highly accessible and secure. The Government Integrated Telecommunications
Network (GITN) was established with the primary aim of providing the most practical, effective and safe IT infrastructure for the delivery
of multimedia information and services within the Government and to the public.
Operational Model
Technical Model
Business Model
Multiple service
delivery channels
Home PC
Corporate
PC
Kiosk
Interactive
TV
Phone and
Fax
Service Provider:
Many service providers
competing over
multiple channels for
transaction revenue
Internet
Single window of
government
Public
Domain
Gateway
Financial
Network
Proxy Server
Gateway Provider:
One or a few
Integrators building
gateways to link legacy
systems, competing for
transactions
Firewall
Multiple back office
processes
Government
Domain
Financial Domain
GITN
Goverment:
Government maintains
ownership of service
processes and
backoffice systems
The idea of setting up GITN was first conceptualised in 1993 and
Area Network dedicated to connecting the various Government
approved by the Government in 1995. As seen in the model
agencies.
above, GITN plays a major role within the Electronic Government.
Positioned in the Government domain, its role is to link government
The objectives of EG*Net are:
systems and processes into a common network, which becomes
•
a “single window to the Government”, linking all aspects of the
Government into a single entity that can be accessed by businesses
platform supporting inter and intra agency communications
•
and citizens throughout Malaysia and the world.
The GITN infrastructure is implemented, managed and operated
of services to citizens and business organisations
•
established an integrated communications and computing
Network and the broadband IPVPN Network to form a secured
Government Intranet. This is the foundation of EG*Net, a Wide
116
To provide all Gateway Providers/Procurement Service Providers
access to Government systems and databases for the delivery
by GITN Sdn. Bhd. (GSB), which has been a wholly-owned
infrastructure consisting of a high-speed nationwide Frame Relay
To provide a standardised and secured Government platform
for connectivity to ensure a reliable and integrated approach
•
subsidiary of Telekom Malaysia since February 2002. GSB has
To provide an integrated network infrastructure and common
To provide a secured gateway for all government agencies to
connect to the Internet
•
To provide end-to-end managed services with a “Service
Window” for enquiries and problems
This diagram illustrates EG*Net and its interconnection with
Telekom Malaysia network at Putrajaya. The connectivity
between Putrajaya Campus Network and EG*Net is
established through the 2 Mbps
EG*Net, with its wide area connectivity for inter and intra
Procurement
Service Provider
government communication, and capability to access the Internet,
is critical in ensuring the success of the Electronic Government.
EG*Net also supports citizen-to-Government and business-toGovernment communication by providing managed connectivity to
Internet
Procurement
Service
Provider
Gateway
Internet
Gateway
Internet
Gateway
Putrajaya-EG* Net Link
Government
Sites
Gateway Providers and Procurement Service Providers respectively
through a secure network gateway.
Government
Sites
The network is proactively managed end-to-end, with central help
EG* Net
Nationwide Network
EG Applications
(eServices, aProcurement,
GOE, HRMIS, PMS<
ELX)
Financial
Institutions
Government
Sites
desk facilities, on-line and on-site technical support. The security
Putrajaya
Campus
Network
framework within EG*Net is based on protection needs in terms
Government
Sites
of integrity, confidentiality and availability of information. EG*Net
Gateway
Providers
Service
Providers
firewalls located at strategic sites, are remotely managed by GSB.
HOW IT WORKS
In the technical model of GITN in the Electronic Government, the
public domain refers to the front-end of the Electronic Government.
The model has an open architecture based on the Internet, which
allows Service Providers to develop a wide variety of delivery
channels to provide Electronic Government services in the public
domain, thereby increasing public access throughout the country.
The Government domain refers to the back-end of the technical
model which houses the Government’s or utility organisation’s
back office IT systems, database and network, containing citizen
and business data. The financial domain refers to the financial
institutions’ back office IT systems, database and networks. Service
Providers must establish communication routes between the
public domain and the financial domain for online payments.
Security mechanisms, such as firewall, must be in place to provide
secured and authorised communication between the domains.
PUBLIC KEY INFRASTRUCTURE
The implementation of policies to secure all resources in the
Electronic Government is managed by an overall security framework.
This framework includes, but is not limited to, application level
security measures as follows:
1.
Authentication
2.
Encryption
3.
Digital Signatures
There are variations in implementing the above measures. However,
there is a need to deploy security measures that are consistent and
widely available while also being transparent and portable. With this
in mind, the Electronic Government will use systems and methods
that are public in nature vis-a-vis the Public Key Infrastructure
(PKI) for the implementation of security in Authentication,
Encryption and Digital Signatures. High-level security e-transcations
within e-Perolehan, ESPKB and e-Syariah are secured through the
electronic use of PKI-enabled digital cerificates.
Asynchronous Transfer Mode (ATM) technology is being used for
applications within Putrajaya, as these require a high bandwidth.
Currently the Government rents 155 Mbps leased line connections
from Telekom Malaysia for its 2.5 Gigabits Synchronised Digital
Hierarchy Campus Network. The ATM switch nodes are linked to
the nationwide GITN high-speed IPVPN Network.
GSB AS THE REGISTRATION AUTHORITY
(RA) FOR THE GOVERNMENT
Digicert Sdn. Bhd. has been appointed as the first licensed
Certification Authority (CA) for the Public Key Infrastructure (PKI)
implementation in Malaysia. GSB, meanwhile, is one of Digicert's
appointed Registration Authorities (RA). As a RA operating
specifically within the public sector, GSB will function in the
following areas:
•
Authenticate at site all Government employees
•
Register the employees’ data into the Local Certificate
Management
•
Distribute Digital Certificates to Government employees
•
Revoke these certificates as and when necessary
117
Enabling
Efficiency
Have meetings without meeting
Meet face-to-face
Without being face-to-face
Minimising travel, maximising time
Optimising returns, minimising expense
Enhancing corporate communications
With the latest in video-conferencing
By enabling efficiency
operations review
Other Subsidiaries
VADS BERHAD
were used primarily to upgrade VADS’ current network infrastructure
VADS Berhad (VADS) is in the business of providing managed
to support the Company’s new product offering, VADS PREMIER
network services (MNS) and application solutions to Malaysia
– the next generation MNS business Internet Protocol (IP) services.
corporate. In line with growing customer demand, VADS has also
begun providing managed e-services and e-solutions, which are
VADS PREMIER will provide a much more efficient means of
complementary to its core business.
transmitting voice and data applications. This innovative product
will enable customers to prioritise different Internet Protocol
applications such as operational systems, customer relationship
RM148.9 million, which represents a growth of 20% as compared
management, supply chain management, voice, email and the
to the previous year’s revenue of RM124.3 million. Profit after tax
Internet. VADS PREMIER is an innovation to ensure that VADS’
also registered a hefty increase of 41% to RM10.3 million for the
customers are offered enhanced services to enable them to
remain competitive in the marketplace.
Despite a tough market environment, VADS achieved various
To ensure the efficiency of its network and completeness of its
notable milestones on the back of continued business growth.
solutions, VADS has also teamed up with recognised global
The Company enjoys the distinction of being the first Telekom
organisations such as AT&T, Cisco Systems, IBM Corporation,
Malaysia subsidiary to be listed on the Kuala Lumpur Stock
Microsoft and Onyx Corporation in the provision of customised
Exchange. In conjunction with the listing on 7 August 2002, there
solutions for its customers. These strategic partnerships allow
was a public issue of 40 million ordinary shares of RM1 each at
VADS to widen its range of solutions and competitiveness in the
an issue price of RM2.10 per share. The proceeds from the listing
MNS market.
120
In the year under review, VADS registered a record turnover of
To wrap up the year, VADS also received the ISO 9001:9002
Quality Management Systems certification in December 2002.
Being awarded the prestigious ISO certification demonstrates
VADS’ commitment to deliver continuing quality service to its
customers and ensures the Company is well-positioned for the
challenges in a more liberalised and competitive operating
environment.
FIBERAIL SDN. BHD.
Fiberail Sdn. Bhd. (Fiberail) was formed in 1992 as a joint venture
(JV) company between Telekom Malaysia and Keretapi Tanah
Melayu Berhad (KTMB). The JV company was awarded the
licence to provide telecommunication network related services
utilising a fibre optic cable network along the railway corridor.
The fibre optic cable network spans about 1,600 km connecting
all the major towns in Peninsular Malaysia.
Fiberail’s core products and services include flexible leased fibre
optic packages, broadband services and total business solutions.
The Company also offers ancillary services such as
telecommunication tower space and equipment cabin space.
Fiberail – Malaysia’s premier carrier-neutral wholesale network provider.
Value-added services such as consultancy services and colocation services have also been introduced to cater for customer
demand in various industries.
year. The reduction in pre-tax profit was primarily attributable to
To meet the increasing demand of its existing customers, Fiberail
lower turnover outweighing lower operating expenses. After
embarked on implementing a second cable network that is able to
provision for taxation was made, the Company registered a profit
provide diversity to the existing cable, increase service availability
after tax of RM15.71 million, a 4% decrease from the previous
and reduce the restoration time for any network disruptions.
financial year.
Fiberail is also the Project Consultant for the Electrified Double
Year 2003 will see Fiberail continuing in its efforts to realise its
Track Project between Rawang and Ipoh, which involves the
vision of becoming Malaysia’s premier carrier-neutral wholesale
relocation of fibre optic cables from their existing location to a
network provider. Fiberail earns substantial revenue from its
permanent location. The project is expected to complete by the
existing network, but is expected to further expand its portfolio of
end of year 2003.
bandwidth services with the provision of advanced Internet
services, data transport and advanced data services, and virtual
Fiberail is proud to have received the ISO 9001:2000 Quality
private networks.
Management System certification, which is a testimony of its
commitment to meeting strict quality requirements. The Company
As more and more customers realise the cost-effectiveness of
continues to upgrade the quality of service and to enhance its
outsourcing end-to-end network solutions, there would be a wider
products and services to meet customer demands and expectations.
market for value-added services such as co-location and managed
hosting facilities. Fiberail will continue to look for strategic
For the financial year under review, Fiberail achieved a profit
partnerships and alliances with other network providers to offer
before tax of RM21.14 million. This represents a decrease of 8.7%
competitive broadband Internet and data services to new and
compared to RM23.16 million recorded in the previous financial
existing markets.
121
operations review
more than RM300 million of IBS-related projects including the
Creating engineering and Information Technology solutions can be
Intelligent Building Package for Menara Telekom and Card Access
as simple or as complex as the business requires and this is
& Close Circuit TV (CCTV) Packages for Telekom Cyberjaya
precisely what Meganet Communications Sdn. Bhd. (Meganet) does.
Complex projects, which were completed in 2002. With a revenue
growth of 33.4%, Meganet’s professional involvement from start
Meganet is an Intelligent Building System (IBS) service provider.
to finish has strengthened its ability to offer its customers wide-
It was formed in July 1997, during the launch of Cyberjaya City,
ranging benefits, including operations and maintenance of on-site
as a joint venture between Telekom Malaysia Berhad and Nippon
building systems.
Telegraph & Telephone Corporation of Japan, which holds a 70%
and 30% stake in the company respectively.
Having already established a firm footing in the IBS niche sector,
Meganet aims to further strengthen its position with a special
Meganet’s areas of expertise cover IBS Consultancy, IBS Engineering
focus on providing IBS elements to bigger market segments in
and IBS Operations & Maintenance Support. Among the intelligent
the country. Meganet’s corporate culture, which encourages
components offered by the company are the Integrated Building
continuous improvement, promises a bright and prosperous
Management System (IBMS), Building Automation System, Security
future for the company.
Management System, Multimedia Audio Visual System, and IT
Infrastructure (Networking & Structured Cabling System).
Meganet also provides value-added services such as Network
Telekom Sales & Services Sdn. Bhd. (TSSSB) is a customer
Management Systems, Intelligent Building Electrical Systems
service organisation that focuses on the provision of one-stop
(iBES), IT Migration, Application Development, Township Services,
solutions for Telekom Malaysia. With a total work force of 1,271
Wireless LAN Services and Car Parking Systems.
employees, TSSSB serves approximately 2.6 million customers
and more than 200 corporate organisations.
While growing from strength to strength, the fiscal year 2002
presented its fair share of challenges. During the first half, the
Currently, TSSSB has 94 ISO-certified Kedai Telekom outlets
global economy experienced a downturn, yet Meganet braved the
nationwide, which serve as the primary channel that provide
storm, and in fact continued to grow by carrying on with projects
Telekom Malaysia’s services such as service provisioning, bill
outstanding from the year 2001, such as providing an Intelligent
collection and payment, enquiries and bureau services. These
Building System (IBS) for Menara Telekom and the Telekom
outlets also market a wide range of telecommunication products
Malaysia National Operations Centre, with a total value of RM65
and a host of IT products and accessories. In an effort to provide
million. The second half of 2002, however, started out more
better service, plans are underway to open up a few more new
positively than anticipated, with a few non-Telekom projects coming
outlets in strategic locations.
in to supplement Meganet’s core repeat business. These were the
Polytechnic Port Dickson, Polytechnic Sabak Bernam and UiTM
Through its Corporate Sales division, TSSSB provides ICT sales
Seberang Prai, Penang with a total value of over RM15 million.
and solutions to meet the needs of its high-end customers,
namely, corporate, government, major businesses and small and
medium enterprises. The Company also undertakes projects and
provide outstanding business opportunities and excellent intelligent
provides end-to-end professional advice and consultancy services
building services for its clients and business partners. Since
for its high-valued customers – i.e. from the feasibility study and
commencing operations in July 1997, Meganet has completed
proposal stage right up to actual procurement, delivery, installation
122
As the intelligent building industry expands, Meganet strives to
and commissioning of service. In addition, through its Technical
On 23 August 2002, TAB formed a strategic alliance with Jurusan
division the Company also provides after sales and maintenance
Suria Sdn. Bhd. (JSSB) for the development of a fixed line SMS
service contracts to some of its key clients.
(FSMS) solution for Telekom Malaysia. TAB will develop the backend solution while JSSB develops the SMS-enabled fixed
In October 2002, TSSSB entered into an agreement with DRB-
telephone terminal.
Hicom for the appointment of the former to market KOMNAS
personal computers through its Kedai Telekom. This is a
Other projects embarked upon during the year include the
testament of TSSSB’s extensive distribution network, which
deployment of the EezePhone prepaid system, a mobile
further spurs the company in successfully marketing its wide
commerce platform for TMTOUCH; a network management
range of products and services.
system for fibre optics; a network inventory provisioning system;
and a pilot trial for FSMS.
For the year 2003, TSSSB is set to widen its revenue base
particularly in the IT and Multimedia segment. There is an
In 2002, TAB began to pursue a diversification strategy to reduce
abundance of business opportunities in this growing segment,
its dependence on Telekom Malaysia by widening its customer
especially for products such as PCs, servers, printers, and data
base, product line and revenue streams. TAB is currently targeting
equipment. This will be achieved in part, by collaborating with
both the telco and non-telco segments domestically. Several new
strategic business partners in providing customised solutions and
products were developed to meet the demands of non-telco
undertaking major IT projects.
organisations, such as messaging products based on SMS
technology – XpressComm and Virtual SMS. Other applications
include Campus SMS for use by educational institutions; Gateway
services for SMS broadcasting by advertisers; and other premium
Telekom Applied Business Sdn. Bhd. (TAB) made several significant
infoservices e.g. MIDF IPO Query, KLIA Flight Info and SMS
achievements in the year 2002. The most noteworthy was the
Summons Check Point.
prestigious MSC-Asia Pacific ICT Award (MSC-APICTA) on 4 April
2002. TAB’s innovative Virtual Communication Services (VCS)
Over the past few years, TAB has enhanced its ICT competency
received the award for ‘Best Value Added Communication
to develop innovative ICT solutions such as the Eezephone,
Technology’. Developed in-house, the VCS converges the Public
Virtual Communication Services and a Payphone Management
Switched Trunk Network (PSTN), mobile and Internet technologies
System. These solutions were deployed within the Group and can
to provide multi communication services that optimise resources.
be leveraged under TAB’s strategy to reposition itself as an ICT
solution provider to a wider market.
TAB receiving an
award for “Best
Value Added
Communication
Technology” at
the MSC-Asia
Pacific ICT
Award (MSCAPICTA) 2002
Award Night.
123
operations review
Malaysian Yellow Pages, TPSB’s core product, is a directional
media, which is based on classification of products and services
of advertisers. Realising the need to have localised marketing by
advertisers, Neighbourhood directory for three main areas was
made. There are also Malaysian Chinese Yellow Pages, a directional
media, which caters to the Mandarin-speaking community.
Malaysian White Pages contain alphabetical listing of residential
and business telephone lines. Both Yellow Pages and White Pages
are segmented into 10 different regions covering Peninsular
Malaysia, Sabah and Sarawak.
Niche directories are specialised in both content and target
market. Currently there are 7 niche directories, namely, Malaysia
In its quest to be a global ICT player, TAB is targeting countries
Tourist Pages, Malaysia Oil & Gas Directory, Halal Pages,
in which TM International has a strong foothold. Thus far, the
Corporate Agriculture Directory, Dining Out, Alumni Directory and
Company has ventured into various markets in South East Asia
Malaysia Information Industry Directory.
and the Middle East. Marketing TAB’s products abroad in fact
answers the Malaysian Government’s call for local ICT companies
TPSB has extended the reach of the directory. Yellow pages can
to export their homegrown technologies.
be accessed through the Internet at www.yellowpages.com.my
and also through Short Messaging Systems (SMS). Malaysia
The year 2002 has been challenging but filled with opportunities.
Internet Yellow Pages (MIYP) was officially launched in October
Confident in the marketability of its solutions, TAB looks forward
2000 and allows search for information on companies, products
to sustained growth in the coming year, both domestically and
internationally.
Incorporated in August 1989, Telekom Publications Sdn. Bhd.
(TPSB) is the official publisher of the Malaysia Telephone Directories
(White Pages and Yellow pages) both in print and multimedia
format, which have been used by more than 4.9 million users
nationwide.
To undertake the multimedia business, TPSB set up Cybermall
Sdn. Bhd. on 1 January 2002. This wholly-owned subsidiary of
TPSB has been granted full MSC status and is responsible for
intensification of multimedia businesses and accelerating Malaysian
progress in the information age.
TPSB produces the most comprehensive industrial, commercial
and government listing with over 300,000 companies and 18,000
and services. It will be upgraded to allow search for locations and
brands listed. This listing has the most updated contact numbers
directions within major towns in Malaysia. TMTOUCH SMS Yellow
obtained directly from Telekom Malaysia. Currently, TPSB
Pages is a joint venture project with TM Cellular Sdn. Bhd. The
produces more than 50 different directories, which are Yellow
product was launched in August 2002, which allows TMTOUCH
Pages, White Pages and Niche directories.
subscribers to access directory information through SMS, with
the short code 200200.
124
TPSB – the official
publisher of Malaysian
Telephone Directories
has the most updated
contact numbers.
ATM cards. Corporate customers have the added advantage of
being able to download their bills using the Electronic Bill
Presentment (EBPP) module for bulk payment purposes.
Currently, Telekom Malaysia fixed line, TMTOUCH and TM Net
bills as well as several municipalities (in Selangor and Negeri
Sembilan) assessment bills can be paid via the Eazyway kiosk.
TTSB is working on expanding its service to include other utility
and municipality bills.
Transactions via Eazyway can be conducted using MEPS Debit e-pos,
Debit Maestro, Visa Electron and credit cards (Visa and Mastercard).
In the near future, the kiosks will be able to accept MEPS cash, EMV
compliant credit and debit cards as well as MyKad.
During the year, TTSB rolled out several promotional activities
using its Eazyway kiosks. The kiosks was a convenient channel
for Disney fans to purchase tickets for the Disney on Ice skating
show, which was held from 30 April to 4 May 2002.
TTSB also organised the ‘Kijang Emas Gold Bullion Coins’ contest
in conjunction with the acceptance of Majlis Perbandaran Shah
Alam’s assessment bills via Eazyway. Launched in January 2002,
the service benefits over 80,000 residents in Shah Alam. The
winners of the contest were selected from each outlet based on
the highest amount paid in a single payment transaction.
As a member of the Asian Directory Publishers Association Inc.
(ADPAI), TPSB has embarked on cross-selling arrangements with
In an effort to become a one-stop payment center providing
all members of ADPAI. The company is actively involved in cross
convenience to customers TTSB will continue to expand its
selling through the Yellow Pages of the Philippines, Indonesia,
offerings to provide a comprehensive array of services.
Brunei and Myanmar, and will continue to expand.
Telekom Technology Sdn. Bhd. (TTSB), a joint venture company
between Telekom Malaysia and Prism Holdings Ltd. of South
Africa, is a provider of transaction switching services for payment
of bills and purchase of value-added services. The service is
provided via several delivery channels, the first of which is the
kiosk. Besides the kiosk, which is promoted under the “Eazyway”
brandname, TTSB also offers payment convenience via the
Internet and points-of-sale at selected retail outlets.
TTSB has installed and commissioned over 150 Eazyway kiosks
in the Klang Valley and major towns throughout Peninsular
Malaysia. The self-service kiosks enable users to conduct bill
payment transactions and prepaid reloads using credit, debit or
125
operations review
As the world’s fourth tallest telecommunications tower at 421 metres, Menara Kuala Lumpur has carved a name for itself
as one of Malaysia’s premier tourist attractions.
After six years of operations, in December 2002, Menara Kuala Lumpur registered its sixth millionth visitor. Of that number,
international visitors from Asian countries, Europe and the Middle East made up approximately 64% of the total tourist
arrivals at Menara Kuala Lumpur.
For the financial year ended December 2002, Menara Kuala Lumpur registered total operating revenue of RM85.5 million.
The non-sublease revenue was recorded at RM12.9 million, an increase of approximately 16% from the previous year’s
revenue. Ticket sales were the major contributor to this segment at 66%. However, profit before tax decreased
approximately 5% during the period under review to RM46.7 million due to an increase in operating and insurance costs.
As part of the Government’s initiative to portray Malaysia’s rich cultural heritage, Menara Kuala Lumpur organised various
cultural performances and gave special offers on tickets during the recent Citrawarna celebrations, the Mega Sale Carnival
and the Merdeka month celebration. In the year 2002, many other key events were held at Menara Kuala Lumpur. Among
them were:
–
The Kuala Lumpur International Jump held in February 2002, which witnessed 40 jumpers parachuting off Menara
Kuala Lumpur’s open deck at 300 metres above ground.
–
The Junior Towerthon of its annual Kuala Lumpur International Towerthon held in July 2002, which saw the participation
of over 1,000 school children between the ages of 13 and 17.
–
A Royal Visit by Seri Paduka Baginda Yang di-Pertuan Agong Tuanku Syed Sirajuddin Ibni Almarhum Tuanku Syed
Putra Jamalullail and Seri Paduka Baginda Raja Permaisuri Agong Tuanku Fauziah bt. Almarhum Tengku Abdul Rashidin
in September 2002.
–
In October 2002, the inaugural World Championship Tower Run saw participation from nine countries for its stair run
competition. The event was endorsed by the World Federation of Great Towers.
126
Menara Kuala Lumpur was also selected as the venue for the “Welcome Reception” for the 40th Commonwealth
Telecommunications Council Meeting and the Delegates Luncheon for the 44th Majlis Tilawah Al-Quran Peringkat Antarabangsa.
The Tower Souvenir Shoppe opened its doors to business in June 2002. Located on the Observation Deck, the outlet
boasts a wide variety of Menara Kuala Lumpur merchandise. Sales of the merchandise were very encouraging, surpassing
expectations and contributed positively towards the revenue growth of Menara Kuala Lumpur.
To further ensure quality and efficient processes, two initiatives were introduced during the year. The Quality Control Circle
was introduced under the close supervision of the National Productivity Centre and it successfully identified and resolved
various work-related issues that led to increased productivity. In addition, as part of Telekom Malaysia’s Change
Management programme, the “Transformational Change for Performance” was introduced to redefine staff’s strategic role
in achieving the company’s vision of becoming the preferred tourist attraction both locally and internationally.
GITN SDN. BHD.
In October 1995, the Cabinet approved the implementation of a government integrated telecommunications network to
provide network and common services to government agencies, on a privatised basis. GITN Sdn. Bhd. (GSB) was
incorporated in March 1996 – a joint venture between Permodalan Nasional Berhad and Telekom Malaysia to manage the
implementation of the government integration network GITN. On 8 February 2002, GSB became a wholly-owned subsidiary
of Telekom Malaysia.
GSB’s main function is to facilitate the flow of electronic information between government agencies, as well as between
the government and the public. It links existing government systems and processes into a common network which can
then be presented as a “single window of government” to the rest of the nation: the business community as well as
common citizens. As with any electronic network, speed and reliability are essential. But, being concerned with government
information, there is the added need for security within the system that does not allow access to those who are not privy
to such information.
All this is provided for by GSB, with its high-speed network based on frame relay technology. This can be upgraded to
asynchronous transfer mode (ATM) for higher bandwidth, thus enabling it to support greater multimedia applications on
video, audio and data transfer.
This safe, reliable and efficient network provided to the Government is known as EG*Net, a major tool in propelling the nation
towards its paperless, hyper-efficient and information-focused e-Government’s vision. Already, seven e-Government
applications are being deployed using EG*Net, namely: electronic procurement; electronic labour exchange; project monitoring
system; electronic budgeting; electronic Syariah; generic office environment and human resources management information.
Among the other services provided by GSB to the government agencies are Public-Key Cryptography, Digital Signatures &
Certificate, Public Key Infrastructure, Smart Card, Managed Security Services and Business Continuity Planning.
GSB’s ultimate vision is to become a globally competitive and efficient e-Government information communication and
technology solutions provider and be a major growth engine for Malaysia’s K-economy.
127
Accelerating
Developing Minds
Information is key
And knowledge is power
Enablers we are
Connecting schools, colleges and universities
Addressing the needs of the nation
Instilling the benefits of a k-society
With Smart schools, we lay the foundation
With Multimedia University, intellectuals bear testimony
By accelerating developing minds
Educational
Excellence
130
MANAGEMENT
Universiti Telekom Sdn. Bhd.
PROF. GHAUTH JASMON
President
Telekom Research &
Development Sdn. Bhd.
HJ. AHMAD TARMIDI
MOHAMAD
Telekom Malaysia continues to give strong emphasis on education as the
foundation to build a knowledge society to propel the nation towards a challenging
and dynamic new economy. To support its initiative in education, Telekom
Malaysia has established four key entities, namely:
•
Multimedia University (MMU)
•
Telekom Research & Development Sdn. Bhd. (TMR&D)
•
Telekom Smart School Sdn. Bhd. (TSS)
•
Telekom Training College (TTC)
UNIVERSITI TELEKOM SDN. BHD.
Universiti Telekom Sdn. Bhd. was incorporated in June 1997 to manage Multimedia
Telekom Smart School
Sdn. Bhd.
HJ. MUSTOPHA AHMED
Telekom Training College
DATUK IR. AHMAD ZAINI
MOHD AMIN
University (MMU) in response to a mandate given to Telekom Malaysia by the
Ministry of Education to set up the first private university in Malaysia. The university
was formerly known as Universiti Telekom with its campus in Melaka. Subsequently,
in March 1997, Telekom Malaysia was given another enormous task of setting up
a Multimedia University, to be located in the heart of Cyberjaya.
The Multimedia University (MMU) currently operates two campuses, one each in
Cyberjaya and Melaka. The University has 23 Centres of Excellence within seven
faculties in areas such as High Speed Broadband Networking, Virtual Reality &
Computer Graphics, Innovative Education and Multimedia Communications. It also
offers more than 60 courses at Alpha (Foundation), Diploma, Degree and PostGraduate levels on such disciplines as Knowledge Management, Knowledge
Engineering, Knowledge Economics, e-Business and Multimedia Computing.
To spearhead its research in technology and capitalise on global expertise in
various areas of technology, MMU has collaborated with such renowned
transnational organisations as Microsoft, Intel, NTT, Alcatel, Lucent Technologies,
Fujitsu, Motorola, Matsushita, Cisco, Nokia and IBM, to name a few.
131
educational excellence
MMU prides itself in utilising the latest technology and experimenting with innovative methods in the courses it offers. One such initiative
is e-Management, where knowledge sharing is achieved via an Integrated Computerised Education Management System (ICEMS) to promote
a paperless administration. The Multimedia Learning System software which was developed in-house and commercially available, functions
as a support for teaching and learning activities.
In the year 2002, Multimedia University (MMU) recorded an increase of RM17 million in revenue, representing a growth of 17% from
RM103.7 million the previous year. The major contributors to the revenue increase were external collaborations and affiliations as well as
provision of professional consulting services. Its student’s population increased to 14,200 compared to only 1,300 when the university first
opened its doors in 1997. It attracts both local and foreign students from over 40 countries around the world.
In October 2002, MMU jointly launched the Networked Multimedia Education System (NMES) project with the Ministry of Energy,
Communications and Multimedia and the Japan International Cooperation Agency (JICA). JICA provided a grant of RM15 million in the
form of equipment to the project which aims to develop a satellite-based tele-education infrastructure and application to promote interactive
tertiary education in remote locations.
132
As part of Telekom Malaysia’s initiative to reach out to the nation
through the provision of ICT education, MMU introduced the
Bachelor of e-Business as part of its Internet-based distance
learning in December 2002.
MMU is continuously reviewing trends and opportunities in the
ICT industry which are reflected through the introduction of new
and advanced courses. Several new programmes, such as the
Bachelor of IT in Virtual Reality and Artificial Intelligence, are
awaiting accreditation by the Ministry of Education. To further
reach out to the nation, MMU is planning to expand its Internetbased distance learning programme to include a Diploma in IT.
All new programmes introduced by MMU take into consideration
the requirements of the industry, ensuring that knowledge
acquired by graduates will be relevant in the workplace.
Forging ahead on the R&D front.
TELEKOM RESEARCH &
DEVELOPMENT SDN. BHD. (TMR&D)
TMR&D was formed as a forefront outfit for research activities for Telekom Malaysia. TMR&D currently has 140 researchers the majority
of whom are holders of first degree in various disciplines of technology.
With the highly competitive environment of telecommunication business, Telekom Malaysia has placed great emphasis on the need for
innovative and quality research products that could be rolled out as services to the public.
In view of this pressing need, TMR&D has embarked on programmes that provide researchers with the opportunity to obtain Masters and
Doctorate degrees.
In late 2002, TMR&D introduced a Postgraduate Study Scheme (PSS) which would enable researchers to pursue Masters or PhD education
by way of research on a part-time basis at local institutions and universities. One of the advantages of this programme is that staff member
under the PSS holders are able to obtain their postgraduate degrees while completing their research projects.
TELEKOM SMART SCHOOL SDN. BHD. (TSS)
Telekom Smart School Sdn. Bhd. (TSS) was set up in 1999 to incorporate advanced technology-based teaching and learning processes to
the existing national education system.
On this front, TSS collaborated with seven local firms and three multinationals to implement the Malaysian Smart School Pilot Project – a
flagship application within the Multimedia Super Corridor. The project involved over 1,000 skilled IT professionals and over 81 small and
medium-sized enterprises in Malaysia. TSS received the Final Systems Acceptance (FSA) Certification from the Ministry of Education in
December 2002, marking the successful completion of the pilot project. Some of the achievements by the Malaysian Smart School Pilot Project
include:
•
The development of 1,494 courseware titles
•
The development of Malaysia’s first Integrated Computerised Smart School Management System
•
The setting up of 87 Malaysian Pilot Smart Schools
•
Training of over 60 staff from the Ministry of Education, who have been seconded to TSS
133
educational excellence
In July 2002, TSS achieved another commendable milestone with
the receipt of a licensing agreement from the Ministry of
Education for a 50-year copyright to market the Smart School
concept within and outside Malaysia. TSS is currently focusing on
marketing the Smart School Integrated Solution (SSIS) to
government schools and private institutions.
The National Smart School Pilot Project was a RM300 million
contract with the Ministry of Education, which ended in December
2002. Another two projects with the Ministry of Education, the
Maths and Science Translation Project and the Help Desk
Extension Project, are valued at RM8 million and RM3.65 million
respectively. Both are expected to be completed by the 3rd
Quarter of 2003.
Following the successful completion of the Malaysian Smart
School Pilot Project, TSS has been conferred the coveted title of
being Malaysia’s Multimedia Education Systems Provider. TSS is
now ready to seek opportunities within secondary markets such
as the Government or private sector within and outside Malaysia.
In its menu of services are Consultancy, Project Management,
Technology Infrastructure Management, Systems Management,
Operations Management and Change Management.
Using its experience gained during the roll-out of the Smart
School Pilot project, TSS is now working closely with the
Government to ensure that the SSIS is successfully deployed in
schools around Malaysia. Further investments will be made in
research and development to enhance the current product and to
adopt new technology to be incorporated into the education
system. TSS will expand its existing products to include
e-learning (online education) and web-based education.
Backed by solid experience and skilled IT professionals within
TSS, the Smart School concept can be adapted and enhanced for
individual markets within Asia and the Middle East. To spearhead
this initiative, TSS is in the process of exploring means to
customise the current Smart School infrastructure to meet the
needs of different countries. TSS is also looking at establishing
strategic partnerships with local and international companies to
Smart School in session.
134
meet future demands for Multimedia Education Systems overseas.
TELEKOM TRAINING
COLLEGE (TTC)
Apart from training Telekom Malaysia employees, TTC provides
The Telekom Training College (TTC) in Kuala Lumpur was first
services in Training Needs Analysis, Balanced Score Card,
established by the then Jabatan Telekom Malaysia in 1948. The
ISO 9000 and IT & Systems Design.
training to external bodies such as corporate customers, suppliers
and government personnel. TTC also provides external consultancy
objective is to provide its employees with adequate training to
develop the necessary skills and competencies. TTC received its
Several courses under e-learning which are conducted and
“college” status from the Ministry of Education in 1995. TTC
administered via the Internet have also been introduced. These
currently has over 390 staff inclusive of those in 5 other Telekom
include courses in Information Technology, Desktop Computing,
Training Colleges or branch campuses in Taiping, Kuala
Management, Technical and Telecommunications.
Terengganu, Malacca, Kuching and Kota Kinabalu. All premises
are equipped with state-of-the-art facilities, which include video
In 2002, TTC’s operating revenue comprised training revenue
conferencing facilities and digital libraries.
(69%) followed by education (16%) and other income (15%).
TTC has been operating as a private institution of higher learning
In recognition of its commitment to quality and its contribution to
(IPTS) since the year 2000, at par with some of the best educational
education in telecommunication, TTC was granted MS ISO
and technical colleges in Malaysia. TTC offers a wide range of
9001:2000 certification from SIRIM in 2002 and was appointed as
specialist courses under its diploma programmes to meet the
the sole Certifying Agency for the Malaysian telecommunications
requirements of our knowledge-based economy. These include:-
industry by the Malaysian Communication and Multimedia
1.
Diploma in Multimedia (Business & Computing)
Commission.
2.
Diploma in Multimedia Technology
3.
Diploma in Technology (Telecommunication Engineering)
TTC has embarked on a mission to provide the higest quality of
4.
Diploma in Computer Science
educational and training programmes to meet the country’s
5.
Diploma in Marketing
current and future needs. A growing number of trainees from all
6.
Diploma in Accounting
over the globe are discovering the benefits of attending TTC
7.
Diploma in Administrative Management
courses as a necessary and integral part of their career development.
8.
Diploma in Marketing with Multimedia
TTC aims to be a world-class institution for telecommunications
9.
Diploma in Management with Multimedia
education, contributing to the nation’s progress towards its
envisioned k-economy.
TTC also offers certificate programmes in Web Mastering, ICT,
Computer Programming and Training and Development.
In its quest to provide quality education to a wider audience,
TTC has linked up with international institutions such as the
Curtin University of Technology in Australia, the Universities
of Portsmouth, Staffordshire and De Monfort in the UK. Locally,
TTC has also established ties with Universiti Multimedia,
Quality training at TTC.
Universiti Malaysia Sarawak, Universiti Utara Malaysia and
Universiti Terbuka Malaysia.
Currently TTC conducts over 2,500 courses, seminars and
workshops on technical, management, IT and multimedia related
subjects, attended by over 40,000 local and international
participants every year.
135
Human resource
INTRODUCTION
In line with Telekom Malaysia’s vision to be the Communications Company
of Choice and its mission to be the employer of choice, the Human Resource
(HR) Division adopted and executed several strategic thrusts during the
year with the aim of creating a more agile workforce, reducing the total cost
of employment so as to create value to Telekom Malaysia’s Human Capital.
This is in line with the objective of optimising service delivery; reducing cycle
times; and increasing cost effectiveness by standardising and consolidating
end-to-end HR processes.
HR strategies and initiatives were streamlined to support and
enhance the business performance of the Group. HR
functionalities were focused on the principles of customer
service excellence, high standards of product and service
quality and correlation to the organisation’s key performance
measures. This is inspired by our Internal Core Values
principles philosophy which emphasise on total commitment
to our customers, uncompromising integrity and driven by a
genuine concern to respect and care. These core values form
the basis for the mindset paradigm shift among the employees.
In facing the onslaught of an increasingly demanding
operating environment, the most challenging human resource
strategy will be in trying to forge a team of quality and
service driven employees.
HR strategies and intiatives were streamlined to enhance the business performance of
the Group.
In a move towards being a truly service-oriented entity, one
major initiative is to adopt the Shared Service Organisation
model, which will see human resource functions becoming
more focused on an integrated, quality-based operational and transactional services. Workforce planning is continuously undertaken to
ensure that the relevant competencies and skills were put in place to meet organisational goals and business needs.
In another initiative, Performance Consequence Management (PCM), was introduced as a management tool to effectively track employee
performance against business strategies, targets and action plans.
PCM was employed to provide a systematic management of a fair and proper performance appraisal. The ultimate aim of this management
tool is to maximise Company resources and improving productivity. Through PCM, employees who have performed well are given due
reward while employees with unsatisfactory performance are managed in accordance with established industrial practice and rehabilitated
through counselling, coaching and mentoring.
136
An online 360 Degree Feedback system, which is a holistic
This reduction in number of employees has helped to reduce total
performance appraisal system was also developed. This feedback
employment cost for the Group while improving employee
system helps to address the sensitivity of performance appraisal.
productivity and revenue per Direct Exchange Line (DEL). The
It serves to evaluate and provide feedback on the performance of
Company will continue to strive towards improving productivity
the Company’s executives from an all round perspective i.e. from
and reduce its manpower number to 27,983 for the year 2003.
superiors, peers, subordinates and even the customers. The 360
Degree Feedback system helps to eliminate the inherent
HR’s emphasis on building a strategic leadership and enhancing
weaknesses of a conventional appraisal system such as middle
the knowledge and skills of top management was initiated via an
rating and different value judgements.
Organisational Development and Advisory Services program. The
leadership training and development programs for the Company’s
As in other industries, deregulation has changed the business
top 200 Key Talents continued through the Company’s customised
environment in which the Company operates. The move to a
Executive Development programs. A total of RM10.6 million was
deregulated market place has created unprecedented competition,
invested in human resource development for the year 2002.
both for business and management talent.
As part of its contribution to society’s development and continuous
Telekom Malaysia faces growing pressure to drive performance,
learning environment, Telekom Malaysia has invested a total of
grow and diversify quickly and efficiently, integrate acquisition
RM45.5 million in scholarships and loans via the Company’s
targets and deliver better shareholder value to the external
Scholarship Foundation. To date, the Company has sponsored a
marketplace. Many of these business challenges are not new and
total of 2,789 students in pursuing their education abroad and
will become increasingly predominant in an era where creation,
locally. Out of this, 841 of the sponsored students have been
and indeed the preservation of shareholder value cannot be
recruited into the Company.
compromised.
The need to build and sustain greater market share translates to
In line with the Human Resource Development Act 1992, the
the need for a sales force that can support this business goal. In
Company contributes towards the training and development fund
line with change, the Company requires the Right Culture, Right
levy by the Government. The Company, which is one of the major
Skills and Talent Mix. It also necessitates different competencies,
contributors to the fund, allocates approximately RM6 million per
supported by innovative, flexible and relevant human resource
year towards this.
processes. In order to support the new shift, the introduction and
integration of broad banding into HR processes such as
In fulfilling its social obligation, the Company also participated in
compensation, talent management and career management are
the National Economic Action Council (NEAC) programme in
critical.
providing practical training to degree and diploma holders during
the year. This was an initiative to provide skills and training for
With a total Group staff strength of 29,800 at year end, right-
graduates and diploma holders during the current economic
sizing and right-skilling continue to become a major objective in
slowdown. Through this programme, the affected individuals were
optimising productivity and revenue per employee. To achieve
equipped with skills and work experience that increased their
this, the company offered a Voluntary Separation Scheme (VSS)
employability and mobility. Hence, prospective employers would
during the year, which was accepted by 1,763 employees.
get employees who are skilled and more productive.
137
Customer Relationship Management (CRM) has been generally described
as the tool and process of acquiring, satisfying, retaining and growing
profitable customers. It is about understanding, delivering and exceeding
customer expectations. To achieve business goals, CRM requires a
customer-centric philosophy and culture to support effective markets, sales
and service processes.
A true CRM programme manages the total end-to-end customer related process for an organisation, optimising marketing strategies across
multiple channels throughout the organisation.
As Telekom Malaysia goes through the transformation process towards becoming the communications company of choice, our main thrust
is to maintain value for the customers. The implementation of the full CRM initiatives is aimed at the realisation of long-term benefits for
the customers and the Company.
CUSTOMER
RELATIONSHIP
Management
TELEKOM MALAYSIA CRM ROAD MAP
Telekom Malaysia jointly conducted a CRM Roadmap study with an external consultant team in April 2002. The model of the study is
summarised in the following diagram:
CRM as an iterative and evolutionary process across the 25 core areas
Un
Customers Segmentation
Behaviour Analysis
Profitability Analysis
Customer Profiling
Credit Worthiness
mers
& C u sto
kets
r
a
dM
Know
tan
s
r
de
Explore
Service
Loyalty Programs
Retention Programs
Service Force Effectiveness
Contact Center
Problem Management
Trouble Management
Re
tai
Enjoy
nC
u sto
me
D eve
THE
CUSTOMER
EXPERIENCE
Sell
rs
Find
lop
Offe
rin
g
Campaign Management
Channel Management
Target Market Identification
Product Management
Product Configuration
Flexible Billing
Target
Buy
us
re C
A c q ui
to m
ers
Customers Segmentation
Partner Management
Business Shops
Marketing Programs
Sales Force Management
Order Processing
Tele-Sales
Internet Sales
The As-Is assessment evaluated Telekom Malaysia’s capabilities in each of the 25 core areas
138
Telekom Malaysia offers a wide range of products to complement its telephone service.
The study conducted an extensive review of the current Telekom
Brief description of the initiatives that are currently under Stage 1,
Malaysia’s CRM capabilities, as well as assessing the gaps between
are as follows:
the “as-is” and the “should-be” required to become a Best In
Class Communication Company. A full-fledged CRM programme
1.
CUSTOMER SEGMENTATION, LOYALTY AND RETENTION
in Telekom Malaysia Group was launched by the Chief Executive
To enhance our customer profiles and demands, we need to
on 2 September 2002. An initial group of fifty personnel from TM
explore key opportunities in stimulating more marketing and
TelCo, TM Cellular Sdn. Bhd., TM Net Sdn. Bhd. and other
customer service programmes. The Customer Segmentation
subsidiaries were selected to plan, design and execute the
team has embarked on an exercise to align the current
initiatives contained in the CRM Road Map. Eight project teams
segmentation strategy to improve the market share in terms
have been formed to address a wide scope of customer sales &
of customer acquisition and retention.
service areas, assisted by internal and external subject matter
experts. The internal consultants from the Change Management
Office served as project facilitators.
2.
PRODUCT & CHANNEL MANAGEMENT
To address the gaps in the existing marketing and channel
management, the CRM Team has designed a new strategy
The four core areas, Know, Target, Service and Sell are being
and programme to improve the efficiency and effectiveness
translated into areas of benefits. The CRM Roadmap provides the
of partner management. The main objective is to enhance
framework for the execution of the areas of benefits or core CRM
channel capabilities to serve the customers better through
functions focussing on strategy, people, process and technology.
effective up-selling/cross-selling, online order entry, bill
payment collection and post-sales support.
CURRENT CRM INITIATIVES
The current CRM initiatives cover Stage 1 of the CRM Roadmap
which focus on establishing the foundation. Broadly, Stage 1
deals with issues like developing the right products, right marketing
and sales approach, knowing the customer and build loyal
customer base and provide quality service over multiple channels.
The Product Development Team is responsible for
streamlining and improving the speed to market the
products. The Product Quality and Management Team are
tasked with enforcing a rigorous and measurable product
life cycle and product processes to enhance product
profitability and product commercialisation.
Once the foundation stage is completed, the next initiative would
focus on delivering the customer experience. The final stage
would be realising the vision of becoming a totally customer
centric organisation.
139
customer relationship management
The speed and quality of Customer Network Operation has
improved particularly in the provision of service and
restoration for Telekom Malaysia customers. The overall
installation of fixed lines within 24 hours has achieved 97%,
while the overall restoration for fixed lines within 24 hours
has reached 86%. 97.8% of calls answered at the Customer
Care Centre are within 10 seconds.
The SMART (Sistem Maklumat Aduan dan Resolusi
Telekom) system to monitor customer complaint was
upgraded with more features and functions. Complaints can
Complaints are handled more efficiently with the new enhanced SMART system.
3.
SALES FORCE EFFECTIVENESS
Sales automation programmes are being introduced to allow
sales personnel to focus their efforts on building relationships
with their customers. In addition, the Sales Force Effectiveness
Team is working to equip the sales team with better selling
skills, IT sales support tools and to devise an incentive
scheme for the sales force.
4.
SERVICE FORCE MANAGEMENT
CRM teams are entrusted to improve frontline customer
service. The primary objectives of the programme is to
ensure total customer satisfaction in enjoying the services
provided by all Telekom Malaysia’s channels. End-to-end
process on service provisioning; fault restoration and
customer contact are being developed with the introduction
of an improved automated management system.
5.
RELATED CUSTOMER SERVICE IMPROVEMENT PROGRAMME
Many other customer service programmes have been
undertaken by the Company at the operational level to
improve the level of service throughout 2002. The short-term
programmes were initiated to support the Company objectives
of becoming the communication company of choice.
The enhancement of the Public Emergency Response
System (PERS) was commissioned in Kuantan. The PERS
999 is equipped with the caller number identification and
voice recording system, enabling identification of crank
callers. This reduced the number of crank calls in the areas
covered during the pilot trial.
140
now be tracked and resolved within one to seven days via
In 2002, Kedai Telekom embarked on comprehensive
the SMART system anywhere, anytime by the service
customer service improvement initiatives. All the 94 outlets
personnel. The average duration to resolve the complaints
have been awarded the ISO 9001 certification. On 18 October
on billing disputes for the year was within 12 days.
2002, Kedai Telekom Shah Alam received the “Anugerah
TM Payphone has improved on the serviceability and image
of its public telephones. The overall serviceability
nationwide was 77%. A total of 19,500 outdoor payphone
booths have been refurbished and restored during the year.
Prestasi Cemerlang” for excellent service under the “Anugerah
Kualiti Menteri Tenaga, Komunikasi dan Multimedia”. The
payment collection system has been upgraded to improve the
speed of payment transactions and the update of customer
accounts. Twenty-five Kedai Telekom were upgraded with
improved overall Kedai amenities and facilities, providing
comfort and appeal to our customers. For the main Kedai
Telekom, the service hours have been extended including
Saturdays and Sundays to provide greater convenience and
accessibility to customers and general public.
TMTOUCH has initiated the welcoming message for roaming
customers. Auto-reconnection service for customers upon
the settlement of outstanding payment was also installed
and implemented. High usage and selected customers were
offered gifts for the festive seasons; free 64k Sim cards,
birthday cards, free IDD subscription, payment through
Telecare Centre via credit cards and personalised customer
service. Service at the Telecare Centres has been extended
to 24 hours since December 2002.
TM Net Customer Interaction Centre (CIC) has implemented a
programme that provides different levels of customer service
to different segments. This programme has enabled TM Net
CIC to achieve a global service support centre practices
(SCP). Customer Interaction Centre has achieved the average
of 80% of incoming enquiries during office hours.
Ninety-four Kedai Telekom
nationwide to serve 4.59
million customers.
141
Risk
Management
Telekom Malaysia is committed to a risk-based system
of internal controls designed to provide reasonable
assurance in achieving the Group’s business objectives
while safeguarding and enhancing shareholders’
investment and the Company’s assets.
The risk management approach will be conducted through an
integrated framework and programme to be implemented
across the Group. This programme will allow for the
Board
of
Directors
systematic and proactive identification of threats to resources,
and at the same time encourage the development of
appropriate strategies to minimise risks.
Enterprise Risk Management Policy
Board Audit Committee
In view of the size and the diversity of operating units within
Task Force For
Best Practice
the Group, the risk management programme will be managed
by various committees using manuals and a controlled self-
Risk Management
Committee
Group Internal Audit
assessment methodology. The structure of key committees
involved in providing direction, implementation and
Risk Management Facilitation & Implementation
monitoring the risk management programme is illustrated
Group Chief Risk Officer
below:
Operating Unit Risk
Liaison Officer
Operating Unit Risk
Liaison Officer
Operating Unit Risk
Liaison Officer
Enterprise Risk Management Process
1. Establish Context
2. Define Objectives
3. Identify Risks
Monitor
and
review
6. Risk
Response
4. Analyse
Risks
5. Assess
Risks
Risk Control & Reporting Platform
Policies &
Guidelines
142
Management
Committees
Risk Reporting &
Monitoring Tools
External Auditors
•
BOARD AUDIT COMMITTEE (BAC)
The BAC will support the oversight function of the Board. Its main responsibility will be to identify principal risks and ensure the
implementation of appropriate systems to manage these. It must understand the principal risks affecting all companies within the
Group, and recognise that business decisions require risk-taking. The relevant processes and systems to monitor and manage these
risks will be put in place to ensure a balance between risk-taking and internal controls.
•
GROUP INTERNAL AUDIT DIVISION
The Group Internal Audit Division will promote risk management through the facilitation of Enterprise Risk Management (ERM)
workshops, and by assisting the management in identifying, assessing and formulating response plans to manage risks. Internal
auditors will perform independent evaluation of the effectiveness of the risk management systems of the Group and all companies
within the Group.
•
TASK FORCE FOR BEST PRACTICES (TFBP)
The Task Force for Best Practices (TFBP) will comprise the Group Chief Financial Officer, Group Chief Auditor, Chief Financial Officer
TM TelCo and the Company Secretary. TFBP will be responsible for monitoring, tracking and reviewing the implementation of ERM by
the Telekom Malaysia management. Essentially, it will review the operating companies’ risk profiles, response plans and the acceptability
of risk-taking. It will review reports and summaries of aggregated risks produced by the Chief Risk Officer (CRO), and table these to
the BAC.
•
RISK MANAGEMENT COMMITTEE (RMC)
The Risk Management Committee (RMC), headed by the CRO and will consist of the Risk Liaison officer from major business units
and operating companies, will coordinate the enterprise risk management (ERM) for the Group. The RMC will formulate enterprise-wide
risk management programmes and action plans, identify principal risks of the organisation and report its activities to the TFBP, which
in turn will report regularly to the Board Audit Committee. The CRO will maintain appropriate systems and records, inventory of risk
profiles and response plans, including follow-up mechanisms to ensure the effectiveness of the risk management systems, of the Group
and all companies within the Group.
•
OPERATING COMPANY
The management of the operating company is responsible and accountable for the following:
•
establishing clear business objectives, identifying, analysing, assessing significant risks and formulating risk strategies
•
developing risk management standards and practices in the areas for which they are accountable
•
ensuring these practices are fully communicated to and have the active support of all employees
•
ensuring systematic and regular identification and analysis of loss exposures
•
designing, operating and monitoring a sound system of internal control
•
ensuring a risk-based approach is adopted in internal controls and embedded in all business processes
PRINCIPAL RISKS AND RISK RESPONSES
The following describes major risk areas the Group is exposed to, and which could materially affect the business, turnover, profits, assets,
liquidity, capital resources, and the reputation and control measures that have been put in place.
•
Strategic risks
•
Operational risks
•
System risks
•
Compliance risks
•
Financial risks
143
risk management
•
STRATEGIC RISKS
The Automated Document Factory (ADF) has been adopted as
A strategic risk is the potential loss, financial or other
a measure to automate the entire billing production factory
damages such as dissatisfied shareholders, poor business
from capturing data input to output delivery integration. The
partners, loss of key customers, adverse government policies,
establishment of an integrated finance and accounts systems
poor product quality from suppliers, loss of reputation,
using an e-finance platform, inter-linking marketing related
increased competition between telco operators and ineffective
activity through e-marketing, is now in progress as part of
monitoring/measurement of Group performance.
the risk response plan to minimise potential revenue loss
caused by billing related risks.
Recognising Telekom Malaysia’s exposure to such risks,
several high-level management committees have been given
the task of reviewing these exposures periodically, preparing
•
Compliance risk is the potential loss, financial or other
risk response plans and updating the Board regularly on results.
damages arising from the failure to adhere to any law or
Shareholders are kept abreast of the Group’s performance via
regulatory requirement applicable to the Company, including
periodic analyst briefings, conferences and road-shows, while
KLSE listing requirements and the Malaysian Code on
customer satisfaction is monitored through The Customer
Corporate Governance. Recognising the significant impact of
Relationship programme in place since year 2001.
•
the risk exposure to the organisation, a Task Force for Best
Practices (TFBP) was formed to ensure issues of compliance
OPERATIONAL RISKS
with statutory requirements are monitored regularly. The
An operational risk is the potential loss, financial or other
Corporate Regulatory Division and Company Secretary’s
damages arising from operational inefficiency as a result of
Office are key agents in assisting the TFBP manage such risk
ineffective marketing strategies, poor network management,
exposure.
obsolete technology or damage to revenue generating assets
due to an accident or act of God.
FINANCIAL RISKS
Financial risk is the potential loss arising from financial
infrastructure, one of the Group’s major tasks is to ensure the
transactions that include poor investment control; poor credit
seamless availability of telecommunications services. Towards
control procedures; the inability to generate funds for
this end, it has set up National Network Operation Centres to
business expansion; adverse movements in interest rates and
monitor operations and perform 24-hour “health-checks” on
foreign currency exchange; the inability to maintain sufficient
the networks. This minimises service interruptions and
liquid assets to meet financial commitments; and financial
hastens service restoration. In-built protection and diversity
criminal breach of trust. These risks are managed periodically
have been routinely embedded in the telecommunication
through various committees, aided by policies and guidelines.
The business and financial transactions of the Group are
To preserve revenue and minimise the risk of its leakage,
guided by the Business Process Manual, outlining policies on
especially due to telecommunications fraud, a dedicated fraud
business plans, the budget, capital and management
management division has been established within the TelCo
expenditures, revenue, investment in subsidiaries, financial
and cellular operations.
administration, audit, waste prevention and others.
SYSTEM RISKS
Being the company with the largest electronic-based assets,
the Group has to manage all risks associated with
information technology. In this respect, the IT masterplan was
drawn up to address six core areas – security; networks;
applications; desktop, e-mail, internet and intranet; software
assets management; and business continuity. The IT business
continuity programme was part of the Enterprise Business
Continuity Platform (EBCP) project.
144
•
Being the backbone of the nation’s telecommunications
systems during the planning and implementation stages.
•
COMPLIANCE RISKS
The Budget Committee reviews and decides on the Group’s
budget allocation, including its cash-flow position, equity
injection and loans to subsidiaries, operating expenses and
capital expenditure performance.
RESEARCHand
DEVELOPMENT
With the onset of global competition and increased challenges in the
market, there is an urgent need to enhance innovative capabilities and the
quality of products and services to remain competitive. With that, Telekom
Research & Development Sdn. Bhd. (TMR&D) was set up to undertake
activities related to technology innovation as well as the enhancement of
processes and services for Telekom Malaysia.
145
research and development
TMR&D currently has 140 researchers, grouped into units based on individual skills and competencies. The four main areas of research
are:
•
Network and Wireless Technology
•
Applications and Security Technology
•
Material and Device Technology
•
Modelling and Simulation Technology
Two research task forces were formed to look into the technical and research strategies of Telekom Malaysia’s future business operations.
TASK FORCES
Next Generation Network
(NGN) Task Force
3G Task Force
•
Identify key research areas for a third generation
•
Identify key research areas in the wider technology area of NGN
wireless system
•
Develop test-beds where new systems and solutions can be
•
Identify 3G research strategies for Telekom Malaysia
•
Formulate technological and product roadmaps for
Telekom Malaysia
tested with confidence
•
Formulate an optimised integrated wireline and wireless solution
for Telekom Malaysia’s future business
Three units have been set up to support the research and development activities of TMR&D, namely:
•
Marketing & Business Development – Responsible for gathering technological information and the management of intellectual property
rights (IPR)
•
Engineering and IT Support – Involved in calibration, prototyping and IT support functions
•
Financial, Administration, Human Resource and Legal Unit – to perform business support functions.
In late 2002, TMR&D introduced a Postgraduate Study Scheme (PSS) with the aim of providing an opportunity for candidates to pursue
Masters or PhD education by way of research on a part-time basis at local institutions.
TMR&D’s researchers also participated in meetings and discussions on national projects among which, were the MIGHT Photonic Project
and Intensified Research For Priority Areas (IRPA) Projects.
146
TMR&D successfully developed two technological innovations – the Intelligent
Building Management System (IBMS) and Door Access System (ID Secure) for
the Telekom Complex in Cyberjaya. IBMS was conceptualised on the platform of
providing a productive and cost-effective environment through the optimisation of
systems, services and management, and the interrelationships between them.
In recognition of its commitment to quality, TMR&D received SIRIM's ISO
9001:2000 certification in November 2002. A total of 11 Customer Satisfaction
Surveys (CSS) were also carried out as part of the company’s quality
improvement initiatives. Year 2002 also saw the launch of TMR&D’s Research
Journal, documenting research initiatives and technological innovations.
TMR&D achieved a remarkable 48% increase in revenue to RM39.7 million for the
period ending 31 December 2002, compared to RM26.9 million the previous
financial year. Its consultancy arm meanwhile also registered higher contributions
at RM6.4 million.
In line with its existing research activities, several research collaborations are in
the pipeline with nine local universities and the Malaysia Institute for Nuclear
Technology Research. TMR&D is confident that its research and development
activities will provide Telekom Malaysia with an edge to lead the industry with new
and enhanced products, services and processes.
TMR&D – formulating an optimised integrated
wireline and wireless solution for future
businesses.
147
Environment,
occupationalSAFETY
and healthinitiatives
148
Safety and health in the work environment, a priority for
Telekom Malaysia.
Safety in the workplace is of utmost importance and remained a key focus to
Telekom Malaysia. As part of our continuing efforts to improve the overall
safety standards, Telekom Malaysia has come up with a comprehensive OSH
Manual containing guidelines on safety at work which serve to avoid mishaps
as well as manage unavoidable hazards. The manual is divided into sections
applicable to customers, suppliers, contractors as well as workers. The OSH
Manual was a key contributing factor that tipped the scales in Telekom
Malaysia’s favour in the final audit by DOSH Malaysia for the National Awards
Program 2002.
In compliance with internal and statutory requirements, the manual also includes Accident Reporting & Investigation Procedures to make the staff
more aware of the importance of reporting accidents and near-misses.
149
environment, occupational safety and health initiatives
Telekom Malaysia was rewarded for its consistent efforts to improve
Act 1994 stipulates that any company with more than 40 staff needs
occupational safety and health standards when its Pulau Pinang
to have a safety and health committee, Telekom Malaysia has an
branch received the National Occupational Safety and Health Award
hierarchy of committees, starting with the premise/building committees
2002 in October. The Award is given out annually by the Department
which come under the individual state committees which in turn
of Occupational Safety and Health (DOSH), Ministry of Human
reports to the main committee.
Resources, to promote safety standards in organisations locally.
Among the criteria used to determine the recipient of the award are:
As a result of its impressive health and safety standards, DOSH has
•
the existence of a company Safety and Health Policy statement
also requested that Telekom Malaysia be a “mentor” in guiding and
•
the existence of an effective and efficient Safety and Health
Committee
•
•
sharing its knowledge and expertise to small and medium industries
(SMIs) in the area of occupational safety and health. Having accepted
this two-year role, Telekom Malaysia’s duties include assisting SMIs
the establishment of a good Safety and Health Management
develop and maintain their own health and safety measures by first
System
identifying the particular risks and hazards that they face, and then
having a relatively low number of accidents, with no fatalities, in
conducting a suitable training programme for the staff of the company.
the given year
Telekom Malaysia has already acted as a mentor and role model
This was the first national OSH award received by Telekom Malaysia,
to Ramly Food processing Sdn. Bhd. under its Mentor and Good
although the Group has always laid strong emphasis on the safety of
Neighbourhood programme.
its employees. For example, while the Occupational Safety and Health
150
In this regard, the company therefore appointed a team of specialists
from the Malaysia Institute of Nuclear Technology (MINT) to conduct
a study on non-ionizing radiation exposure at three hill stations,
in Genting Highlands, Gunung Serapi in Sarawak, and Bukit Keratong
in Sabah.
The study was carried out using electric and magnetic field probes
based on established measurement standards and protocols which
are recommended and adopted internationally. The study found that the
radiofrequency and microwave radiation present in the areas around
the premises of Telekom Malaysia’s communications and broadcast
stations vary from location to location. Even so, the average strengths
of electric and magnetic fields at all locations were within acceptable
limits for workers and members of the public as stipulated in the
national communication guidelines adopted by the Malaysian
Communication and Multimedia Commission (MCMC) (JTM’s
Guidelines) and recommendations made by the International
Committee on Non-Ionizing Radiation Protection (ICNIRP).
Based on these findings, Telekom Malaysia is of the view that the
presence of the communications and broadcast antennas at hill
stations do not cause any dangerous increase in level of radiofrequency
or microwave radiation, and pose no danger to the health of workers
at these sites. This opinion is based on current knowledge and available
scientific evidence, which suggest that such low radiation levels do
not cause any adverse health effects.
On a more macroscopic level, Telekom Malaysia is working towards
In addition to its mentoring responsibilities, Telekom Malaysia was
also asked by DOSH to represent the telecommunications industry in
the drafting of a Code of Practice – Safe Working in Confined Spaces,
which was launched by the Minister of Human Resources last year.
This is the first code of practice ever produced by the Government
addressing health and safety issues in confined working spaces, such
as manholes. Potential hazards particular to such conditions include
lack of oxygen, high levels of toxic gases, and explosions due to the
introduction of naked flames in the vicinity of flammable gases.
replacing the halon gas used in its fire protection systems in telephone
exchanges in compliance with WHO guidelines which prohibit the use
of halon because of its toxicity. This is aimed towards reducing
environmental pollution and ozone layer depletion. Telekom Malaysia
has allocated a substantial amount of resources to replace the halon
gas fire protection system with approved environment-friendly,
chlorofluorocarbon (CFC)-free, alternatives. This will be done in stages
and the entire effort is targeted for completion by early 2005.
Telekom Malaysia believes that this would contribute towards a safer,
healthier and more sustainable environment for mankind.
It was indeed an honour for Telekom Malaysia, together with other
key industrial players, to be part of the National Technical Committee
set up to develop such an essential code of practice.
Telekom Malaysia is committed not only to the well-being of its
employees, but also, as a caring corporate entity, is concerned about
the well-being of the nation, and indeed the world, as a whole.
A major area of concern for Telekom Malaysia’s Safety and Health
Committee was the exposure of its workers at hill stations throughout
Malaysia to non-ionizing radiation, namely microwave and
radiofrequency radiation.
151
Contributing
To T h e N a t i o n
We are the nation’s engine of growth
Enhancing the lives of all Malaysians
Fulfilling our obligations
As a responsible corporate citizen
We are bridging the divide
From communications to donations
Where our children and their children
Will benefit from a brighter tomorrow
By contributing to the nation
OURcontributions to the
NATION
Telekom Malaysia Berhad is not only the nation’s leading communications
provider. It is also a loyal partner to the country’s development and progress.
While its focus has always been, and remains, the provision of the most
up-to-date communications services, Telekom Malaysia also takes its
social and community responsibilities seriously.
Indeed Telekom Malaysia’s heightened sense of social responsibility can be explained in part by the nature of its business. While, the
country has developed to a level that it no longer has to worry about providing basic amenities to the people, it was not that long ago
when cars were a novelty as were telephones, while computers and mobiles were virtually unheard of. In those days, only about 50 years
or so ago, the provision of fixed line telephones to homes and businesses was in some ways one of the social services – it served to
increase the nation’s quality of life, and created the possibility of progress. Without the convenience of communication, there is limited
scope for development.
Today, telecommunications, like the nation, has reached great heights of development. Telekom Malaysia’s services are no longer confined
to providing the basics. Rather, they serve to enhance the already efficient and sophisticated system and processes, build on what has
already been achieved in order to accelerate even further the nation’s transition into a globalised era.
154
Yet, the sense of providing for the community remains. Telekom
But providing physical infrastructure is one thing. Improving the
Malaysia continues to play its part in spurring development in
mental infrastructure of a nation is quite another, and much more
many parts of the country where its services are needed. It is
difficult to achieve. While Telekom Malaysia of course provides
committed to providing access to communications in the remote
the former, it also attempts the latter. Much of its efforts are
areas, such as those in the interior of Sarawak. It is committed
concentrated where they would be most effective and practical –
to bridging the digital divide, and is playing an active role in
at the national school level.
educating those less exposed to the digital revolution so they can
enjoy equal access to the immense possibilities that the multimedia
Telekom Malaysia has made it a point to contribute as much as
world presents. It is committed to creating a healthy population,
it can to improve the facilities and general studying environment
because physical fitness and endurance contribute positively to
in public schools, especially those in less developed areas of the
the overall psyche of the nation. Lastly, Telekom Malaysia is also
country. Since the year 2001, it has been participating in the
committed to placing Malaysia on the international map and
Education Excellence Programme by Yayasan Pembangunan
contributes to national events, not necessarily related to the
Ekonomi Islam Malaysia (YPEIM). In essence, the programme
industry. This is driven not so much out of a desire for glory but
provides financial assistance to needy students from selected
rather to show the world that we have what it takes to walk and
schools in the Federal Territory, Selangor, Kedah, Terengganu,
talk among the best.
Kelantan, Pahang and Sabah. Telekom Malaysia has pledged to
provide RM12,000 to each school a year for five years, ending in
In 2002, as in previous years, Telekom Malaysia continued to
2005. Last year, it made its second-year contribution totalling
contribute to the nation by stepping out of its business sphere and
RM60,000 to the programme.
supporting various activities that promoted the well-being of the
country. Although Telekom Malaysia does not limit itself to any
While the YPEIM aims to improve standards of education generally,
particular type of sosio-development work, a large number of its
Telekom Malaysia has also taken a keen interest in IT education
non-profit-oriented activities can be broadly categorised into three
and facilities in schools. Apart from its direct involvement in
areas namely intellectual development, sports and the community.
enhancing the use of IT in schools nationwide via the Smart
School Project, the Company also supports any serious attempt
by schools and other institutions of learning to improve IT
TELEKOM MALAYSIA AND INTELLECTUAL
DEVELOPMENT
literacy among their students.
Telekom Malaysia fully supports the Government’s vision of
moulding the country into a multimedia haven. In order to realise
this vision, however, the people need to be nurtured in an IT and
multimedia-rich environment such that they do not just have ITknowledge but are able to apply this knowledge in their daily lives.
As it stands, there exists a disparity in IT awareness and skills
across the country, most markedly between rural and urban
populations. Realising this, the Government has made it one of
its key objectives to bridge the “digital divide”. Concerted efforts
are being made to provide communications facilities such as
Internet access to rural areas so that people can benefit from the
many advantages they bring. Telekom Malaysia is very much
involved in the programmes to connect rural Malaysia to the rest
of the country and, indeed, the world.
As a corporate organisation mindful of its social obligation, Telekom Malaysia
contributes regularly in the areas of education, health, sports and welfare.
155
our contributions to the nation
Telekom Malaysia has continued to play its part in projecting
In addition, Telekom Malaysia was also the platinum sponsor of
the image of Malaysia at the international level. In 2002, it was,
three Asia News Broadcasting series – MSC Online Season I and
for the fifth consecutive year, the main sponsor of the Langkawi
II which was broadcast both on local TV as well as on Malaysia
International Dialogue (LID), a meeting of some 450 heads of
Airlines’ in-flight programme. The series proved to be popular
government, ministers, businessmen, legal advisors, journalists
as a tool to update and educate viewers in the many ongoing
and trade unionists, mainly from Commonwealth countries, to
activities in the MSC. For each serie, Telekom Malaysia sponsored
discuss matters of global concern in an open and frank manner.
RM450,000. And in the third Season of the series, Telekom
The theme for last year’s meeting was Towards a Smarter Globe
Malaysia’s Chief Executive Y.Bhg. Dato’ Dr. Md Khir Bin Abdul
– Enhancing Security and Prosperity for Development Through
Rahman was allocated three whole episodes in which he elaborated
Smart Partnerships. Telekom Malaysia was the main sponsor of
his views on “re-educating the public” and “the need to
the Dialogue with a total sponsorship value of RM2 million.
re-examine our core knowledge and skills to ensure the survival
of the nation in the challenging networked digital era” – two areas
he had broached in the previous season.
Telekom Malaysia lends a hand in enhancing ICT development.
TELEKOM MALAYSIA AND THE COMMUNITY
Telekom Malaysia makes a Haj pilgrim’s journey more comfortable.
It is difficult to demarcate activities carried out by Telekom Malaysia
that fall exclusively under a “community service” banner, as
almost every activity carried would, to a certain extent, affect
The Company was also one of the main sponsors of the Asia
the community. However, a fair share of Telekom Malaysia’s
Pacific ICT Awards (APICTA) 2002. Reflecting its own interest and
programmes and projects in the year 2002 could be classified as
participation in this industry the e-Commerce Award Category
its contribution to the society and community at large.
was given in the name of Telekom Malaysia. The award was given
to the most innovative ICT solution developed to enhance web-
Its community work got off to a good start in January when
based transactions. The APICTA event was aimed at providing a
Telekom Malaysia again made its contribution to pilgrims who will
platform for ICT innovators and entrepreneurs in the region to
be performing their Haj. Since 1995, the Company has been
benchmark their products against each other; as well as to
contributing practical accessories such as sling bags, face towels,
stimulate economic and trade relations, the transfer of technology
luggage tags and shoe bags as well as prayer books to the
and creating business opportunities.
pilgrims. In 2002, Telekom Malaysia donated no less than
RM615,000 in such accessories. In addition, the Company also
provided greater convenience for the pilgrim to call home by
156
offering a Malaysia Direct service, which enable them to make
Le Tour de Langkawi. Telekom Malaysia has also provided its
free calls from Saudi Arabia, where the call charges would be
communications expertise at the 16th Commonwealth Games held
borne by the receiving party in Malaysia. In addition, it also
in Kuala Lumpur in 1998, and the 21st SEA Games, also held in
offered special rates to subscribers of its mobile services while
Kuala Lumpur, in 2001. Most recently, it has added the first
they were performing their Haj.
ever World Tower Run Championship to its cap of sporting
accomplishments.
Telekom Malaysia, the main telecommunications sponsor,
provided a toll free line comprising eight hunting lines, fax lines
Needless to say, while promoting healthy minds and bodies and
and Internet access for the Telekom 2002 campaign organised by
a spirit of excellence, the international sporting events are also
the Majlis Kanser Nasional (MAKNA). The campaign aimed at
opportunities in which Malaysia can showcase itself to the world,
raising funds via telephone pledges for cancer patients who
not just its sporting talent, but also the country itself – its lush
needed financial aid.
and scenic destinations, its warm and hospitable people and, of
course, its technological prowess and economic progress. By
The year 2002 marked a special year-long campaign by the
supporting these ventures, therefore, Telekom Malaysia plays its
Malaysian AIDS Council’s. Telekom Malaysia was one of the main
part in aiding the Government to promote the country as a
Corporate Sponsors donating RM250,000 to support its activities
beautiful tourist destination as well as an ideal and capable
and mission on the occasion of its 10th Anniversary.
international sporting venue.
For the fourth time running, Telekom Malaysia participated in OPS
Telekom Malaysia Le Tour de Langkawi is the most prominent
SIKAP, a road safety campaign organised by the Royal Malaysian
cycling event outside Europe. It has been acknowledged as a
Police in conjunction with the festive season. The objective of the
major non-European cycling event and since been accorded a
campaign is to heighten road safety awareness and promote
world rating of 2.2 by the International Cycling Union (ICU).
courteous driving habits among road users. Telekom Malaysia’s
It was initially known as Le Tour de Langkawi but when Telekom
contribution is in the form of canopies for the use of police
Malaysia ugraded its sponsorship as the Title Sponsor in 2002,
personnel on highways, banners and posters to the value of
the race has since been known as Telekom Malaysia Le Tour de
RM155,000.
Langkawi. Besides cash sponsorship, Telekom Malaysia also
provide sponsorship in the form of logistics support and
telecommunication facilities for the Media Centre and the
TELEKOM MALAYSIA AND SPORTS
Secretariat at all starting and ending locations. TM Cellular Sdn.
Telekom Malaysia believes healthy bodies contribute to healthy
Bhd., the cellular arm of Telekom Malaysia is the Official Cellular
minds and, therefore, progress of the nation. Consequently, it is
Provider of the race, providing race officials and staff with mobile
a regular sponsor of a number of sporting functions, from local
phones. TM Net Sdn. Bhd., another subsidiary of Telekom
students’ football, the Paralympics and Sukan Malaysia (SUKMA)
Malaysia is the official Internet Provider of TMLTDL providing
to such international and renowned events as Telekom Malaysia
Internet services.
157
our contributions to the nation
In 2002, the race attracted 154 professional cyclists representing 22 teams. And, for the first time, Telekom
Malaysia provided live coverage of all the finishing phases of the race. The telecommunications services
as well as auxiliary support provided by Telekom Malaysia totalled RM10 million. Given the success of the
event, the company in November 2002 signed an agreement with organisers First Cartel (M) Sdn. Bhd. to
repeat its title sponsorship for the year 2003, pledging another RM10 million, of which RM6 million in
cash, RM2 million for the live broadcast and RM2 million for various other necessities.
While Telekom Malaysia Le Tour de Langkawi
was probably the most highlighted of sporting
events sponsored by Telekom Malaysia in 2002,
the World Tower Run Championship was by no
means any less impressive. For a start, it was
the first international towerthon of its scale ever,
in any country. The fact that it was held in
Malaysia, at Menara Kuala Lumpur (MKL) no
less, can be attributed to two years of
discussions and negotiations between the
management of MKL and the World Federation
of Great Towers (WFGT) of which MKL is a
member. The WFGT has 22 members comprising
magnificent towers from around the world.
Thanks to MKL’s initiative, WFGT members will
take turns to host the World Tower Run on an
annual basis, beginning with the inaugural MKL
run in 2002. Each member tower was invited to
send three runners to the race, while Malaysia,
being the host country, was represented by its
top 50 men and 50 women runners who
qualified at the Malaysian Tower Run also organised by MKL. Telekom Malaysia was the Title Sponsor in
this international event, in support of MKL as a subsidiary of the Group. Telekom Malaysia has been
sponsoring towerthon events held at the MKL since 1999. Last year, its sponsorship totalled RM500,000.
On the subject of sports, Telekom Malaysia’s contribution towards the ninth Sukan Malaysia (SUKMA) also
merits mention. Donating RM800,000 in kind, Telekom Malaysia was a co-sponsor and the official
telecommunications provider of the Games, ensuring the availability of the whole gamut of technical facilities
needed – from the infrastructure to the network for transmission of radio and television broadcasts to local
and foreign radio and TV stations. Meanwhile, Telekom Malaysia’s subsidiary TM Cellular, being the Official
Cellular Provider, loaned out 100 handphones and sponsored 100 units of TOUCH Advance Starter Packs
worth RM178 each and recharge cards worth RM50 each to officials at the games.
In all, 2002 proved to be an exciting year for Telekom Malaysia in terms of fulfilling its social responsibilities.
The Group has a sincere wish to participate in national development and to show compassion wherever
possible. Last year, it succeeded in doing so with fruitful results.
158
Awards &
Recognition
NACRA Award 1997
NACRA Award 2000
•
•
Industry Excellence Award for Trading and Services
•
Best Annual Report in Bahasa Malaysia
NACRA Award 1998
•
Dewan Bahasa dan Pustaka Anugerah Citra
Laporan Tahunan Sektor Swasta 2000
NACRA Award 1999
•
•
TV Advertisement “Amazing Telekom”
– Most Oustanding Award
•
TV Advertisement “Tunaikan Zakat Fitrah”
– Special Jury Award
•
Annual Report – Special Jury Award
KLSE Corporate Sector Award 2000
•
Main Board Trading and Services Category
NACRA Award 2001
•
•
Best Annual Report in Bahasa Malaysia
Dewan Bahasa dan Pustaka Anugerah Citra
Laporan Tahunan Sektor Swasta 2001
•
Most Outstanding Annual Report Award
•
Billboard Advertisement “Good 2 Talk”
– Special Jury Award
159
Highlights
of the year
2002
4
January 2002
Telekom Malaysia signed an agreement with First Cartel Sdn. Bhd. to be the Title Sponsor of
the Telekom Malaysia Le Tour de Langkawi 2002. Telekom Malaysia was represented by
Y.Bhg. Tan Sri Dato’ Ir. Md. Radzi Mansor, Chairman, Y.Bhg. Dato’ Dr. Md Khir Abdul Rahman, its
Chief Executive who was accompanied by Deputy Chief Executive, Y.Bhg. Dato’ Dr. Abdul Rahim
Haji Daud, while First Cartel was represented by Executive Chairman, Y.Bhg. Datuk Wan Lokman
Dato’ Paduka Wan Ibrahim and Executive Director, Encik Abdullah Kamal Shafi’i. This ceremony
was witnessed by Y.B. Datuk Hishammuddin Tun Hussein, Minister of Youth and Sports.
Telekom Malaysia pledged to contribute RM8 million in cash and kind. As the Title Sponsor,
Telekom Malaysia provided telephone, cellular and fax services, trunk radio and the technical
crew as well as Internet access and video streaming facilities for the transmission of event
highlights. TMTOUCH was the official sponsor for cellular phones and services while TM Net
was the ‘Official Website Presenter’ for the race. The race was flagged off on 1 February and
ended on 10 February 2002.
25 January 2002
Telekom Malaysia was accorded an award for being The Highest Service Tax Payer by Jabatan
Kastam Diraja Malaysia. Y.Bhg. Dato’ Dr. Md Khir Abdul Rahman, Chief Executive of Telekom
Malaysia, received the award from Prime Minister YAB Dato Seri Dr. Mahathir Mohamad at the
Sambutan Hari Kastam Sedunia ke-20, held at the Akademi Kastam Diraja Malaysia (AKMAL)
in Malacca.
31 January 2002
TM Multimedia, Telekom Malaysia’s Multimedia Division signed an agreement with four major
resellers for the distribution of its tmnet prepaid card. The four resellers are KAT Technologies
Sdn. Bhd., Dancom Sdn. Bhd., Milreach Sdn. Bhd. and Telekom Sales and Services Sdn. Bhd.
The appointment of these major resellers has helped boost sales of the card, which has
reached the target of over a million cards.
160
1
February 2002
The Telekom Malaysia Le Tour de Langkawi 2002 bicycle race was flagged off at a ceremony
in Putrajaya by Prime Minister YAB Dato Seri Dr. Mahathir Mohamad on 1 February 2002.
Also present were Telekom Malaysia’s Chairman, Y.Bhg. Tan Sri Dato’ Ir. Md. Radzi Mansor,
Chief Executive, Y.Bhg. Dato’ Dr. Md Khir Abdul Rahman, and Deputy Chief Executive,
Y.Bhg. Dato’ Dr. Abdul Rahim Haji Daud. The 10-day race, which toured Tapah, Bentong, Bangi,
Melaka, Muar, Johor Bahru, Kluang, Tampin, Port Dickson, Petaling Jaya, Menara Telekom and
Genting Highlands, ended in Kuala Lumpur on 10 February 2002. As the Title Sponsor,
Telekom Malaysia was given the honour of being one of the ‘Host Venues’ for the race.
8
February 2002
Telekom Malaysia held a carnival in conjunction with the Telekom Malaysia Le Tour de
Langkawi 2002. Activities such as a colouring contest, karaoke contest, cultural show and a
mini exhibition were organised for the carnival. The one-day Carnival was part of Telekom
Malaysia’s celebrations for being honoured as the ‘Host Venue’ for stage 9 of the race.
19
February 2002
Telekom Malaysia briefed the media on the new state-of-the-art Asia Pacific Cable Network 2
(APCN 2), jointly constructed by Telekom Malaysia and other international telecommunication
carriers. APCN 2 is the first “self-healing ring configuration” and high bandwidth optical fibre
submarine cable system in the Asia Pacific, built at a cost of US$1 billion (RM3.8 billion).
19
March 2002
MTN Networks, Telekom Malaysia’s wholly-owned subsidiary in Sri Lanka, won a prestigious award
at the GSM World Congress in Cannes, France, for the second consecutive year. The GSM World
Awards 2002 attracted entries from over 500 operators worldwide from which an international
panel of mobile telecommunications experts short-listed candidates in 10 different categories.
161
highlights of the year 2002
28 March 2002
Telekom Malaysia, in collaboration with the Legal Assistance Bureau, Legal Affairs Division of
the Prime Minister’s Department (Biro Bantuan Guaman, or BBG), launched INFOGUAMAN BBG
which offers legal information for the general public via the 600 82 7713 infoline.
The service was launched by Y.B. Datuk Seri Utama Dr. Rais Yatim, Minister in the Prime
Minister’s Department, at a ceremony held in KL Sentral. Also present was Y.Bhg. Dato’
Dr. Abdul Rahim Hj. Daud, Deputy Chief Executive. It is hoped the INFOGUAMAN BBG Service
will make legal information transparent to all levels of society, especially to the customers in
rural areas who seek information and guidance on legal matters.
22 April 2002
Telekom Malaysia signed an agreement with the Penang State Government for the Bulk
Payment System. Among the other State Governments which have used the system are
Terengganu, Kedah, Johor, Sarawak, Sabah, Perak, Kelantan and Selangor. The bulk payment
system makes the payment of bills less complicated for big organisations with multiple bills
with different telephone number accounts and dates. Services covered under this mode of
payment include the fixed line telephone service, telefax and TM ISDN.
3
May 2002
Telekom Malaysia and Standard Chartered Bank Malaysia Berhad entered into a new agreement
on the co-branding of the TM Visa Card Program. The TM Visa Card Program provides
exclusive credit card facilities tailored to customers’ needs in line with the Company’s
continuous efforts to maintain a good relationship with its customers. At the signing
ceremony, Telekom Malaysia and Standard Chartered also officially announced a new design
for the TM Visa Card, with the Telekom Malaysia logo embossed in the centre of the card.
Dr. Idris Ibrahim, the Chief Operating Officer of TM TelCo, officiated at the signing ceremony.
7
May 2002
Yang di Pertuan Agong Tuanku Syed Sirajuddin Ibni Al-Marhum Tuanku Syed Putra Jamalullail
visited Telekom Malaysia offices at Jalan Raja Chulan. The visit was telecast live nationwide to
Telekom Malaysia’s staff via video conferencing. The royal entourage began the tour at the
Network Management Centre or NetCare, followed by a visit to the International Assisted
Service Centre.
The royal visitor was received by Y.B. Datuk Amar Leo Moggie, Minister of Energy,
Communications and Multimedia, Y.Bhg. Tan Sri Dato’ Ir. Hj. Md. Radzi Mansor, Chairman of
Telekom Malaysia and Y.Bhg. Dato’ Dr. Md Khir Abdul Rahman, Chief Executive of Telekom
Malaysia, along with Telekom Malaysia’s Board of Directors and Senior Management.
162
13
May 2002
Telekom Malaysia hosted a five-day Commonwealth Telecommunications Organisation
workshop entitled Broadband Access and Multimedia. The workshop, attended by some
38 delegates from 35 Commonwealth countries, discussed various issues pertaining to its
theme. The workshop was officiated by Y.B. Datuk Amar Leo Moggie, Minister of Energy,
Communications and Multimedia.
23
May 2002
In cooperation with TV3, Telekom Malaysia unveiled an interactive game show, combining a
new entertainment and game show format never before aired in Malaysia. “Telekom Malaysia
Talking Telephone Numbers” was open to all Telekom Malaysia Group customers, including
fixed line and TMTOUCH customers. The customers were able to participate in the game from
their homes.
20
June 2002
In collaboration with the Malaysian Meteorological Service Department, the Company launched
Infocuaca, the latest teleinfo service providing weather and marine forecasts nationwide.
The service is targeted at hotels and resorts, travel agencies, fishermen and outdoor activity
lovers, and can be accessed at 600 82 7752.
11
July 2002
Telekom Malaysia was the main sponsor of the Langkawi International Dialogue (LID) 2002
for the fifth consecutive year, at a cost of RM2 million. The event attracted about 450
participants comprising Heads of State and government, ministers, leading businessmen and
media representatives from developing nations and of the South. Chief Executive, Y.Bhg. Dato’
Dr. Md Khir Abdul Rahman presented a mock cheque to YAB Dato Seri Dr. Mahathir
Mohamad, Prime Minister.
163
14 July 2002
The Telekom Malaysia Le Tour de Langkawi 2002 Appreciation Ceremony was held at the
Marriot Hotel in Putrajaya. Prime Minister YAB Dato Seri Dr. Mahathir Mohamad, as Patron of
the Race, was present at the ceremony. Also present were Telekom Malaysia’s Chairman
Y.Bhg. Tan Sri Dato’ Ir. Md. Radzi Mansor and Chief Executive Y.Bhg. Dato’ Dr. Md Khir Abdul
Rahman. Sponsors, cyclists and volunteers of the annual bicycle race each received a
certificate of appreciation from the Prime Minister. Telekom Malaysia Le Tour de Langkawi was
organised by First Cartel (M) Sdn. Bhd.
19 July 2002
Telekom Smart School Sdn. Bhd. entered into a strategic collaboration with the Ministry of
Education where it was given the mandate to study how the Smart School Integrated Solution
could be made available to as many government schools and private institutions as possible.
An Official Signing Ceremony for the Main Licensing Agreement to this effect was carried out.
6
August 2002
Telekom Malaysia agreed to mentor Ramly Food Processing Sdn. Bhd. in the management of
occupational safety and health issues. At the signing ceremony, Telekom Malaysia was
represented by Encik Md. Fauzi Said, Senior Vice President, Group Human Resource
Management while Ramly Food Processing was represented by its Senior Manager,
Encik Samizan Saion. The programme is in line with Telekom Malaysia’s aspiration to provide
a conducive, safe and healthy environment for all employees, contractors, customers and the
Malaysian public.
12 August 2002
Telekom Malaysia held a seminar entitled “Teknologi Maklumat dan Komunikasi Kerajaan
Negeri Melaka” in collaboration with the Melaka State Development Corporation (PKNM).
The main objective of the seminar was to support the State Government’s aspiration in producing
a community of knowledge workers by enhancing the participants’ understanding of the latest
telecommunications technologies. The seminar attracted 120 participants, including Y.A.B. Datuk
Seri Hj. Mohd Ali Mohd Rustam, the Chief Minister of Malacca, State Exco Members, Heads of
Department, potential tenants of MITC and corporate customers of Telekom Malaysia.
164
19
August 2002
Deputy Minister of Energy, Communications and Multimedia, Y.B. Datuk Tan Chai Ho, and
other senior officers from the Ministry and Telekom Malaysia, visited Telekom Malaysia’s
Customer Assistance Service Centre in Kuantan, one of Telekom Malaysia’s nine Emergency
(999) Service Centres in the country. During the visit, the Deputy Minister and his entourage
were briefed on the Emergency (999) Service and taken on a tour of the Centre.
Mr. P. Sritharan, Acting Senior Vice-President, Consumer and Business TM TelCo, Telekom
Malaysia, briefed the Deputy Minister and his entourage.
22
August 2002
Telekom Malaysia, together with TV3, held a prize-giving ceremony for three weekly winners
of the interactive game show, Telekom Malaysia Talking Telephone Numbers (TMTTN), at the
Kedai Telekom in Shah Alam. Fifteen-year-old student Nur Nadila Sapari from Kampung
Pandan took home RM30,000 while the other two winners, Asrul Sanee Jaafar and Encik Nor
Hanizam Mohd Noor, received RM10,000 each. Prizes were presented by Deputy Chief
Executive, Y.Bhg. Dato’ Dr. Abdul Rahim Hj. Daud.
26
August 2002
Telekom Malaysia awarded attractive prizes to the winners of the TMLTdL 2002 Photo Contest
held in conjunction with the Telekom Malaysia Le Tour de Langkawi 2002. The contest, which
attracted more than 170 entries, was based on two themes, namely The People’s Race and
Pedal to Glory. In total, three grand prizes and 20 consolation prizes were given away.
The first prize went to Encik Aswad Yahya, a photographer from Utusan Melayu Bhd.
26
August 2002
Telekom Malaysia contributed RM150,000 in cash to the Asia Pacific ICT Awards 2002
(APICTA) held in conjunction with the 6th MSC International Advisory Panel (IAP) Meeting.
With this contribution, Telekom Malaysia became an Award Category Sponsor for the
E-Commerce Category, reflecting the Company’s emphasis on e-commerce and related activities.
165
26 August 2002
Telekom Malaysia was a Co-sponsor and the Official Telecommunications Provider for the ninth
Sukan Malaysia (SUKMA IX), contributing RM800,000 in kind to the Games. Its wholly-owned
subsidiary TM Cellular Sdn. Bhd., under the brand name TMTOUCH, was given the honour of
being the Official Cellular Provider. The services provided were crucial for the smooth running
of the Games.
3
September 2002
Telekom Malaysia participated in the three-day Asean Communications & Multimedia (ACM) Expo
2002 from 3-6 September 2002, held in conjunction with the Malaysia ICT Week 2002.
The chosen theme ‘Reaching Out’, reflects the Company’s aspiration to expand globally. As a
leading communications company in the country, Telekom Malaysia regularly participates in
international and domestic initiatives to place Malaysia as a communications and multimedia hub.
16 September 2002
Telekom Malaysia contributed RM70,000 in kind to the TM Live Mount Kinabalu Video
Conference, becoming the main sponsor for the live telecast by providing the
telecommunications and video conferencing facilities. A video conferencing session with
Y.A.Bhg. Datin Seri Dr. Siti Hasmah Mohd. Ali was the highlight of an expedition up the
mountain by students of the Multimedia University (MMU). It was the first time the Company
had conducted a video conference from the highest peak in South East Asia.
21-22
September 2002
Tiaranita together with Menara Kuala Lumpur organised a Tower Camp at Menara KL with a
theme “Good Fun at Great Heights Where Fun and Learning Become One”. At the event, children
of Tiaranita members aged between nine to fourteen spent two days without parental supervision
where they were divided into groups with programs designed to stimulate and motivate their
minds. Among others, participants were taken for a ride in PUTRA LRT, plus a visit to
Petrosains, Zoo Negara, Muzium Telekom and apart from that participants were also involved in
team building and aerobic session activities at the Mega View Deck. The Tower Camp was
launched by Puan Shahidah Ridhwan, the Chief Executive Officer of Menara Kuala Lumpur.
166
30
September 2002
Another prize-giving ceremony for the weekly winners of the interactive game show Telekom
Malaysia Talking Telephone Numbers (TMTTN), was again held at Kedai Telekom Shah Alam.
The four main winners this time were Tengku Noorihan Tengku Ali, Nurzuliza Jamirsah,
Shashindra A/L Muniyandi and Zanizam Md. Suji, each of whom received RM10,000.
26
October 2002
A total of 199 graduates attended the the 7th Convocation of Telekom Training College in
Kuala Lumpur. Y.B. Datuk Tan Chai Ho, Deputy Minister of Energy, Communications and
Multimedia, presented diplomas to the graduands of the School of Telecommunications,
Information Technology, Business Management and Multimedia Studies. Also present was
Chairman of Telekom Malaysia, Y.Bhg. Tan Sri Dato’ Ir. Md. Radzi Mansor.
31
October 2002
Telekom Malaysia was awarded The Industry Excellence Award in the Trading & Services
category for the sixth year consecutively at the National Annual Corporate Report Awards 2002
held at The Palace of the Golden Horses. At the ceremony, Telekom Malaysia was also
awarded the Best Report in Bahasa Malaysia for the second year in a row. Deputy Chief
Executive, Y.Bhg. Dato’ Dr. Abdul Rahim Hj. Daud received the awards from Y.B. Tan Sri
Muhyiddin Mohd Yassin, Minister of Domestic Trade and Consumer Affairs.
20
November 2002
Telekom Malaysia signed an agreement with First Cartel Sdn. Bhd. to be the Title Sponsor of
Telekom Malaysia Le Tour de Langkawi 2003. Telekom Malaysia was represented by Deputy Chief
Executive Y.Bhg. Dato’ Dr. Abdul Rahim Haji Daud, who was accompanied by General Manager of
Corporate Affairs, Encik Kairul Annuar Mohamed Zamzam, while First Cartel was represented by its
Executive Chairman Y.Bhg. Datuk Wan Lokman Dato’ Paduka Wan Ibrahim and Executive Director
Encik Abdullah Kamal Shafi’i. Also present was Y.B. Datuk Hishammuddin Tun Hussein, Minister of
Youth and Sports and Y.Bhg. Tan Sri Dato’ Ir. Md. Radzi Mansor, Chairman of Telekom Malaysia.
As the Title Sponsor, Telekom Malaysia pledged to contribute RM10 million in cash and kind,
providing telephone, cellular and fax services, trunk radio and the technical crew as well as
Internet access and video streaming facilities for the transmission of daily official results.
TMTOUCH was the official sponsor for cellular phones and services while TM Net was the
Official Internet Provider for the race.
167
29-30
November 2002
Thanks to Telekom Malaysia, fans of popular Singaporean sitcom Phua Chu Kang had a
chance to meet the cast of the comedy TV series. Phua Chu Kang and “family” were featured
live at the Dewan Wawasan Convention & Exhibition Centre, Menara PGRM. A host of other
interesting activities were held in conjunction with the show, such as an impersonation
contest.
16 December 2002
Telekom Malaysia held a seminar entitled Teknologi Maklumat dan Komunikasi Kerajaan Negeri
Sembilan in collaboration with the Information Technology Management Unit, State Secretary
of Negeri Sembilan. The main objective of the seminar was to support the State Government’s
aspiration to produce a community of knowledge workers. The seminar attracted
150 participants, including Y.A.B. Dato’ Seri Utama Tan Sri Hj Mohd Isa Dato’ Hj Abdul Samad,
the Menteri Besar of Negeri Sembilan, State Exco Members, heads of department,
state government agencies and corporate customers of Telekom Malaysia.
16 December 2002
Telekom Malaysia signed a Technical and Management Services Agreement with Sotelgui s.a.,
the incumbent Telco in Guinea, Africa. Under the agreement, Telekom Malaysia will continue
to provide experienced and qualified staff to assist the management of Sotelgui s.a. to ensure
the effective implementation of telecommunication projects and efficient day-to-day operations.
Since Telekom Malaysia’s participation in Sotelgui s.a. in 1995, the company has made much
headway in improving the quality and scope of its services.
17 December 2002
Telekom Malaysia won the Most Outstanding Award for the Private Sector Annual Report 2001
in conjunction with the Citra Wangsa Malaysia Awards for the Private Sector. The annual event
was organised by Dewan Bahasa dan Pustaka.
168
corporate & SOCIAL
responsibilities
...caring for
SHAREHOLDERS
26
February 2002
Telekom Malaysia registered a revenue of RM9.67
billion for the year ended 31 December 2001, an
increase of 9.7% from the previous year. Net profit of
the Group climbed 156.9% to RM1.8 billion for the
year 2001. The increase in revenue was due largely
to the growth in mobile revenue, supported by the
growth in data services. The sharp increase was also
as a result of the disposal of an associate company
worth RM927.6 million. The telephony business
contributed 67.2% of the operating revenue while
cellular and data, two fast growing segments,
accounted for 15.5% and 8.4% respectively.
21
May 2002
The Company’s 17th Annual General Meeting and
Extraordinary General Meeting was held at
The Legend Hotel, Kuala Lumpur. It was chaired by
Y.Bhg. Tan Sri Dato’ Ir. Md. Radzi Mansor, Chairman
of Telekom Malaysia. The Chief Executive, Board of
Directors and Management Team were also present.
Approximately 1,400 shareholders and proxies
attended the meeting, during which several
resolutions were passed, including the declaration of
a 10% final and 5% special dividend.
169
corporate & social responsibilities
...caring for
EMPLOYEES
1
2
3
12
1
January 2002
Telekom Malaysia treated its employees to a Hari Raya celebration
at Menara Telekom in Kuala Lumpur. Some 7,000 staff members
and their families from all over the Klang Valley attended the
annual gathering, aimed at enhancing relationships between
management and employees of the company. Y.B. Datuk Amar
Leo Moggie, Minister of Energy, Communications and Multimedia
was among the VIPs present, along with Telekom Malaysia’s Chief
Executive, Y.Bhg. Dato’ Dr. Md Khir Abdul Rahman and Deputy
Chief Executive, Y.Bhg. Dato’ Dr. Abdul Rahim Haji Daud.
10
2
April 2002
In recognition of the contributions and fine performance of staff
and divisions, Telekom Malaysia presented a total of 78 awards
in a special Excellence Awards ceremony. The annual event, which
was introduced in 1994, forms part of Telekom Malaysia’s
Rewards and Recognition programme for quality improvement
and Total Customer Satisfaction (TCS). The Awards were
presented by Y.Bhg. Dato’ Dr. Md Khir Abdul Rahman, Chief
Executive of Telekom Malaysia.
3
24
April 2002
Kelab Telekom Malaysia Kuala Lumpur held a dinner reception
and award presentation to honour the contribution and fine
performance of its club branches and members. Y.Bhg. Dato’ Dr.
Abdul Rahim bin Haji Daud, the Deputy Chief Executive of
Telekom Malaysia who is also the President of the Club,
presented the awards, which were divided into four categories,
namely Best Club Member at Branch Level, Overall Best Club
Member, Overall Best Branch Club and Sports Award. The awards
were based on such criteria as tenure of membership, involvement
and contribution towards the club, percentage increase in number
of members, activities organised and also contribution and
involvement of the clubs at the state and national level.
170
1
2
3
2
1
May 2002
Some 1,300 employees of Telekom Malaysia from 13 state
contingents gathered at the Sports Complex of Universiti Utara
Malaysia, Sintok, Kedah, to participate in the Company’s Fifth
National Sports Championship. This biennial championship,
covering nine sporting events comprising football, hockey, sepak
takraw, netball, volleyball, badminton, ping-pong, golf and
bowling, was organised by Kelab Telekom Malaysia Kedah/Perlis.
Kedah Menteri Besar Y.A.B. Dato’ Seri Haji Syed Razak Haji Syed
Zain officiated the opening ceremony.
9
2
July 2002
A special reception dinner, called Jasamu Dikenang was held at
the City Bayview Hotel, Pulau Langkawi, in honour of 187 retirees
of the Company. The former employees and their spouses were
treated to a three-day stay from 7 to 10 July, on the beautiful
island resort off Kedah during which they were taken on tours,
shopping sprees and generally given a good time. During the
dinner, Telekom Malaysia’s Chief Executive, Y.Bhg. Dato’ Dr. Md
Khir Abdul Rahman and Deputy Chief Executive, Y.Bhg. Dato’ Dr.
Abdul Rahim Haji Daud presented souvenirs to the retired
employees as a token of appreciation for their contributions
towards the Company’s progress.
31
3
October 2002
Telekom Malaysia honoured 52 scholarship holders, including
nine who returned from Canada, Japan, France and the United
Kingdom, at an awards presentation ceremony held at Holiday
Villa, Subang, in recognition of their exceptional academic and
extra-curricular achievements. At the ceremony, Degree and
Masters graduates each received RM1,000 in cash, an
appreciation certificate and a memento while Diploma graduates
and SPM students received RM500, an appreciation certificate
and a memento each.
171
...caring for
CUSTOMERS
1
2
26
1
January 2002
The Program, Sehari Bersama Pelanggan, organised by The
Ministry of Energy, Communications and Multimedia, was held to
enhance the relationship between various service providers and
their customers. It provided an opportunity for customers to
discuss problems and issues with the Ministry and the
management of, among others, Telekom Malaysia, MAXIS,
Celcom, TV3, Astro and Time dotCom.
Y.B. Datuk Amar Leo Moggie, Minister of Energy, Communications
and Multimedia was present at the event held in Mersing, Johor.
Y.Bhg. Dato’ Dr. Abdul Rahim Haji Daud, Deputy Chief Executive
represented Telekom Malaysia. Throughout the year, four similar
events were organised in Jelebu, Negeri Sembilan; Kulim, Kedah;
Sri Aman, Sarawak and Besut in Terengganu.
172
11
2
June 2002
The company launched a new CDMA Mobile Switching Centre in
Putrajaya. It is one of three centres that ensure efficient
processing of incoming and outgoing calls within the Company’s
CDMA wireless network. The other two centres are located in
Penrissen, Sarawak, and Menggatal, Sabah. Telekom Malaysia’s
fixed wireless CDMA offers data and internet speed up to 144
kilobits per second (kbps) using CDMA 2000 1X protocol
enabling advanced multimedia applications. The service is
targeted at rural and sub-urban areas as well as areas outside the
coverage of Telekom Malaysia’s cellular service.
3
10
3
August 2002
Telekom Malaysia today launched its Fixed Wireless Code Division
Multiple Access (CDMA) service in Menggatal, Sabah. The launch
was officiated by Y.B. Kol. (Kehormat) Datuk Seri Panglima (DR.)
Hj. Lajim Hj. Ukin, JP, Deputy Chief Minister and Minister of
Agriculture and Food Industry, Sabah. CDMA is a fixed wireless
service that utilises a digital wireless access technology, Code
Division Multiple Access (CDMA), operating at 800Mhz frequency.
Telekom Malaysia believes the service can help narrow the digital
divide, in line with the Government’s efforts to make
communications facilities more accessible.
4
30
4
December 2002
Telekom Malaysia held a Majlis Hari Raya Jalinan Kemesraan di
Aidilfitri with customers at Carcosa Seri Negara. Present were 700
invitees comprising corporate customers and 40 orang asli
orphans from Asrama Darul Falah as well as top management
from Telekom Malaysia. The event was held in the sharing spirit
of Aidilfitri.
173
...caring for
COMMUNITY
1
3
2
4
5-14
1
January 2002
Telekom Malaysia together with NTV7 organised a charity
programme called Aidilfitri Bersama Insan Istimewa Ikhlas dari
Telekom Malaysia & NTV7 in conjunction with the Hari Raya
celebration. The project was a way for the companies to reach
out to the less fortunate during the festive season. Seven
orphanages were visited and a total of RM100,000 was allocated
as contributions to them, with each receiving either a TV set or
a personal computer.
8
2
January 2002
Continuing with this noble tradition, Telekom Malaysia contributed
50,000 sets of sling bags, face towels, sunat prayer guidebooks
and 100,000 sets of luggage tags worth RM615,000 to pilgrims
going to Mecca. The Company also provided the pilgrims with a
special Malaysia Direct Service, enabling them to call home, the
charges being borne by the local number dialed. This service has
been provided to those performing the Haj since 1995.
174
14
3
March 2002
As a caring corporate organisation, Telekom Malaysia contributed
RM140,000 worth of Formula One Petronas Malaysia Grand Prix
2002 tickets to more than 1,400 students in Selangor and
Wilayah Persekutuan. In addition to the tickets, students were
also given T-shirts, caps, paper fans and paper binoculars, which
brought Telekom Malaysia’s contribution to RM250,000.
28
4
March 2002
Mindful of its social responsibilities, Telekom Malaysia has pledged
a total of RM300,000 to the Education Excellence Program by
Yayasan Pembangunan Ekonomi Islam Malaysia over five years
beginning year 2001. This works out to RM60,000 a year till 2005.
Under the programme, poor students from both rural and urban
schools will be given education assistance through the fund. Ten
schools from Wilayah Persekutuan, Selangor, Kedah, Terengganu,
Kelantan, Pahang and Sabah have been selected, each receiving
RM12,000 from Telekom Malaysia’s contribution of RM120,000
for 2001 and 2002.
20
1
May 2002
Telekom Malaysia held an Open Day in conjunction with the
World Telecommunications Day 2002. In line with the theme
Bridging the Digital Divide Through Convergence, Telekom
Malaysia invited 1,000 students from 32 primary and secondary
schools from the Klang Valley, Negeri Sembilan and Pahang to
participate in the Open Day. Y.B. Datuk Tan Chai Ho, Deputy
Minister of Energy, Communications and Multimedia, officiated
the opening ceremony.
1
3
2
4
13
3
November 2002
Telekom Malaysia organised a Majlis Berbuka Puasa with
members of the media at Hilton Hotel, Petaling Jaya. Some 150
representatives from all local media and Telekom Malaysia’s top
management were present. The event was held to enhance
Telekom Malaysia’s rapport with the media.
A host of interesting activities, including a Museum Telekom Tour,
interactive games and events, were organised by Telekom
Malaysia and its subsidiaries.
19
2
August 2002
Telekom Malaysia contributed RM140,000 in kind to Majlis Kanser
Nasional (MAKNA) for its Telekanser 2002 Programme which was
held from 19 August to 31 December 2002. As the main
telecommunications sponsor, Telekom Malaysia provided a toll
free line, comprising eight hunting lines (1-800-88-3313), fax
lines and Internet access. The charity programme, themed
Menghayati MAKNA Kehidupan, was organised to solicit and
collect funds via telephone pledges for cancer patients in
Malaysia in need of financial aid.
26
4
November 2002
Telekom Malaysia once again joined hands with the Royal
Malaysia Police (PDRM) by contributing RM155,500 in kind
towards its road safety campaign, known as OPS SIKAP, in
conjunction with the festive season.
Telekom Malaysia’s subsidiaries, TM Cellular Sdn. Bhd. and
Telekom Applied Business Sdn. Bhd., handed over 15,000
business posters on road safety to PDRM as part of their
contribution towards the campaign.
175
Delivering
Convenience
Find them in the largest cities
Find them in the smallest villages
Easy and accessible
They are everywhere
Demonstrating our commitment
Fulfilling peoples needs
By delivering convenience
Reports and Financial Statements
Directors’ Report
179
Significant Accounting Policies
185
Income Statements
190
Balance Sheets
191
Consolidated Statement of Changes in Equity
192
Statement of Changes in Equity
193
Cash Flow Statements
194
Notes to the Financial Statements
195
Statement by Directors
242
Statutory Declaration
242
Report of the Auditors
243
General Information
244
Directors’ Report
1.
The Directors have pleasure in submitting their annual report and the audited financial statements of the Group and of the Company
for the year ended 31 December 2002.
PRINCIPAL ACTIVITIES
2.
The principal activities of the Company during the year are the establishment, maintenance and provision of telecommunication and
related services under the licence issued by the Minister of Energy, Communications and Multimedia. The principal activities of the
subsidiary companies are set out in note 17 to the financial statements. There were no significant change in the nature of these
activities during the year.
RESULTS
3.
The results of the operations of the Group and of the Company for the year were as follows:
The Group
The Company
RM million
RM million
Profit/(loss) after taxation
Minority interest
Profit/(loss) for the year attributable to shareholders
4.
1,082.7
(26.4)
1,056.3
(326.2)
—
(326.2)
In the opinion of the Directors, the results of the operations of the Group and of the Company during the year were not substantially
affected by any item, transaction or event of a material and unusual nature.
DIVIDENDS
5.
Since the end of previous year, the dividends paid, declared or proposed by the Company are as follows:
RM million
(a)
In respect of the year ended 31 December 2001, as proposed in the Directors’ Report for that year,
– a final gross dividend of 10.0 sen per share less tax of 28% was paid on 24 June 2002
227.7
– a special gross dividend of 5.0 sen per share less tax of 28% was paid on 24 June 2002
113.9
341.6
(b)
The Directors now recommend the payment of a final gross dividend of 10.0 sen per share less tax of 28%, amounting to
RM228.0 million which, subject to the approval of members at the forthcoming Annual General Meeting of the Company to be
held on 20 May 2003, will be paid on 23 June 2003 to shareholders registered on the Company’s Register of Depositors at
the close of business on 28 May 2003.
179
Directors’ Report
EMPLOYEES’ SHARE OPTION SCHEME (ESOS)
6.
An Employees’ Share Option Scheme 2 (ESOS 2) was approved by the shareholders at an Extraordinary General Meeting held on
28 March 1997. In that year, options to subscribe for 217,704,000 ordinary shares of RM1 each at the exercise price of RM10.50
per share were granted to eligible Executives and Non-Executives of the Company (referred to as ESOS 2, phase 1).
On 31 July 2001, options to subscribe for 89,536,000 ordinary shares of RM1 each under ESOS 2 were granted to eligible Executives
and Non-Executives of the Company at an exercise price of RM8.53 per share (referred to as ESOS 2, phase 2). ESOS 2, phase 1
and phase 2 lapsed on 15 April 2002.
A new Employees’ Share Option Scheme 3 (ESOS 3) was approved by the shareholders at an Extraordinary General Meeting held on
21 May 2002. On 1 August 2002, options to subscribe for 259,014,000 ordinary shares of RM1 each under ESOS 3 were granted
to eligible Executives and Non-Executives of the Company and its subsidiary companies at an exercise price of RM7.09 per share.
The principal features of ESOS 3 are as follows:
(a)
The eligibility for participation in ESOS is at the discretion of the Option Committee appointed by the Board of Directors.
(b)
The total number of shares to be offered shall not exceed 10% of the total issued and paid-up shares of the Company.
(c)
No option shall be granted for less than 1,000 shares nor more than 550,000 shares unless so adjusted pursuant to item (f)
below.
(d)
The subscription price of each RM1 share shall be the average of the middle market quotation of the shares as shown in the
daily official list issued by the Kuala Lumpur Stock Exchange for the five (5) trading days preceding the date of offer with a
10% discount.
(e)
Subject to item (f) below, an employee may exercise his options subject to the following limits:
Number of options granted
Percentage of options exercisable (%)
Year 1
Year 2
Year 3
Year 4
Year 5
Below 20,000
100
—
—
—
—
20,000 – 99,999
*40
30
**30
—
—
20
20
20
20
20
100,000 and above
*
40% or 20,000 options, whichever is higher
** 30% or the remaining number of options unexercised
(f)
In the event of any alteration in capital structure of the Company during the option period which expires on 31 July 2007, such
corresponding alterations shall be made in:
(i)
the number of new shares in relation to ESOS so far as unexercised;
(ii)
and/or the subscription price.
As at 31 December 2002, options to subscribe for 254,208,000 ordinary shares of RM1 each at the option price of RM7.09 per share
under ESOS 3 remained unexercised. These options remain in force until 31 July 2007. These options granted do not confer any
right to participate in any share issue of any other company.
180
EMPLOYEES’ SHARE OPTION SCHEME (ESOS) (continued)
The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the list of option
holders and their holdings pursuant to Section 169 (11) of the Companies Act, 1965 except for information of employees who were
granted options of above 100,000 shares each.
Other than the Directors’ options disclosed in paragraph 17 below, the list of employees of the Company and its subsidiary companies
who were granted more than 100,000 options each under ESOS 3 are as follows:
No. of options No. of shares
Name
Designation
granted
exercised
Dato’ Dr. Ir. Mohamad Khir Harun
Chief Executive Officer, TM Cellular Sdn. Bhd.*
120,000
Nil
Dr. Idris Ibrahim
Chief Operating Officer, TM TelCo
120,000
Nil
Hj. Hamis Hasan
Chief Financial Officer, TM TelCo
120,000
Nil
Baharum Salleh
Chief Executive Officer, TM Net Sdn. Bhd.*
108,000
Nil
Abdul Majid Abdullah
Vice President, Corporate Strategy & Planning, TM
108,000
Nil
Mohd Yahaya Mohd Shariff
Senior Vice President, Network Services, TM TelCo
120,000
Nil
Adnan Rofiee
Senior Vice President, Major Business & Government,
TM TelCo
108,000
Nil
Tan Chian Khai
Chief Strategy Officer, Telkom SA Limited*
120,000
Nil
Towfek Elias
Vice President, Network Development, TM TelCo
120,000
Nil
Yusof Ampuan Kechil
Chief Executive Officer, VADS Berhad*
120,000
Nil
TM – Telekom Malaysia Berhad
* Employees of TM, seconded to respective companies
SHARE CAPITAL
7.
During the year, the issued and fully paid-up share capital of the Company was increased by the issuance of 57,500, 58,785,500 and
4,658,000 ordinary shares of RM1 each at the option price of RM10.50, RM8.53 and RM7.09 per share respectively for cash under
ESOS 2 and ESOS 3 respectively. These shares rank "pari-passu" in all respects with the existing issued ordinary shares of the
Company.
CONVERTIBLE BONDS
8.
As at 31 December 2002, the Company has USD359.9 million outstanding Convertible Bonds due 2004. These Bonds are convertible
into fully paid ordinary shares of RM1 each of the Company at an initial conversion price of RM15.60 per ordinary share with a fixed
rate of exchange upon conversion of RM2.5553 equals USD1, on or after 3 November 1994 up to and including 26 September 2004.
The Bonds if not converted, will be redeemed on 3 October 2004 at their principal amount together with accrued interest. The Bonds
may also be redeemed by the Company at anytime on or after 21 October 1999 at their principal amount, plus accrued interest.
MOVEMENTS ON RESERVES AND PROVISIONS
9.
All material transfers to or from reserves or provisions during the year have been disclosed in the financial statements.
181
Directors’ Report
OTHER STATUTORY INFORMATION
10.
Before the financial statements of the Group and of the Company were prepared, the Directors took reasonable steps to:
(a)
ascertain that actions had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts
and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful
debts; and
(b)
ensure that any current assets which were unlikely to be realised at their book value in the ordinary course of business had
been written down to their expected realisable values.
11.
At the date of this report, the Directors are not aware of any circumstances which:
(a)
would render the amounts written off for bad debts or the amount of allowance for doubtful debts in the financial statements
of the Group and of the Company inadequate to any substantial extent or the values attributed to current assets in the financial
statements of the Group and of the Company misleading; and
(b)
have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company
misleading or inappropriate.
12.
In the interval between the end of the year and the date of this report:
(a)
no items, transactions or other events of material and unusual nature has arisen which, in the opinion of the Directors, would
substantially affect the results of the operations of the Group and of the Company for the year in which this report is made;
and
(b)
no charge has arisen on the assets of any company in the Group which secures the liability of any other person nor has any
contingent liability arisen in any company in the Group.
13.
No contingent or other liability of any company in the Group has become enforceable or is likely to become enforceable within the
period of twelve months after the end of the year which, in the opinion of the Directors, will or may affect the ability of the Group
or of the Company to meet their obligations when they fall due.
14.
At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial
statements of the Group and of the Company, which would render any amount stated in the financial statements misleading.
DIRECTORS
15.
The Directors in office since the date of the last report are as follows:
Directors
Alternate Directors
Suriah binti Abd Rahman
Ir. Prabahar N. K. Singam
Lim Kheng Guan
Rosli bin Man
Tan Poh Keat
182
DIRECTORS (continued)
16.
In accordance with Article 103 of the Company’s Articles of Association, the following Directors retire from the Board at the Eighteenth
Annual General Meeting and being eligible offer themselves for re-election:
DIRECTORS’ INTEREST
17.
In accordance with the Register of Directors’ Shareholdings, interest in shares and options over shares in the Company during the
year of the Directors who held office at the end of the year are as follows:
Number of ordinary shares of RM1 each
Balance at
Balance at
1.1.2002
Bought
Sold
31.12.2002
123,500
—
—
123,500
200,000
—
200,000
—
12,000
130,000*
45,000
97,000
– Direct
– Direct
– Direct
– Direct
– Indirect (shares held by spouse)
15,000
—
—
15,000
1,500
—
—
1,500
15,000
—
—
15,000
Tan Poh Keat
– Direct
* Options exercised during the year
Number of options over ordinary shares of RM1 each
Balance at
18.
Balance at
1.1.2002
Granted
Exercised
31.12.2002
—
178,000
—
178,000
130,000
171,000
130,000
171,000
In accordance with the Register of Directors’ Shareholdings, none of the other Directors have any direct or indirect interests in the
shares in the Company and its related corporations during the year. None of the Directors of the Company who held office at the
end of the year have interests in the shares of subsidiary companies.
183
Directors’ Report
DIRECTORS’ BENEFITS
19.
Since the end of the previous year, none of the Directors have received or become entitled to receive any benefit (except for the
Directors’ fees, remuneration and other emoluments as disclosed in note 3 to the financial statements) by reason of a contract made
by the Company or a related corporation with the Director or with a firm of which he is a member or with a company in which he
has a substantial financial interest and any benefit that may deemed to have been received by certain Directors in respect of the
contracts referred to in note 30 to the financial statements.
20.
Neither during nor at the end of the year was the Company or any of its related corporations, a party to any arrangement with the
object(s) of enabling the Directors to acquire benefits by means of the acquisition of shares in, or debentures of the Company or
any other body corporate, other than options granted to the Directors pursuant to ESOS 3.
AUDITORS
21.
The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.
In accordance with a resolution of the Board of Directors dated 27 February 2003.
Chairman
Chief Executive
184
The following accounting policies have been used consistently in dealing with items which are considered material in relation to the financial
statements.
1.
BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
The financial statements of the Group and of the Company have been prepared under the historical cost convention except as
disclosed in the Significant Accounting Policies below.
The financial statements comply with applicable approved accounting standards in Malaysia and the provisions of the Companies Act,
1965. The new applicable approved accounting standards adopted in these financial statements are as follows:
(i)
Retrospective application
Comparative figures have been adjusted or extended to conform with changes in presentation due to the requirements of the
following new MASB standards that have been applied retrospectively:
–
MASB standard 19 “Events After Balance Sheet Date”
–
MASB standard 20 “Provisions, Contingent Liabilities and Contingent Assets”
–
MASB standard 22 “Segment Reporting”
Comparatives have been adjusted or extended to take into account the requirements of MASB standard 19 and 22 as shown in
the respective note 39 and 34 to the financial statements. The presentation of Operating Income was extended to ensure
consistency with Segmental Income as shown in note 2 and note 34 to the financial statements respectively.
There are no changes in accounting policy that affect net profit for the year as a result of the adoption of the above standards
in these financial statements as the Group was already following the recognition and measurement principles in those standards.
(ii)
Prospective application
MASB standard 21
The Group has taken advantage of the exemption provided to apply this standard prospectively.
“Business Combination”
Accordingly, business combinations entered into prior to 1 January 2002 have not been
restated.
MASB standard 23
This standard does not allow retrospective application.
“Impairment of Assets”
MASB standard 24
The Group has taken advantage of the exemption provided to apply this standard prospectively.
“Financial Instruments:
Accordingly, the following presentation and disclosures have been adopted in these financial
Disclosure and Presentation”
statements:
–
classification of compound instrument
The equity and liability components of convertible bonds have not been reclassified as the
bonds were issued prior to 1 January 2002.
–
comparative
As this is the first year application of the standard, as permitted under the standard, no
comparative information for the previous year is presented as such information was not
readily available.
The preparation of financial statements in conformity with the applicable approved accounting standards in Malaysia and the
provisions of the Companies Act, 1965 requires the Directors to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.
185
2.
BASIS OF CONSOLIDATION
The consolidated financial statements include the financial statements of the Company and all its subsidiary companies made up to
the end of the year. Subsidiary companies are those companies in which the Group has power to exercise control over the financial
and operating policies so as to obtain benefits from their activities.
Subsidiary companies are consolidated using the acquisition method of accounting whereby the results of the subsidiary companies
acquired or disposed during the year are included in the Consolidated Income Statement from the date of their acquisition or up to
the date of their disposal. Inter-company transactions and balances are eliminated on consolidation. Where necessary, adjustments
are made to the financial statements of subsidiary companies to ensure consistency with the Group’s accounting policies.
Minority interest is measured at the minorities’ share of the post acquisition fair values of the identifiable assets and liabilities of the
acquiree. Separate disclosure is made of minority interest.
3.
ASSOCIATED COMPANIES
Associated companies are companies in which the Group exercise significant influence. Significant influence is the power to participate
in the financial and operating policy decisions of the associated companies but not control over those policies.
The Group’s share of profits less losses of associated companies is included in the Consolidated Income Statement, and the Group’s
share of post-acquisition retained earnings and reserves are added to the carrying value of investments in the Consolidated Balance
Sheet. These amounts are taken from the audited financial statements made up to a date which is not more than six months before
the date of the Company’s financial statements, or management financial statements made up to the date of the Company’s financial
statements if audited financial statements are not available, for each of the companies concerned. Appropriate adjustments are made
to the associated companies’ financial statements to ensure consistency with the Group’s accounting policies.
4.
GOODWILL
Goodwill represents the excess of the purchase price over the Group’s share of the fair value of the identifiable net assets of
subsidiary and associated companies at the date of acquisition. Goodwill is written off against reserves in the year of acquisition.
5.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.
(i)
Cost
Cost of telecommunication network comprises expenditure up to and including the last distribution point before customers'
premises and includes contractors' charges, materials, direct labour and related overheads. The cost of other property, plant
and equipment comprises their purchase cost and any incidental cost of acquisition.
(ii)
Depreciation
Freehold land is not depreciated as it has an infinite life. Leasehold land is amortised over the periods of the respective leases.
Long term leasehold land has an unexpired lease period of 50 years and above. Other property, plant and equipment are
depreciated on a straight line basis from the time they are available for use so as to write off their cost over their estimated
useful lives.
186
5.
PROPERTY, PLANT AND EQUIPMENT (continued)
(ii)
Depreciation (continued)
The estimated useful lives in years assigned to other property, plant and equipment are as follows:
Telecommunication network
Movable plant and equipment
Computer support systems
Buildings
3
5
3
5
–
–
–
–
20
8
5
40
Depreciation on property, plant and equipment under construction commences when the property, plant and equipment are ready
for their intended use.
In the case of other land mentioned in note 16(a) to the financial statements, pending finalisation with the relevant authorities
as to their tenure, amortisation is provided at an estimated amount of RM0.3 million per annum.
6.
(iii)
Impairment
Where an indication of impairment exists, the carrying amount of property, plant and equipment are assessed and written down
immediately to its recoverable amount.
(iv)
Gains or losses on disposal are determined by comparing proceeds with carrying amount and are included in Income Statement.
INVESTMENTS
Investments in subsidiary and associated companies are stated at cost. Where an indication of impairment exists, the carrying amount
of the investment is assessed and written down immediately to its recoverable amount.
Investments in International Satellite Organisations and other unquoted shares are stated at cost less allowances for permanent
diminution in value. Such allowances for permanent diminution in value is recognised as an expense in the period in which the
diminution is identified.
Investments in shares quoted on the Kuala Lumpur Stock Exchange are stated at the lower of cost and market value, determined on
an aggregate portfolio basis by category of investment. Cost is derived at on the weighted average basis. Market value is calculated
by reference to stock exchange quoted selling prices at the close of business on the balance sheet date. Increase/decrease in the
carrying amount of marketable securities are credited/charged to the Income Statement.
7.
INVENTORIES
Inventories comprise mainly items held for capital projects and maintenance. Inventories are stated at lower of cost and net realisable
value. Cost is determined on a weighted average basis. In arriving at the net realisable value, due allowance is made for all obsolete
and slow moving items.
8.
TRADE RECEIVABLES
Trade receivables are carried at anticipated realisable value. Bad debts are written off and specific allowances are made for trade
receivables considered to be doubtful of collection. In addition, a general allowance based on a percentage of trade receivables is
made to cover possible losses which are not specifically identified.
9.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash in hand, bank balances, demand deposits and bank overdrafts. Cash equivalents are short
term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to insignificant risk of
change in value.
187
10.
BONDS, NOTES AND DEBENTURES
Bonds, notes and debentures, issued by the Company are stated at the net proceeds received on issue. The finance costs which
represent the difference between the net proceeds and the total amount of the payments of these borrowings are allocated to periods
over the term of the borrowings at a constant rate on the carrying amount and are charged to the Income Statement.
For Convertible Bonds, the amount recognised in shareholders funds in respect of shares issued upon conversion will be the amount
at which the liability for the Bonds is stated as at the date of conversion. The excess of the conversion amount over the nominal
value of share is treated as share premium. No gain or loss will be recognised on conversion.
11.
DEFERRED TAXATION
Provision is made for deferred taxation, using the liability method, on all material timing differences except where it is considered
reasonably probable that the tax effect of such deferrals will continue in the foreseeable future.
12.
OPERATING LEASES
Leases of assets where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as
operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the Income
Statement on the straight line basis over the lease period.
When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way
of penalty is recognised as an expense in the period in which termination takes place.
13.
INCOME RECOGNITION
Operating income represents revenue earned from the sale of products and rendering of services net of returns, duties, sales
discounts and sales taxes paid, after eliminating income within the Group. Operating income is recognised or accrued at the time of
the provision of the products or services.
Dividend income from investment in subsidiary companies, associated companies and other investments is recognised when a right
to receive payment is established.
Finance income includes income from deposits with licensed banks, finance companies, other financial institutions and staff loans, is
recognised on an accrual basis.
14.
FINANCE COST
Cost incurred in connection with financing the construction and installation of property, plant and equipment is capitalised until the
property, plant and equipment are ready for their intended use. All other finance cost is charged out to the Income Statement.
15.
FOREIGN CURRENCY
Foreign currency transactions are accounted for at exchange rates prevailing at the transaction dates. Foreign currency monetary
assets and liabilities are translated at exchange rates prevailing at the balance sheet date. Exchange differences arising from the
settlement of foreign currency transactions and from the translation of foreign currency monetary assets and liabilities are included
in the Income Statement.
Income Statements of foreign subsidiary/associated companies are translated into Ringgit Malaysia at average exchange rates for the
period and the Balance Sheets are translated at the closing rate of exchange prevailing at the balance sheet date. Exchange differences
arising from the translation of the foreign subsidiary/associated companies financial statements are reflected in the Exchange
Fluctuation Reserve. On disposal of the foreign subsidiary/associated companies, such translation differences are recognised in the
Income Statement as part of the gain or loss on disposal.
188
15.
FOREIGN CURRENCY (continued)
Goodwill and fair value adjustments arising on the acquisition of foreign subsidiary/associated companies are translated at the
exchange rate prevailing at the date of transaction.
All other exchange gains or losses are dealt with through the Income Statement.
The principal closing rates (units of Malaysian Ringgit per foreign currency) used in translating significant balances at year end are
as follows:
Foreign Currency
16.
2002
2001
Foreign Currency
2002
2001
US Dollar
RM3.80000
RM3.80000
Sri Lanka Rupee
RM0.03940
RM0.04093
Japanese Yen
RM0.03198
RM0.02885
South African Rand
RM0.44471
RM0.31746
Guinea Franc
RM0.00193
RM0.00194
Special Drawing Rights
RM5.16620
RM4.77580
Bangladesh Taka
RM0.06592
RM0.06702
FINANCIAL INSTRUMENTS
(i)
Financial Instruments Recognised on the Balance Sheet
The particular recognition and measurement method for financial instruments recognised on the balance sheet is disclosed in
the individual policy statements associated with each item.
(ii)
Financial Instruments Not Recognised on the Balance Sheet
The financial derivative hedging instruments are used in the Group’s risk management of foreign currency and interest rate
exposures of its financial liabilities. Hedge accounting principles are applied for the accounting of the underlying exposures and
their hedge instruments. These hedge instruments are not recognised in the financial statements on inception. The underlying
foreign currency liabilities are translated at their respective hedged exchange rate, and differential interest receipts and payments
arising from interest rate derivative instruments are accrued, so as to match the net differential with the related expenses on
the hedged liabilities.
Exchange gains and losses relating to hedge instruments are recognised in the Income Statement in the same period as the
exchange differences on the underlying hedged items. No amounts are recognised in respect of future periods.
(iii) Fair Value Estimation for Disclosure Purposes
The fair value of publicly traded financial instruments is based on quoted market prices at the balance sheet date.
In assessing the fair value of non-traded financial instruments, the Group uses a variety of methods and makes assumptions
that are based on market conditions existing at each balance sheet date. Quoted market prices are used if available or other
techniques, such as estimated discounted value of future cash flows, are used to determine fair value. In particular, the fair
value of financial liabilities is estimated by discounting the future contractual cash flows at the current market interest rate
available to the Group for similar financial instruments.
The fair value of financial derivative instruments is calculated as the present value of the estimated future cash flows.
The carrying value for financial assets and liabilities with a maturity of less than one year are assumed to approximate their
fair value.
These accounting policies form an integral part of the financial statements set out on pages 190 to 241.
189
Income Statements
The Group
All amounts are in millions unless
Note
otherwise stated
The Company
2002
2001
2002
2001
RM
RM
RM
RM
OPERATING INCOME
2
9,834.1
9,673.2
7,977.1
7,907.8
OPERATING COSTS
3
(8,115.1)
(7,839.3)
(7,829.7)
(6,365.7)
1,719.0
1,833.9
147.4
1,542.1
112.5
137.0
291.4
305.9
1,831.5
1,970.9
438.8
1,848.0
OPERATING PROFIT
OTHER OPERATING INCOME
4
OPERATING PROFIT BEFORE FINANCE COST
NET FINANCE COST
5
(303.9)
(398.9)
(365.3)
(452.5)
– share of profits less losses
– profit on disposal
PROFIT BEFORE TAXATION
42.5
43.8
—
—
—
827.8
—
—
1,570.1
2,443.6
73.5
1,395.5
TAXATION
– the company and subsidiary companies
6
(454.4)
(569.3)
– share of taxation of associated companies
6
(33.0)
(38.5)
PROFIT/(LOSS) AFTER TAXATION
1,082.7
MINORITY INTERESTS
(26.4)
1,835.8
(23.9)
(399.7)
—
(326.2)
—
(536.9)
—
858.6
—
PROFIT/(LOSS) FOR THE YEAR
ATTRIBUTABLE TO SHAREHOLDERS
1,056.3
1,811.9
(326.2)
858.6
EARNINGS PER SHARE (sen)
– basic
7
33.5
58.6
– diluted
7
33.3
58.4
– final
8
10.0
10.0
– special
8
—
5.0
DIVIDENDS PER SHARE (sen)
The above Income Statements are to be read in conjunction with the Significant Accounting Policies on pages 185 to 189 and the Notes
to the Financial Statements on pages 195 to 241.
Report of the Auditors – Page 243.
190
Balance Sheets
as at 31 Decemb e r 2 0 0 2
The Group
Note
2002
2001
2002
2001
RM
RM
RM
RM
3,103.5
2,065.0
(383.2)
10,381.8
3,167.0
2,536.5
—
11,127.5
3,103.5
2,065.0
—
11,795.3
15,245.3
225.7
15,167.1
175.8
16,831.0
—
16,963.8
—
1,361.6
4,826.9
704.5
56.7
—
1,358.2
5,349.8
690.2
26.9
318.7
1,361.6
4,997.0
614.4
—
—
1,358.2
5,493.0
614.3
—
317.4
6,949.7
7,743.8
6,973.0
7,782.9
22,420.7
23,086.7
23,804.0
24,746.7
16
17
18
19
20
19,566.5
—
1,539.0
139.6
685.4
18,926.7
—
1,066.5
105.5
657.8
15,251.0
6,993.5
96.4
98.3
684.6
16,010.8
4,891.6
22.0
98.3
657.0
21
22
23
24
172.5
3,592.0
197.7
1,821.0
153.4
3,735.6
222.5
2,520.1
105.7
2,942.2
197.7
1,138.2
95.5
3,535.2
222.5
2,110.5
5,783.2
6,631.6
4,383.8
5,963.7
3,596.7
1,474.2
222.1
3,268.5
366.7
666.2
2,576.5
920.4
206.7
2,249.9
4.6
642.2
5,293.0
4,301.4
3,703.6
2,896.7
490.2
2,330.2
680.2
3,067.0
22,420.7
23,086.7
23,804.0
24,746.7
otherwise stated
SHARE CAPITAL
SHARE PREMIUM
EXCHANGE FLUCTUATION RESERVES
RETAINED PROFITS
9
10
10
TOTAL CAPITAL AND RESERVES
MINORITY INTERESTS
Convertible Bonds
Borrowings
Customers’ deposits
Deferred taxation
Retirement benefits
11
12
13
14
15
DEFERRED AND LONG TERM LIABILITIES
SUBSIDIARY COMPANIES
INVESTMENTS
LONG TERM RECEIVABLES
Inventories
Trade and other receivables
Short term investments
Cash and cash equivalents
CURRENT ASSETS
Trade and other payables
Borrowings
Taxation
CURRENT LIABILITIES
NET CURRENT ASSETS
The Company
25
12
3,167.0
2,536.5
(307.1)
9,848.9
The above Balance Sheets are to be read in conjunction with the Significant Accounting Policies on pages 185 to 189 and the Notes to
the Financial Statements on pages 195 to 241.
191
Consolidated Statement of Changes in Equity
Issued and Fully Paid
of RM1 each
All amounts are in millions
unless otherwise stated
At 1 January 2002
– as previously reported
– prior year adjustment
Special Share*/Ordinary Shares
Number of
Nominal
Note
Shares
Value
RM
Share
Premium
RM
Distributable
Exchange
Fluctuation
Reserves
RM
Retained
Profits
RM
Total
RM
3,103.5
—
3,103.5
—
2,065.0
—
(383.2)
—
10,038.6
343.2
14,823.9
343.2
3,103.5
3,103.5
2,065.0
(383.2)
10,381.8
15,167.1
Goodwill written off
Exchange Fluctuation Reserves
—
—
—
—
—
—
—
76.1
(1,247.6)
—
(1,247.6)
76.1
Net loss not recognised in
income statement
—
—
—
76.1
(1,247.6)
(1,171.5)
—
—
—
—
1,056.3
1,056.3
—
—
—
—
63.5
63.5
471.5
—
3,167.0
3,167.0
2,536.5
3,087.3
—
3,087.3
—
3,087.3
Exchange Fluctuation Reserves
Net loss not recognised in
income statement
39
– as restated
Profit for the year
Dividends paid for year ended
– 31.12.2001
Issue of shares
– exercise of share options
8
At 31 December 2002
At 1 January 2001
39
– as restated
Profit for the year
– 31.12.2000
Issue of shares
At 31 December 2001
*
Non-distributable
8
(341.6)
(341.6)
—
535.0
(307.1)
9,848.9
15,245.3
1,940.3
—
(174.2)
—
8,569.1
223.2
13,422.5
223.2
3,087.3
1,940.3
(174.2)
8,792.3
13,645.7
—
—
—
(209.0)
—
(209.0)
—
—
—
(209.0)
—
(209.0)
—
—
—
—
—
—
—
—
16.2
16.2
124.7
—
3,103.5
3,103.5
2,065.0
(383.2)
1,811.9
(222.4)
1,811.9
(222.4)
—
140.9
10,381.8
15,167.1
Issued and fully paid shares include the Special Rights Redeemable Preference Share (Special Share) of RM1. Refer to note 9 to the
financial statements for details of the terms and rights attached to Special Share.
The above Consolidated Statement of Changes in Equity is to be read in conjunction with the Significant Accounting Policies on pages 185
to 189 and the Notes to the Financial Statements on pages 195 to 241.
192
Statement of Changes in Equity
Issued and Fully Paid
of RM1 each
All amounts are in millions
unless otherwise stated
At 1 January 2002
Special Share*/Ordinary Shares
Number of
Nominal
Note
Shares
Value
RM
39
– as restated
Loss for the year
– 31.12.2001
Issue of shares
8
At 31 December 2002
At 1 January 2001
39
– as restated
Profit for the year
– 31.12.2000
Issue of shares
At 31 December 2001
*
8
Nondistributable
Distributable
Share
Premium
RM
Retained
Profits
RM
Total
RM
3,103.5
—
3,103.5
—
2,065.0
—
11,452.1
343.2
16,620.6
343.2
3,103.5
3,103.5
2,065.0
11,795.3
16,963.8
—
—
—
(326.2)
(326.2)
—
—
—
(341.6)
(341.6)
63.5
63.5
471.5
—
535.0
3,167.0
3,167.0
2,536.5
11,127.5
16,831.0
3,087.3
—
3,087.3
—
1,940.3
—
10,935.9
223.2
15,963.5
223.2
3,087.3
3,087.3
1,940.3
11,159.1
16,186.7
—
—
—
858.6
858.6
—
—
—
(222.4)
(222.4)
16.2
16.2
124.7
—
140.9
3,103.5
3,103.5
2,065.0
11,795.3
16,963.8
Issued and fully paid shares include the Special Rights Redeemable Preference Share (Special Share) of RM1. Refer to note 9 to the
financial statements for details of the terms and rights attached to Special Share.
The above Statement of Changes in Equity is to be read in conjunction with the Significant Accounting Policies on pages 185 to 189 and
the Notes to the Financial Statements on pages 195 to 241.
193
Cash Flow Statements
The Group
Note
otherwise stated
The Company
2002
2001
2002
2001
RM
RM
RM
RM
CASH FLOWS FROM OPERATING ACTIVITIES
26
3,223.4
3,283.2
2,584.6
2,749.2
CASH FLOWS USED IN INVESTING ACTIVITIES
27
(4,725.6)
(1,688.6)
(4,095.2)
(1,168.0)
CASH FLOWS FROM/(USED IN) FINANCING
ACTIVITIES
28
809.8
(1,285.8)
538.3
(1,400.3)
NET (DECREASE)/INCREASE IN CASH AND
CASH EQUIVALENTS
(692.4)
EFFECT OF EXCHANGE RATE CHANGES
(6.7)
308.8
(4.4)
(972.3)
180.9
—
—
CASH AND CASH EQUIVALENTS AT
BEGINNING OF THE YEAR
2,520.1
2,215.7
2,110.5
1,929.6
1,821.0
2,520.1
1,138.2
2,110.5
AT END OF THE YEAR
24
The above Cash Flow Statements are to be read in conjunction with the Significant Accounting Policies on pages 185 to 189 and the Notes
to the Financial Statements on pages 195 to 241.
194
All amounts are in millions unless otherwise stated
1.
PRINCIPAL ACTIVITIES
The principal activities of the Company during the year are the establishment, maintenance and provision of telecommunication and
related services under the licence issued by the Minister of Energy, Communications and Multimedia. The principal activities of the
subsidiary companies are set out in note 17 to the financial statements. There have been no significant change in the nature of these
activities during the year.
2.
OPERATING INCOME
The Group
The Company
2002
RM
2001
RM
2002
RM
2001
RM
650.7
789.9
513.3
745.6
652.3
788.6
517.1
744.0
Sub Total
1,440.6
1,258.9
1,440.9
1,261.1
Calls/Usage
Business
Residential
2,884.4
1,900.7
3,043.5
2,032.0
2,904.1
1,879.3
3,102.1
1,984.6
Sub Total
4,785.1
5,075.5
4,783.4
5,086.7
Others
Business
Residential
123.5
79.6
81.7
84.3
131.6
78.9
93.2
84.0
Sub Total
203.1
166.0
210.5
177.2
Total
Business
Residential
3,658.6
2,770.2
3,638.5
2,861.9
3,688.0
2,746.8
3,712.4
2,812.6
Total Fixed Line
6,428.8
6,500.4
6,434.8
6,525.0
812.8
394.5
395.4
809.6
296.9
304.8
1,120.0
126.7
264.5
1,008.0
144.9
216.9
Total fixed line, data, internet and multimedia
and other telecommunication related services
8,031.5
7,911.7
7,946.0
7,894.8
Cellular
Non-telecommunication related services
1,588.9
213.7
1,494.6
266.9
31.1
—
13.0
—
TOTAL OPERATING INCOME
9,834.1
9,673.2
7,977.1
7,907.8
Rentals
Business
Residential
Data services
Other telecommunication related services
195
3.
OPERATING COSTS
The Group
The Company
2002
2001
2002
2001
RM
RM
RM
RM
564.4
869.5
322.2
423.1
—
84.3
—
—
33.7
20.3
33.7
20.3
12.6
Allowance for bad and doubtful debts
(net of bad debt recoveries)
Allowance for impairment losses of property,
plant and equipment
Allowance for diminution in value of quoted
investment
Allowance for diminution in value of investment
in an International Satellite Organisation
—
12.6
—
251.9
215.0
88.9
84.4
Depreciation of property, plant and equipment
2,481.8
2,377.6
2,088.3
2,087.2
Domestic and international outpayment
1,209.0
1,032.2
1,176.4
1,014.9
Manpower
1,307.7
1,216.9
1,044.4
972.1
323.9
326.7
292.1
242.3
Charges and commissions
Maintenance
Net (gain)/loss on foreign exchange – Realised
(5.6)
1.7
(5.6)
(0.4)
Net loss/(gain) on foreign exchange – Unrealised
102.3
(79.3)
89.8
(103.5)
Rental – land and buildings
102.3
109.0
100.9
102.2
Rental – equipment
11.8
20.3
23.6
26.1
Rental – others
79.6
89.6
45.8
80.1
(20.7)
60.9
(21.7)
60.2
Retirement benefits (sub-note a)
Research and development
—
—
21.8
24.3
Supplies and inventories
342.7
324.7
237.5
241.3
Universal Service Provision (USP)
230.5
—
209.2
—
Utilities
164.0
167.9
137.4
137.8
—
—
1,074.4
406.1
—
—
316.0
—
Waiver of/allowance for loans and advances
to subsidiary companies
Write down of investment in a subsidiary company
Write off of property, plant and equipment
Other operating costs
TOTAL OPERATING COSTS
196
50.9
9.5
50.9
4.7
884.9
979.9
503.7
529.9
8,115.1
7,839.3
7,829.7
6,365.7
3.
OPERATING COSTS (continued)
The Group
Other operating costs include:
Audit fees
– current year
Directors of the Company
– fees
– remuneration and other emoluments
The Company
2002
RM
2001
RM
2002
RM
2001
RM
1.2
1.1
0.4
0.4
0.5
1.2
0.3
0.9
0.3
1.0
0.2
0.8
(a)
The Retirement Benefit Scheme was discontinued with effect from 31 December 2000. During the year, the retirement benefit
liabilities have been remitted to Employees’ Provident Fund. The current year credit represents the excess of the book provision
over the actual retirement benefit liabilities and was reversed accordingly.
(b)
Estimated money value of benefits of Directors amounted to RM44,500 (2001: RM57,600) for the Company and RM109,480
(2001: RM57,600) for the Group.
(c)
Options granted to Executive Directors of the Company pursuant to Employees’ Share Option Scheme (ESOS 3) during the year
are as follows:
Granted during
the year ended
31.12.2002
31.12.2001
178,000
171,000
200,000
130,000
Unexercised
options at year end
31.12.2002
31.12.2001
178,000
171,000
—
130,000
The options were given to these Directors on the same terms and conditions as those offered to other employees of the
Company and its subsidiary companies (Note 9(c)).
4.
OTHER OPERATING INCOME
The Group
Dividend income from subsidiary companies
Dividend income from quoted shares
Dividend income from unquoted shares
Income from investment in International
Satellite Organisations
Interest from subsidiary companies
Profit/(loss) on disposal of short term
investments
Profit/(loss) on partial disposal of subsidiary
companies
Profit on disposal of property, plant and
equipment
Rental income from buildings
Rental income from vehicles
Sale of scrap stores
Others
TOTAL OTHER OPERATING INCOME
The Company
2002
RM
2001
RM
2002
RM
2001
RM
—
4.0
1.5
—
2.6
1.1
26.4
3.8
1.5
34.7
2.3
1.1
0.5
—
5.4
—
0.5
87.0
5.4
153.4
3.8
(2.3)
3.8
(2.3)
2.8
8.7
—
(1.5)
18.2
6.5
0.1
4.1
71.0
26.0
6.0
1.2
5.0
83.3
80.8
25.8
3.1
4.0
54.7
27.5
14.4
3.2
4.9
62.8
112.5
137.0
291.4
305.9
197
5.
NET FINANCE COST
2002
Foreign
RM
Domestic
RM
Islamic
Principles
RM
Total
RM
Foreign
RM
Domestic
RM
Islamic
Principles
RM
Total
RM
Finance cost in respect of:
Borrowings
Convertible Bonds
263.2
54.7
91.1
—
28.0
—
382.3
54.7
335.7
54.7
130.5
—
30.9
—
497.1
54.7
Total finance cost
Finance income
317.9
—
91.1
(49.5)
28.0
(22.2)
437.0
(71.7)
390.4
—
130.5
(76.9)
30.9
(22.4)
551.8
(99.3)
317.9
41.6
5.8
365.3
390.4
53.6
8.5
452.5
5.8
(53.5)
0.3
(47.4)
5.9
(50.6)
0.2
(44.5)
(3.9)
(4.7)
(5.4)
(14.0)
(0.8)
(4.1)
(4.2)
(9.1)
(16.6)
0.7
303.9
(1.1)
4.5
NET FINANCE COST OF
THE COMPANY
Finance cost of subsidiary
companies
Finance income of
subsidiary companies
TOTAL NET FINANCE
COST OF THE GROUP
6.
2001
319.8
395.5
398.9
TAXATION
The Group
The taxation charge for the Group and
Company comprise:
Malaysia
Current year taxation
In respect of prior year
Deferred taxation
Overseas
Current year taxation
In respect of prior year
Deferred taxation
The Company
2002
RM
2001
RM
2002
RM
2001
RM
417.9
1.2
21.4
551.8
0.1
2.5
399.7
—
—
536.9
—
—
440.5
554.4
399.7
536.9
0.9
4.1
8.9
5.9
(0.4)
9.4
—
—
—
—
—
—
13.9
14.9
—
—
Share of taxation of associated companies
454.4
33.0
569.3
38.5
399.7
—
536.9
—
TOTAL TAXATION
487.4
607.8
399.7
536.9
The effective rate of taxation for the Company is higher than the statutory rate principally due to non-tax deductible expenses which
comprise mainly waiver of loan and write down of investment in a subsidiary company.
The effective rate of taxation for the Group is slightly higher than the statutory rate due to losses of certain subsidiary companies
which for tax purposes were not available for set off against taxable profits of other companies within the Group and certain expenses
which were not deductible for tax purposes.
198
7.
EARNINGS PER SHARE
(a)
Basic earnings per share
Basic earnings per share of the Group is calculated by dividing the net profit attributable to shareholders by the weighted
average number of ordinary shares in issue during the year.
The Group
2002
2001
Net profit attributable to shareholders (RM million)
1,056.3
1,811.9
Weighted average number of ordinary shares in issue (million)
3,155.3
3,091.6
33.5
58.6
Basic earnings per share (sen)
(b)
Diluted earnings per share
For the diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion
of all dilutive potential ordinary shares. For this purpose, the Convertible Eurobonds due 2004 is not included as it is nondilutive potential ordinary shares for the financial year ended 31 December 2002. It is deemed non-dilutive since the exercise
price is higher than the fair value of the Company’s share for the financial year ended 31 December 2002. ESOS 2, Phase 1
and Phase 2 are also not included as they have already expired on 15 April 2002.
For ESOS 3 (new ESOS offered during the year), a calculation is done to determine the number of shares that could have been
acquired at market price (determined as the average annual share price of the Company’s shares) based on the monetary value
of the subscription rights attached to outstanding share options. This calculation serves to determine the unexercised shares to
be added to the ordinary shares outstanding for the purpose of computing the dilution. No adjustment is made to net profit
attributable to shareholders for the share options calculation.
For details of the Employees’ Share Option Scheme, please refer to note 9(c) to the financial statements.
The Group
2002
2001
Net profit attributable to shareholders (RM million)
1,056.3
1,811.9
Weighted average number of ordinary shares in issue (million)
3,155.3
3,091.6
19.5
11.3
3,174.8
3,102.9
33.3
58.4
Adjustment for ESOS 3 (2001: ESOS 2, Phase 2) (million)
Weighted average number of ordinary shares for diluted earnings per share
(million)
Diluted earnings per share (sen)
199
8.
DIVIDENDS
The Company
2002
2001
RM
RM
Final gross dividend of 10.0 sen per share less tax of 28% for 2001/2000
227.7
222.4
Special gross dividend of 5.0 sen per share less tax of 28% for 2001
113.9
—
TOTAL DIVIDENDS
341.6
222.4
At the forthcoming Annual General Meeting on 20 May 2003, a final gross dividend of 10.0 sen per share less tax of 28% amounting
to RM228.0 million will be proposed for shareholders’ approval. These financial statements do not reflect this final dividend which
will only be accrued as a liability when approved by shareholders. This represents a change in accounting treatment from that of
prior years as explained in note 39 to the financial statements.
9.
SHARE CAPITAL
The Company
2002
2001
RM
RM
5,000.0
5,000.0
—
—
3,167.0
3,103.5
—
—
3,167.0
3,103.5
Authorised:
Ordinary shares of RM1 each
Special share of RM1 (sub-note a)
Issued and fully paid:
Ordinary shares of RM1 each
Special share of RM1 (sub-note a)
TOTAL ISSUED AND FULLY PAID-UP SHARE CAPITAL
(a)
The Special Rights Redeemable Preference Share (Special Share) of RM1 would enable the Government through the Minister
of Finance to ensure that certain major decisions affecting the operations of the Company are consistent with the Government’s
policy. The Special Shareholder, which may only be the Government or any representative or person acting on its behalf, is
entitled to receive notices of meetings but does not carry any right to vote at such meetings of the Company. However, the
Special Shareholder is entitled to attend and speak at such meetings.
Certain matters, in particular, the alteration of the Articles of Association of the Company relating to the rights of the Special
Shareholder, the dissolution of the Company, any substantial acquisitions and disposal of assets, amalgamation, merger and
takeover, require the prior consent of the Special Shareholder.
The Special Shareholder has the right to require the Company to redeem the Special Share at par at any time. In a distribution
of capital in a winding-up of the Company, the Special Shareholder is entitled to the repayment of the capital paid-up on the
Special Share in priority to any repayment of capital to any other member. The Special Share does not confer any right to
participate in the capital or profits of the Company.
200
9.
SHARE CAPITAL (continued)
(b)
During the year, the issued and fully paid-up share capital of the Company was increased by the issuance of 57,500, 58,785,500
and 4,658,000 ordinary shares of RM1 each at the option price of RM10.50, RM8.53 and RM7.09 per share respectively for
cash under ESOS 2 and ESOS 3 respectively. These shares rank “pari-passu” in all respects with the existing issued ordinary
shares of the Company.
(c)
ESOS
An Employees’ Share Option Scheme 2 (ESOS 2) was approved by the shareholders at an Extraordinary General Meeting held
on 28 March 1997. In that year, options to subscribe for 217,704,000 ordinary shares of RM1 each at the exercise price of
RM10.50 per share were granted to eligible Executives and Non-Executives of the Company (referred to as ESOS 2, phase 1).
On 31 July 2001, options to subscribe for 89,536,000 ordinary shares of RM1 each under ESOS 2 were granted to eligible
Executives and Non-Executives of the Company at an exercise price of RM8.53 per share (referred to as ESOS 2, phase 2).
ESOS 2, phase 1 and phase 2 lapsed on 15 April 2002.
A new Employees’ Share Option Scheme 3 (ESOS 3) was approved by the shareholders at an Extraordinary General Meeting
held on 21 May 2002. On 1 August 2002, options to subscribe for 259,014,000 ordinary shares of RM1 each under ESOS 3
were granted to eligible Executives and Non-Executives of the Company and its subsidiary companies at an exercise price of
RM7.09 per share.
The principal features of ESOS 3 are summarised in paragraph 6 of the Directors’ Report.
The movement during the year in the number of options over the ordinary shares of RM1 each of the Company are as follows:
ESOS 3
ESOS 2
2002
ESOS 2
2002
2001
Phase 2
Phase 1
Phase 2
Phase 1
Million
Million
Million
Million
Million
—
74.8
127.1
—
128.6
259.0
—
—
89.5
—
—
(14.7)
(1.5)
The Company
At 1 January
Offered
Exercised (sub-note b)
(4.7)
(58.8)
Lapsed
(0.1)
(16.0)
At 31 December
254.2
—
(127.1)
—
—
—
74.8
127.1
At 31 December 2002, options to subscribe for 254,208,000 ordinary shares of RM1 each at the option price of RM7.09 per
share under ESOS 3 remained unexercised. These options remain in force until 31 July 2007. These options granted do not
confer any right to participate in any share issue of any other company.
201
10.
RESERVES
The Group
Retained Profits
The Company
2002
2001
2002
2001
RM
RM
RM
RM
9,848.9
10,381.8
11,127.5
11,795.3
—
—
11,127.5
11,795.3
Exchange Fluctuation Reserves arising from
translation of foreign subsidiary/associated
companies
TOTAL RESERVES
(307.1)
9,541.8
(383.2)
9,998.6
Subject to agreement with the Inland Revenue Board, the Company has sufficient tax credit under Section 108 of the Income Tax
Act, 1967 and tax exempt income under Section 8 of the Income Tax (Amendment) Act, 1999 at 31 December 2002 to frank the
payment of net dividends of approximately RM9,266.3 million (2001: RM8,422.1 million) out of total distributable reserves of
RM11,127.5 million (2001: RM11,795.3 million) without incurring additional taxation.
11.
CONVERTIBLE BONDS
(a)
Convertible Bonds represent USD359.9 million (2001: USD359.9 million) Convertible Eurobonds due 2004.
(b)
The principle features of the Eurobonds are as follows:
(i)
Unless previously redeemed or purchased and cancelled, the Bonds are convertible on or after 3 November 1994 up to
and including 26 September 2004 into fully paid ordinary shares of RM1 each of the Company at an initial conversion
price of RM15.60 per ordinary share and with a fixed rate of exchange on conversion of RM2.5553 equals USD1.
(ii)
Unless previously redeemed, purchased and cancelled or converted, each Bond will be redeemed on 3 October 2004 at
its principal amount together with accrued interest. The Bonds may also be redeemed, in whole or in part, by the Company
at any time on or after 21 October 1999 at their principal amount, plus accrued interest.
(iii)
The Bonds bear interest rate of 4% per annum payable semi-annually in arrears in equal instalments on 31 March and
30 September in each year during the tenure and on the date of maturity. Any Bonds converted will cease to carry interest
as from the last interest payment date immediately preceding the date of conversion.
(iv)
(c)
202
The Bonds constitute, subject to the negative pledge, unsecured obligations of the Company.
None of the remaining Bonds have been redeemed, purchased or cancelled during the financial year.
12.
BORROWINGS
THE GROUP
2002
2001
Weighted
Weighted
Average
Long
Short
Average
Long
Short
Rate of
Term
Term
Total
Rate of
Term
Term
Total
Finance
RM
RM
RM
Finance
RM
RM
RM
6.65%
91.7
3.3
95.0
6.65%
100.4
2.7
103.1
6.65%
91.7
3.3
95.0
6.65%
100.4
2.7
103.1
3.92%
627.6
659.4
1,287.0
4.42%
686.4
349.3
1,035.7
5.56%
689.0
7.3
696.3
5.69%
489.0
6.6
495.6
4.49%
1,316.6
666.7
1,983.3
4.83%
1,175.4
355.9
1,531.3
4.59%
1,408.3
670.0
2,078.3
4.95%
1,275.8
358.6
1,634.4
5.99%
85.1
12.0
97.1
6.54%
67.7
—
67.7
2.95%
2.7
5.7
8.4
3.83%
8.4
6.2
14.6
5.75%
87.8
17.7
105.5
6.06%
76.1
6.2
82.3
7.28%
2,643.0
—
2,643.0
7.32%
2,623.0
—
2,623.0
3.08%
644.4
780.8
1,425.2
5.48%
1,343.1
—
1,343.1
4.18%
43.4
5.7
49.1
5.26%
31.8
1.9
33.7
5.79%
3,330.8
786.5
4,117.3
6.69%
3,997.9
1.9
3,999.8
Total Foreign
5.79%
3,418.6
804.2
4,222.8
6.67%
4,074.0
8.1
4,082.1
TOTAL BORROWINGS
5.39%
4,826.9
1,474.2
6,301.1
6.18%
5,349.8
366.7
5,716.5
DOMESTIC
Secured
– Cagamas Loans (sub-note a)
Unsecured
– Borrowings from financial
institutions
– Borrowings under Islamic
Banking facilities
Total Domestic
FOREIGN
Secured
institutions (sub-note b)
– Other borrowings (sub-note b)
Unsecured
– Notes and Debentures
(sub-note c)
institutions
– Other borrowings
203
12.
BORROWINGS (continued)
2002
The Group’s long term
borrowings are repayable
as follows:
After one year and up to
five years
After five years and up to
ten years
After ten years and up to
fifteen years
After fifteen years (sub-note d)
THE COMPANY
Domestic
RM
Foreign
RM
Total
RM
Domestic
RM
Foreign
RM
Total
RM
641.5
858.8
1,500.3
467.5
1,627.1
2,094.6
243.0
1,796.5
2,039.5
284.5
1,702.8
1,987.3
—
523.8
20.2
743.1
20.2
1,266.9
—
523.8
1.5
742.6
1.5
1,266.4
1,408.3
3,418.6
4,826.9
1,275.8
4,074.0
5,349.8
2002
2001
Total
RM
Weighted
Average
Rate of
Finance
Long
Term
RM
Short
Term
RM
Total
RM
3.3
95.0
6.65%
100.4
2.7
103.1
91.7
3.3
95.0
6.65%
100.4
2.7
103.1
7.29%
1,000.0
155.0
1,155.0
8.00%
1,000.0
—
1,000.0
5.59%
689.0
—
689.0
5.72%
489.0
—
489.0
6.65%
1,689.0
155.0
1,844.0
7.25%
1,489.0
—
1,489.0
Total Domestic
6.65%
1,780.7
158.3
1,939.0
7.21%
1,589.4
2.7
1,592.1
FOREIGN
Unsecured
– Notes and Debentures
(sub-note c)
institutions
– Other borrowings
7.28%
2,643.0
—
2,643.0
7.32%
2,623.0
—
2,623.0
2.62%
2.65%
554.1
19.2
760.0
2.1
1,314.1
21.3
5.70%
2.65%
1,261.2
19.4
—
1.9
1,261.2
21.3
Total Foreign
5.71%
3,216.3
762.1
3,978.4
6.77%
3,903.6
1.9
3,905.5
TOTAL BORROWINGS
6.02%
4,997.0
920.4
5,917.4
6.90%
5,493.0
4.6
5,497.6
DOMESTIC
Secured
– Cagamas Loans (sub-note a)
Unsecured
institutions
– Borrowings under Islamic
Banking facilities
204
2001
Weighted
Average
Rate of
Finance
Long
Term
RM
Short
Term
RM
6.65%
91.7
6.65%
12.
2002
2001
Domestic
Foreign
Total
Domestic
Foreign
Total
RM
RM
RM
RM
RM
RM
537.7
770.6
1,308.3
304.9
1,510.3
1,815.2
243.0
1,701.3
1,944.3
284.5
1,649.2
1,933.7
The Company’s long term
borrowings are repayable
as follows:
After one year and up to
five years
After five years and up to
ten years
After ten years and up to
fifteen years
After fifteen years (sub-note d)
—
1.3
1.3
—
1.5
1.5
1,000.0
743.1
1,743.1
1,000.0
742.6
1,742.6
1,780.7
3,216.3
4,997.0
1,589.4
3,903.6
5,493.0
The currency exposure profile of borrowings is as follows:
The Group
The Company
2002
2002
RM
RM
– Ringgit Malaysia
2,078.3
1,939.0
– US Dollar
3,345.8
3,208.5
– Japanese Yen
757.2
757.2
– Other currencies
119.8
12.7
6,301.1
5,917.4
(a)
This represents borrowings from Cagamas Berhad secured by way of assignment of the titles of properties relating to staff
housing loans.
(b)
Secured by way of fixed and floating charge on property, plant and equipment of certain subsidiary companies (note 16 to the
financial statements).
(c)
Consists of USD200.0 million 7.125% Notes due 2005, USD300.0 million 7.875% Debentures due 2025 and USD300.0 million
8.0% Guaranteed Notes due 2010.
(d)
The Group and the Company have the option to prepay the total domestic loan outstanding of RM523.8 million (2001: RM523.8
million) and RM1,000.0 million (2001: RM1,000.0 million) respectively in 2004.
205
12.
(e)
Long Dated Swap
Underlying Liability
USD300.0 million 7.875% Debentures Due 2025
In 1998, the Company entered into a long dated swap, which will mature on 1 August 2025.
Hedging Instrument
The Company made a payment of USD5.0 million and is obliged to pay fixed amounts of JPY209.9 million semi-annually on
each 1 February and 1 August, up to and including 1 August 2025.
Prior to 1 February 2004, the counter-party is not obliged to agree to any request by the Company to terminate the transaction.
Commencing from 1 February 2004, the Company has the right to terminate the transaction at a rate mutually agreed with the
counter-party. However, the Company intends to hold the contract to maturity.
On 1 August 2025, the Company will receive RM750.0 million from the counter-party. These proceeds will be swapped for
USD300.0 million at a pre-determined exchange rate of RM2.5 to USD1.0, which will be used for the repayment of the
USD300.0 million 7.875% redeemable unsecured Debentures. The effect of this transaction is to effectively build up a sinking
fund with an assured value of USD300.0 million on 1 August 2025 for the repayment of the Debentures.
(f)
Cross-currency Interest Rate Swap (CCIRS)
USD200.0 million 7.125% Notes Due 2005
In 1995, the Company issued USD200.0 million 7.125% Notes due 2005. The Notes are redeemable in full on 1 August 2005.
Hedging Instrument
In 1999, the Company entered into a CCIRS, on a USD50.0 million tranche of the above Notes, for the period from 5 March
1999 to 1 August 2005. The effect of the transaction is to convert USD50.0 million of the fixed rate Notes to a fixed rate JPY
liability of 1.25% per annum with a premium on redemption. The premium on the redemption of the JPY leg is dependent on
the USD/JPY exchange rate on the date of maturity, nevertheless the final redemption amount is range bound between a
minimum of JPY6,080.0 million plus coupon repayment of maximum JPY1,520.0 million.
The Company has recognised the maximum coupon repayment based on a constant rate of return over the life of the instrument
with the assumption of the final redemption amount being the maximum amount payable. However, should the final redemption
amount be less than that, there would be a write-back of any over-accrued amount.
(g)
Cross-currency Interest Rate Swap (CCIRS)
USD350.0 million unsecured Syndicated Term Loan
In 1998, the Company entered into a 5-year USD350.0 million unsecured syndicated term loan, paying interest at floating rates,
to mature on 11 May 2003. During the year ended 31 December 2000, the facility was refinanced into two tranches comprising
USD200.0 million due on 30 June 2003 and USD150.0 million due on 29 June 2007.
Hedging Instrument
In 1998, the Company entered into an interest rate swap (IRS) agreement with notional principal of USD400.0 million that
entitles it to receive interest at floating rate and obliges it to pay interest at fixed rate of 6.75% per annum.
206
12.
(g)
Cross-currency Interest Rate Swap (CCIRS) (continued)
Hedging Instrument (continued)
The Company unwound USD200.0 million notional principal of the swap at zero cost by embedding an interest rate ‘cap’ of
7.25% per annum on the floating rate leg of the remaining USD200.0 million notional amount of the IRS. With the cap, the
floating rate interest receivable from the counter-party has effectively been limited to a maximum rate of 7.25% per annum. The
effect of this transaction is to fix the interest rate payable on USD200.0 million of the above USD loan, to 6.75% per annum
as long as interest rates are below 7.25% per annum. If market interest rates exceed that level, the interest rate payable reverts
to a floating rate. The swap was scheduled to mature on 14 January 2005.
On 26 July 2001, the Company restructured the existing USD200.0 million IRS into a USD150.0 million CCIRS. The restructured
swap has the following new terms whereby, the Company will receive USD150.0 million in return for the payment of
JPY17,324.0 million on maturity of the USD150.0 million tranche of the syndicated term loan on 29 June 2007. The restructured
swap entitles the Company to receive floating interest at 6-month USD Libor, and obliges it to pay interest at 6-month USD
Libor less 1.504% per annum. The net effect of the CCIRS is to convert the Company’s USD150.0 million debt obligation into
JPY at the principal exchange rate of JPY115.4933 at the maturity date of 29 June 2007.
The objective of this transaction is to effectively convert the USD liability into a JPY principal liability, and to reduce the interest
payable on the USD150.0 million tranche of the syndicated term loan. The interest payable on the CCIRS is now a USD floating
interest with a reduced margin, calculated on a notional principal of USD150.0 million.
13.
CUSTOMERS’ DEPOSITS
The Group
Telephone
Data services
Others
TOTAL CUSTOMERS’ DEPOSITS
The Company
2002
2001
2002
2001
RM
RM
RM
RM
662.1
648.1
579.5
578.5
32.6
33.3
32.6
33.3
9.8
8.8
2.3
2.5
704.5
690.2
614.4
614.3
Telephone customers’ deposits are subjected to rebate at 5% per annum in accordance with Telephone Regulations, 1996.
14.
DEFERRED TAXATION
The Group
The Company
2002
2001
2002
2001
RM
RM
RM
RM
At 1 January
26.9
15.3
—
—
Transfer from Income Statement
30.3
11.9
—
—
Currency translation differences
(0.5)
(0.3)
—
—
At 31 December
56.7
26.9
—
—
207
14.
DEFERRED TAXATION (continued)
The tax effect of timing differences which are expected to continue in the foreseeable future and not provided for at 31 December
were:
2002
2001
Arising in the
As at year
Arising in the
As at year
current year
end
current year
end
RM
RM
RM
RM
146.2
1,648.3
128.6
1,502.1
The Company
Between depreciation and capital allowances
Other timing differences
26.1
172.3
(114.7)
1,533.6
(67.9)
60.7
(140.8)
1,361.3
Subsidiary companies
Between depreciation and capital allowances
15.
(149.2)
(394.9)
(138.1)
(245.7)
Unabsorbed tax losses
(10.6)
(350.2)
(4.9)
(339.6)
Other timing differences
51.6
(138.6)
(66.0)
(190.2)
NET TAX EFFECT NOT PROVIDED FOR
64.1
649.9
(148.3)
585.8
RETIREMENT BENEFITS
The Group
The Company
2002
2001
2002
2001
RM
RM
RM
RM
At 1 January
318.7
276.7
317.4
275.7
(Reversal)/charged to Income Statement
(20.7)
60.9
(21.7)
60.2
(298.0)
(18.9)
(295.7)
(18.5)
Remittance to EPF
At 31 December
—
318.7
—
317.4
The Retirement Benefit Scheme was discontinued with effect from 31 December 2000. During the year, the retirement benefit liabilities
have been remitted to Employees’ Provident Fund (EPF). The current year credit represents the excess of the book provision over the
actual retirement benefit liabilities and was reversed accordingly.
208
16.
THE GROUP
Cost
Balance at 1.1.2002
Property, plant and
equipment of new
subsidiary acquired
Additions
Disposals
Write off
Currency translation
differences
Balance at 31.12.2002
Accumulated Depreciation
Balance at 1.1.2002
Property, plant and
equipment of new
subsidiary acquired
Depreciation
Disposals
Write off
differences
Telecommunication
Network
RM
Movable
Plant and
Equipment
RM
Computer
Support
Systems
RM
Land
(sub-note a)
RM
Buildings
RM
Capital
Work-InProgress,
at Cost
(sub-note b)
RM
29,247.7
1,120.5
2,200.0
412.1
2,691.4
4,249.0
39,920.7
—
1,379.1
(1.2)
—
—
(1,316.1)*
—
—
26.2
3,185.1
(226.4)
(1,136.3)
20.8
2,393.8
(202.7)
(1,132.5)
4.0
129.4
(21.1)
(3.1)
1.4
549.5
(0.7)
(0.7)
(23.0)
(0.5)
(0.4)
—
49.4
(0.7)
—
0.6
—
—
Total
Property,
Plant and
Equipment
RM
(23.3)
30,304.1
1,229.2
2,749.1
461.4
4,069.3
2,932.9
41,746.0
17,112.2
885.7
1,617.0
5.7
985.1
—
20,605.7
9.4
1,926.4
(202.0)
(1,081.8)
3.6
81.0
(16.3)
(2.9)
1.2
360.7
(0.7)
(0.7)
—
0.2
—
—
—
113.5
(0.7)
—
—
—
—
—
14.2
2,481.8
(219.7)
(1,085.4)
(5.1)
(0.1)
(0.1)
—
(0.1)
—
(5.4)
17,759.1
951.0
1,977.4
5.9
1,097.8
—
21,791.2
388.3
—
—
—
—
—
388.3
11,747.2
234.8
583.0
406.4
1,706.3
4,249.0
18,926.7
11.4
2,393.8
(1,926.4)
(0.7)
(50.7)
0.4
129.4
(81.0)
(4.8)
(0.2)
0.2
549.5
(360.7)
—
—
—
1,379.1
(113.5)
(0.5)
—
—
(1,316.1)*
—
—
—
12.0
3,185.1
(2,481.8)
(6.7)
(50.9)
(17.9)
(0.4)
(0.3)
Impairment
Balance at 1.1.2002 and
at 31.12.2002
Net Book Value
Balance at 1.1.2002
Property, plant and
equipment of new
subsidiary acquired
Additions
Depreciation
Disposals
Write off
differences
*
12,156.7
278.2
771.7
—
49.4
(0.2)
(0.7)
—
0.6
0.1
—
455.5
2,971.5
2,932.9
(17.9)
19,566.5
Net of transfer to property, plant and equipment
209
16.
THE GROUP
Telecommunication
Network
RM
Movable
Plant and
Equipment
RM
Computer
Support
Systems
RM
Land
(sub-note a)
RM
Buildings
RM
Capital
Work-InProgress,
at Cost
(sub-note b)
RM
27,752.6
1,017.6
1,795.7
403.9
2,588.0
3,926.1
1,753.2
115.1
409.9
10.1
105.8
Total
Property,
Plant and
Equipment
RM
37,483.9
Cost
Balance at 1.1.2001
Additions
322.9*
2,717.0
Disposals
(118.1)
(5.7)
(4.1)
—
(0.3)
—
(128.2)
Write off
(122.2)
(3.5)
(1.0)
—
—
—
(126.7)
(17.8)
(3.0)
(0.5)
(1.9)
(2.1)
—
(25.3)
differences
29,247.7
1,120.5
2,200.0
412.1
2,691.4
4,249.0
39,920.7
15,442.0
788.5
1,329.3
5.1
909.0
—
18,473.9
1,901.8
105.9
292.7
0.6
76.6
—
2,377.6
Balance at 1.1.2001
Depreciation
Disposals
(111.5)
(4.5)
(4.0)
—
(0.2)
—
(120.2)
Write off
(114.3)
(2.1)
(0.8)
—
—
—
(117.2)
(5.8)
(2.1)
(0.2)
—
(0.3)
—
(8.4)
differences
17,112.2
885.7
1,617.0
5.7
985.1
—
20,605.7
304.0
—
—
—
—
—
304.0
84.3
—
—
—
—
—
84.3
388.3
—
—
—
—
—
388.3
3,926.1
18,706.0
Impairment
Balance at 1.1.2001
Impairment losses
Net Book Value
Balance at 1.1.2001
Additions
Depreciation
12,006.6
229.1
466.4
398.8
1,679.0
1,753.2
115.1
409.9
10.1
105.8
322.9*
2,717.0
(1,901.8)
(105.9)
(292.7)
(0.6)
(76.6)
—
(2,377.6)
Disposals
(6.6)
(1.2)
(0.1)
—
(0.1)
—
(8.0)
Write off
(7.9)
(1.4)
(0.2)
—
—
—
(9.5)
(84.3)
—
—
—
—
—
(84.3)
(12.0)
(0.9)
(0.3)
(1.9)
(1.8)
—
(16.9)
Impairment losses
differences
*
210
11,747.2
234.8
583.0
406.4
1,706.3
4,249.0
18,926.7
16.
Net book value of property, plant and equipment of certain subsidiary companies, pledged as security for borrowings (note 12 to the
financial statements):
Telecommunication network
2002
2001
RM
RM
272.8
214.6
Movable plant and equipment
5.0
5.3
Computer support systems
1.4
1.4
Land
0.9
0.9
Buildings
1.9
2.2
282.0
224.4
THE COMPANY
Telecommunication
Network
RM
Movable
Plant and
Equipment
RM
Computer
Support
Systems
RM
Land
(sub-note a)
RM
Buildings
RM
Capital
Work-InProgress,
at Cost
(sub-note b)
RM
26,226.5
869.7
1,855.7
383.1
2,290.7
3,642.7
1,451.1
99.7
421.4
1.2
876.5
(691.6)*
2,158.3
(86.4)
(35.6)
(557.0)
(1,085.5)
Total
Property,
Plant and
Equipment
RM
35,268.4
Cost
Balance at 1.1.2002
Additions
Disposals
(225.0)
(24.8)
(156.7)
Write off
(1,126.0)
(3.1)
(0.7)
—
—
—
(1,129.8)
26,326.6
941.5
2,119.7
297.9
3,131.6
2,394.1
35,211.4
16,183.3
740.5
1,428.0
5.1
900.7
—
19,257.6
1,691.8
49.6
268.5
0.5
77.9
—
2,088.3
(16.4)
—
(306.6)
(1,078.9)
Balance at 1.1.2002
Depreciation
Disposals
(192.3)
(18.1)
(79.8)
—
Write off
(1,075.3)
(2.9)
(0.7)
—
—
—
1,616.0
5.6
962.2
—
19,960.4
3,642.7
16,010.8
16,607.5
769.1
10,043.2
129.2
427.7
378.0
1,390.0
1,451.1
99.7
421.4
1.2
876.5
(1,691.8)
(49.6)
(268.5)
(0.5)
(77.9)
Disposals
(32.7)
(6.7)
(76.9)
(86.4)
(19.2)
Write off
(50.7)
(0.2)
Net Book Value
Balance at 1.1.2002
Additions
Depreciation
9,719.1
172.4
(691.6)*
—
(557.0)
—
—
—
—
503.7
292.3
2,169.4
2,394.1
2,158.3
(2,088.3)
(778.9)#
(50.9)
15,251.0
*
#
Included in disposals was RM774.3 million being property, plant and equipment transferred to wholly owned subsidiary companies
211
16.
THE COMPANY
Telecommunication
Network
RM
Movable
Plant and
Equipment
RM
Computer
Support
Systems
RM
Land
(sub-note a)
RM
Buildings
RM
Capital
Work-InProgress,
at Cost
(sub-note b)
RM
Total
Property,
Plant and
Equipment
RM
Cost
Balance at 1.1.2001
Additions
Disposals
Write off
25,224.8
1,236.8
(118.1)
(117.0)
809.9
87.2
(23.9)
(3.5)
1,549.2
325.6
(18.3)
(0.8)
381.7
1.4
—
—
2,195.0
105.7
(10.0)
—
3,504.2
138.5*
—
—
33,664.8
1,895.2
(170.3)
(121.3)
26,226.5
869.7
1,855.7
383.1
2,290.7
3,642.7
35,268.4
Balance at 1.1.2001
Depreciation
Disposals
Write off
14,691.6
1,718.5
(112.9)
(113.9)
683.0
70.7
(11.1)
(2.1)
1,220.2
223.0
(14.6)
(0.6)
4.7
0.4
—
—
829.0
74.6
(2.9)
—
—
—
—
—
17,428.5
2,087.2
(141.5)
(116.6)
16,183.3
740.5
1,428.0
5.1
900.7
—
19,257.6
Net Book Value
Balance at 1.1.2001
Additions
Depreciation
Disposals
Write off
10,533.2
1,236.8
(1,718.5)
(5.2)
(3.1)
126.9
87.2
(70.7)
(12.8)
(1.4)
329.0
325.6
(223.0)
(3.7)
(0.2)
377.0
1.4
(0.4)
—
—
1,366.0
105.7
(74.6)
(7.1)
—
3,504.2
138.5*
—
—
—
16,236.3
1,895.2
(2,087.2)
(28.8)#
(4.7)
10,043.2
129.2
427.7
378.0
1,390.0
3,642.7
16,010.8
*
#
(a)
Included RM23.5 million being property, plant and equipment transferred to subsidiary companies
Details of land (at cost) are as follows:
The Group
Freehold land
Long term leasehold
Short term leasehold
Other land
The Company
2002
RM
2001
RM
2002
RM
2001
RM
254.5
130.3
3.3
73.3
207.0
94.7
2.0
108.4
92.5
130.3
2.0
73.1
178.9
93.8
2.0
108.4
461.4
412.1
297.9
383.1
The title deeds pertaining to other land have not yet been registered in the name of the Company and a subsidiary company.
Pending finalisation with the relevant authorities, the land have not been classified according to their tenure.
(b)
212
Included in the capital work-in-progress is finance cost capitalised amounting to RM5.2 million (2001: RM4.0 million) for the
Group.
17.
SUBSIDIARY COMPANIES
The Company
2002
2001
RM
RM
19.5
—
470.5
1,704.8
Investments, quoted:
Malaysia – at cost
Investments, unquoted:
Malaysia – at cost
– at written down value (sub-note a)
1,684.4
—
179.2
243.0
Overseas – at cost
Amount owing by subsidiary companies (sub-note b)
2,353.6
1,947.8
5,046.0
3,349.9
7,399.6
5,297.7
Allowance for loans and advances
(406.1)
TOTAL INTEREST IN SUBSIDIARY COMPANIES
6,993.5
4,891.6
72.9
—
Market value of quoted investment
(a)
(406.1)
Investments in certain subsidiary companies have been written down to recoverable amount or RM1 each.
The subsidiary companies are as follows:
Name of Company
Citifon Sdn. Bhd.
% of
Shareholdings
2002 2001
100
100
Paid-up Capital
2002
2001
Million
Million
RM65.0
RM65.0
Principal Activities
Payphone network and related
services
Fiberail Sdn. Bhd.
60
60
RM14.2
RM14.2
Installation, maintaining and operating
of optical fibre telecommunication
system
GITN Sdn. Bhd.
100
—
RM20.0
RM–
Integrated telecommunication network
infrastructure
Intelsec Sdn. Bhd.*
100
100
RM3.0
RM3.0
Intelligent security services
Mediatel (Malaysia) Sdn. Bhd.
100
100
RM4.0
RM4.0
Investment holding
70
70
RM11.0
RM11.0
Meganet Communications Sdn. Bhd.
Interactive multimedia communication
services
213
17.
SUBSIDIARY COMPANIES (continued)
Name of Company
Menara Kuala Lumpur Sdn. Bhd.
% of
Shareholdings
2002 2001
100
100
Paid-up Capital
2002
2001
Million
Million
RM91.0
RM91.0
Management and operation of Kuala
Lumpur Tower
Mobikom Sdn. Bhd.
100
100
RM260.0
RM260.0
Parkside Properties Sdn. Bhd.*
100
100
RM0.1
RM0.1
Societe Des Telecommunications
60
60
GFR75,000.0
GFR75,000.0
De Guinee##
Telekom Applied Business Sdn. Bhd.
Mobile telecommunication services
Investment holding
Telecommunication and related
services
70
70
RM1.6
RM1.6
Development and sale of software
products
Telekom Consultancy Sdn. Bhd.*
51
51
RM#
RM#
Consultancy and engineering services
in telecommunications
Telekom Enterprise Sdn. Bhd.
100
100
RM0.6
RM0.6
Investment holding
Telekom Infotech Sdn. Bhd.*
100
100
RM0.5
RM0.5
Investment holding
Telekom Malaysia-Africa Sdn. Bhd.
100
100
RM0.1
RM0.1
Investment holding
Telekom Management Services
100
100
RM#
RM#
Sdn. Bhd.
Telekom Multi-Media Sdn. Bhd.
Management consultancy services in
telecommunication and related areas
100
100
RM1.6
RM1.6
Interactive multimedia communication
services and solutions
Telekom Networks Malawi Limited**
60
60
MKW350.0
MKW65.0
Telecommunication and related
services
Telekom Payphone Sdn. Bhd.
100
100
RM9.0
RM9.0
Investment holding
Telekom Publications Sdn. Bhd.
100
100
RM6.0
RM6.0
Printing and publication of telephone
directories and distribution of
information
Telekom Research & Development
100
100
RM20.0
RM20.0
Sdn. Bhd.
Research and development work
and experiment in the area of
telecommunication
Telekom Sales and Services
Sdn. Bhd.
214
100
100
RM14.5
RM7.5
Trading in customer premises
equipment
17.
Name of Company
Telekom Technology Sdn. Bhd.
% of
Shareholdings
2002 2001
70
70
Paid-up Capital
2002
2001
Million
Million
RM13.0
RM0.1
Develop, establish, maintain, operate
and market advance technology in
e-commerce
Telesafe Sdn. Bhd.*
100
100
RM4.0
RM4.0
Telekom Malaysia (S) Pte. Ltd.**
100
—
SGD#
SGD–
Fire and industrial safety services
International telecommunication
facilities
Telekom Malaysia (UK) Limited**
100
100
STR#
STR#
facilities
TM (Hong Kong) Limited**
100
100
HKD#
HKD#
facilities
TM (USA) Inc.**
100
100
USD#
USD#
facilities
100
100
RM1,565.0
RM1,000.0
TM Global Incorporated##
100
100
USD#
USD#
TM Facilities Sdn. Bhd.
100
—
RM2.3
RM–
70
70
TK340.0
TK340.0
TM International (Cayman) Ltd.*
100
100
USD#
USD#
Investment holding
TM International Leasing
100
100
USD#
USD#
Investment holding
100
100
RM16.2
RM16.2
TM International (Bangladesh)
Investment holding
Facilities management services
Limited##
Incorporated##
Investment holding/telecommunication
and consultancy services on an
international scale
TM Net Sdn. Bhd.
100
—
RM180.0
RM–
100
100
RM1.0
RM1.0
69.52
100
RM40.0
RM15.0
VADS Berhad
Internet related services
Management of private university
Value added data and electronic
telecommunication services
215
17.
Name of Company
% of
Shareholdings
2002 2001
Paid-up Capital
2002
2001
Million
Million
Subsidiary held through
Telekom Publications Sdn. Bhd.
Cybermall Sdn. Bhd.
100
100
RM2.7
RM2.7
Telecommunications, multimedia
and information technology services
Unitele Multimedia Sdn. Bhd.
100
100
RM#
RM#
Investment holding/adopting research
ideas for development, prototyping
and consultancy project and
collaborating with external parties
Subsidiaries held through
VADS Berhad
VADS e-Services Sdn. Bhd.
100
100
RM1.0
RM1.0
Electronic commerce services
VADS Solutions Sdn. Bhd.
100
100
RM1.5
RM1.5
Internet System Integration and
networking facilities relating to
information technology
MTN Networks (Pvt) Limited##
100
100
SLR370.0
SLR370.0
TM International (L) Limited##
100
100
USD#
USD#
Investment holding
TM International Lanka (Pvt)
Limited##
100
100
SLR200.0
SLR200.0
Investment holding
TMI Mauritius Limited##
100
100
USD#
USD#
Investment holding
G-Com Limited**
85
85
CED22.9
CED22.9
Investment holding
Cambodia Samart Communications
Co. Ltd.**
51
51
USD8.5
USD8.5
100
100
RM#
RM#
Electronic commerce and related
services
Telekom Smart School Sdn. Bhd.
51
51
RM15.0
RM15.0
Development and distribution of
educational software and hardware
Telekom Enterprise Sdn. Bhd.
Mobitel Sdn. Bhd.*
55
55
RM8.0
RM8.0
TESS International Ltd.*
100
—
USD#
USD–
TM Orion Sdn. Bhd.*
216
Investment holding
17.
All subsidiary companies are incorporated in Malaysia except the following:
Name of Company
Place of Incorporation
Cambodia Samart Communications Co. Ltd.**
– Cambodia
G-Com Limited**
– Ghana
MTN Networks (Pvt) Limited##
– Sri Lanka
Societe Des Telecommunications De Guinee##
– Republic of Guinea
Telekom Networks Malawi Limited**
– Malawi
TM Global Incorporated##
– Federal Territory, Labuan
TM International (Bangladesh) Limited##
– Bangladesh
TM International (Cayman) Ltd.*
– British West Indies, USA
TM International Lanka (Pvt) Limited##
– Sri Lanka
TM International Leasing Incorporated##
TMI Mauritius Limited##
– Mauritius
Telekom Malaysia (S) Pte. Ltd.**
– Singapore
Telekom Malaysia (UK) Limited**
– United Kingdom
TM (Hong Kong) Limited**
– Hong Kong
TM (USA) Inc.**
– United States of America
TESS International Ltd.*
– Mauritius
*
Inactive as at 31 December 2002
## Audited by a member firm of PricewaterhouseCoopers
** Not audited by member firms of PricewaterhouseCoopers
#
(b)
Amounts less than 0.1 million in their respective currency
CED
Ghanaian Cedi
GFR
Guinea Franc
HKD
Hong Kong Dollar
MKW
Malawi Kwacha
SGD
Singapore Dollar
SLR
Sri Lanka Rupee
STR
Pound Sterling
TK
Bangladesh Taka
USD
US Dollar
Amount owing by subsidiary companies
The amount owing by subsidiary companies represents shareholder loans and advances for working capital purposes. These
loans and advances are unsecured and bear interest ranging from 0% to 4.88% (2001: 0% to 8.0%) with no fixed repayment
terms. However, the Company has indicated that it will not demand substantial repayment within the next twelve months.
217
18.
The Group
The Company
2002
2001
2002
2001
RM
RM
RM
RM
Malaysia
1,654.9
—
84.2
—
Overseas
198.9
198.9
—
—
Investments, at cost (quoted):
Investments, at cost (unquoted):
Malaysia
2.9
11.1
1.5
9.7
Overseas
1,292.5
1,389.3
10.3
10.3
3,149.2
1,599.3
96.0
20.0
—
—
Goodwill written off
(1,820.0)
(761.1)
1,329.2
838.2
96.0
20.0
209.4
202.5
—
—
1,538.6
1,040.7
96.0
20.0
0.4
25.8
0.4
2.0
1,539.0
1,066.5
96.4
22.0
Malaysia
1,512.5
—
101.1
—
Overseas
16.0
15.2
—
—
Group’s share of post acquisition profits
less losses
Share of net assets of associated companies
Amount owing by associated companies
(sub-note a)
TOTAL INTEREST IN ASSOCIATED COMPANIES
Market value of quoted investments:
The associated companies are as follows:
% of
Name of Company
GITN Sdn. Bhd.
5by5 Networks Inc.
Shareholdings
2002
2001
—
45
16.5
16.5
16.2
15
E-commerce services
40
40
Wireless communications services
31.25
—
Mobile, fixed and multimedia services
Integrated telecommunication network infrastructure
Research and development of telecommunication products
(formerly known as Itopia Inc.)
MYSPEED.COM Sdn. Bhd.
Sistem Iridium Malaysia Sdn. Bhd.*
Celcom (Malaysia) Berhad**
218
18.
ASSOCIATED COMPANIES (continued)
% of
Name of Company
Shareholdings
2002
2001
Mahirnet Sdn. Bhd.
49
49
Distance learning services
Mutiara.Com Sdn. Bhd.
30
30
Information technology and telecommunications infrastructure
42
42
Trunk land mobile radio services
19.73
19.73
40
40
Investment holding
—
30
Telecommunication and related services
30
30
Telecommunication and related services
Associates held through
Associates held through
Cambodia National Communication Inc.*
Samart Corporation Public Company
Telecommunication and broadcasting services
Limited
Associate held through
Telekom Malaysia-Africa Sdn. Bhd.
Thintana Communications Llc.
G-Com Limited
Ghana Telecommunications Company
Limited (sub-note b)
Telkom SA Limited
All associated companies are incorporated in Malaysia except the following:
Name of Company
Place of Incorporation
Cambodia National Communication Inc.*
– Cambodia
5by5 Networks Inc.
Samart Corporation Public Company Limited
– Thailand
Telkom SA Limited
– South Africa
All associated companies have co-terminous financial year end with the Company except for MYSPEED.COM Sdn. Bhd. and Telkom
SA Limited with financial year ends on 31 January and 31 March respectively.
*
Inactive as at 31 December 2002
** 29.16% held through Telekom Enterprise Sdn. Bhd.
219
18.
ASSOCIATED COMPANIES (continued)
(a)
Amount owing by associated companies
The amount owing by associated companies are unsecured and interest free with no fixed repayment terms. However, the
Company has indicated that it will not demand substantial repayment within the next twelve months.
(b)
Telekom Malaysia’s (TM’s) effective interest in Ghana Telecommunications Company Limited (GT) is 25.5%, held through TM
International Sdn. Bhd. and G-Com Limited (G-Com). On 3 June 2002, the Extraordinary General Meeting (EGM) of GT passed
a resolution to reconstitute the Board of GT consisting of four nominees from G-Com (85% owned by TM) and three nominees
from the Government of Ghana (GoG) to three nominees from G-Com and six nominees from GoG. This resolution was passed
despite the objection from G-Com whose consent is required under the Company Regulations of GT.
Subsequently, G-Com filed for an application in the High Court of Ghana on 13 June 2002, to seek a declaration that the EGM
held on 3 June 2002 was null and void.
On 11 July 2002, the GoG unilaterally terminated the contract of employment of the Managing Director (MD) and appointed an
Interim Management Committee to oversee and manage the day to day affair of GT pending the appointment of a substantive
MD by the shareholders of GT.
On 31 July 2002, the High Court of Ghana dismissed G-Com’s application for a declaration to nullify the EGM held on 3 June
2002. On 25 September 2002, G-Com filed for an appeal in the Supreme Court of Ghana against the decision of the High Court
dated 31 July 2002. The Supreme Court has yet to fix the hearing date of the said appeal.
Following the above events, TM lost significant influence over the financial and operating policy decisions of GT. Accordingly,
TM has since ceased to equity account for its share of results in GT.
With the above, the carrying value of investment in GT has been reclassified from associated company to long term investment
in note 19 to the financial statements. In addition, TM is also pursuing the recovery of the deposit for further investment in GT
(refer to note 33(a) to the financial statements for further details).
19.
INVESTMENTS
The Group
The Company
2002
2001
2002
2001
RM
RM
RM
RM
133.5
133.5
132.6
132.6
96.4
62.3
56.0
56.0
Investments in International Satellite
Organisations, at cost
Investments in unquoted shares, at cost
220
229.9
195.8
188.6
188.6
Allowance for permanent diminution in value
(90.3)
(90.3)
(90.3)
(90.3)
TOTAL INVESTMENTS AFTER ALLOWANCE
139.6
105.5
98.3
98.3
20.
LONG TERM RECEIVABLES
The Group
21.
The Company
2002
RM
2001
RM
2002
RM
2001
RM
Staff loans under Islamic principles
Staff loans
431.7
331.8
359.9
388.0
431.7
331.7
359.9
387.9
Total staff loans (sub-note a & b)
Amount receivable within twelve months
included under other receivables
763.5
747.9
763.4
747.8
(99.3)
(100.6)
(99.3)
(100.6)
Other long term receivables (sub-note c)
664.2
21.2
647.3
10.5
664.1
20.5
647.2
9.8
TOTAL LONG TERM RECEIVABLES
685.4
657.8
684.6
657.0
(a)
Staff loans comprise housing, vehicle, computer and club membership loans offered to the employees with financing cost of
4.0% per annum on reducing balance basis except for club membership loan which is free of financing cost. There is no single
significant exposure as the amount is mainly receivable from individuals. Staff loans inclusive of financing cost are repayable
in equal monthly instalments as follows:
(i) Housing loan – 25 years or upon employees attaining 55 years of age, whichever is earlier
(ii) Vehicle loan – maximum of 8 years for new car and 6 years for second hand car
(iii) Computer loan – 3 years
(b)
Staff loans amounting to RM92.8 million (2001: RM100.0 million) have been assigned to secure the Company’s borrowings
from Cagamas Berhad.
(c)
Other long term receivables of the Company are in respect of education loans provided to undergraduates and are convertible
to scholarships if certain performance criteria are met. The loan is interest free and if not converted to scholarship will be
repayable over a period of not more than 8 years.
INVENTORIES
The Group
At cost:
Cables and wires
Network materials
Telecommunication equipment
Spares and others
At net realisable value:
Spares and others
TOTAL INVENTORIES
The Company
2002
RM
2001
RM
2002
RM
2001
RM
38.7
30.6
24.3
37.4
27.8
29.2
20.1
55.3
38.7
29.2
21.1
16.7
27.8
29.2
17.2
21.3
131.0
132.4
105.7
95.5
41.5
21.0
—
—
172.5
153.4
105.7
95.5
221
22.
TRADE AND OTHER RECEIVABLES
The Group
The Company
2002
2001
2002
2001
RM
RM
RM
RM
Receivables from telephone customers
2,358.0
2,971.5
1,459.0
1,674.9
Receivables from non-telephone customers
1,678.9
1,516.3
1,224.8
1,342.9
—
—
326.4
639.1
4,036.9
4,487.8
3,010.2
3,656.9
Receivables from subsidiary companies
Advance rental billings
Allowance for doubtful debts
Total trade receivables after allowance
Prepayments
(494.4)
(451.4)
(522.8)
2,487.4
(507.1)
3,542.5
4,036.4
(1,151.2)
(1,485.2)
2,391.3
2,551.2
1,858.5
2,427.5
574.4
556.3
528.0
534.7
190.0
190.0
190.0
190.0
436.3
438.1
348.4
337.2
—
—
17.3
45.8
3,592.0
3,735.6
2,942.2
3,535.2
(628.9)
3,149.8
(722.3)
Deposit for additional investment (refer to
note 33(a) to the financial statements)
Other receivables
Other receivables from subsidiary companies
TOTAL TRADE AND OTHER RECEIVABLES
AFTER ALLOWANCE
The currency exposure profile of trade and
other receivables after allowance is as follows:
– US Dollars
– Special Drawing Rights
2,616.8
2,262.4
660.4
566.0
83.9
83.9
– Guinea Franc
110.4
—
120.5
29.9
3,592.0
2,942.2
Credit terms of trade receivables range from payment in advance to 90 days.
222
22.
TRADE AND OTHER RECEIVABLES (continued)
The following table represents credit risk exposure of trade receivables, net of allowances for doubtful debts and without taking into
account any collateral taken:
Business
Residential
Subsidiary companies
The Group
The Company
2002
2002
RM
RM
1,638.9
1,076.8
752.4
455.3
—
326.4
2,391.3
1,858.5
The Group and the Company are not exposed to major concentrations of credit risk due to the diversed customer base. In addition,
credit risk is mitigated to a certain extent by cash deposits and bankers’ guarantee obtained from customers and the Group and the
Company consider the allowance for doubtful debts at balance sheet date to be adequate to cover the potential financial loss.
23.
SHORT TERM INVESTMENTS
The Group
The Company
2002
2001
2002
2001
RM
RM
RM
RM
197.7
222.5
197.7
222.5
TOTAL SHORT TERM INVESTMENTS
197.7
222.5
197.7
222.5
Market value of quoted shares
197.7
222.5
197.7
222.5
Shares quoted on the Kuala Lumpur
Stock Exchange
223
24.
The Group
The Company
2002
2001
2002
2001
RM
RM
RM
RM
345.3
495.6
85.0
453.1
Deposits with:
Licensed banks
Licensed finance companies
Other financial institutions
Deposits under Islamic principles
Total Deposits
Cash and bank balances
Cash and bank balances under Islamic principles
Bank overdrafts
3.0
164.5
3.0
159.5
740.0
1,063.4
740.0
970.0
424.4
682.0
208.2
450.7
1,512.7
2,405.5
1,036.2
2,033.3
241.9
120.8
102.0
77.2
80.2
0.8
—
—
(13.8)
(7.0)
—
—
1,138.2
2,110.5
TOTAL CASH AND CASH EQUIVALENTS
AT END OF THE YEAR
1,821.0
2,520.1
The currency exposure profile of cash and
cash equivalents is as follows:
974.2
466.8
– US Dollar
770.8
671.4
76.0
—
1,821.0
1,138.2
The deposits are placed mainly with a number of creditworthy financial institutions. There is no major concentration of deposits in
any single financial institution. Deposits have maturity ranged from overnight to 182 days and overnight to 94 days for the Group
and Company respectively. Bank balances are deposits held at call with banks.
The weighted average interest rate of deposits (excluding deposits under Islamic principles) as at 31 December 2002 is 2.32% and
1.94% for the Group and the Company respectively.
The bank overdrafts were unsecured and interests were payable at rates which varied according to the lenders’ prevailing base lending
rates. Interest rates during the period ranged from 6.5% to 8.9% (2001: 6.0% to 7.0%) per annum except for overseas subsidiary
companies where the interest rates ranged from 13.5% to 44.0% (2001: 19.0% to 46.0%) per annum. The weighted average interest
rate of bank overdrafts as at 31 December 2002 is 14.8% for the Group.
224
25.
TRADE AND OTHER PAYABLES
The Group
Trade payables
The Company
2002
2001
2002
2001
RM
RM
RM
RM
2,369.4
2,249.0
1,597.3
1,479.2
Duties and other taxes payable
113.8
198.2
58.9
132.5
Finance cost payable
124.9
128.8
119.7
127.9
97.0
130.0
87.3
120.1
Accruals for USP
230.5
—
209.2
—
Other non trade payables
661.1
562.5
504.1
390.2
3,596.7
3,268.5
2,576.5
2,249.9
Deposits and trust monies
TOTAL TRADE AND OTHER PAYABLES
The currency exposure profile of trade and
other payables is as follows:
3,333.1
2,484.4
– US Dollar
130.7
71.1
132.9
21.0
3,596.7
2,576.5
Credit terms of trade and other payables vary from 30 to 90 days depending on the terms of the contracts.
26.
CASH FLOWS FROM OPERATING ACTIVITIES
The Group
Receipts from customers
The Company
2002
2001
2002
2001
RM
RM
RM
RM
9,402.2
8,988.5
7,634.7
7,568.0
(4,861.3)
(4,230.3)
(3,769.6)
(3,384.8)
Payment of finance cost
(449.3)
(689.8)
(445.3)
(664.2)
Payment of income taxes
(868.2)
(785.2)
(835.2)
(769.8)
Payments to suppliers and employees
TOTAL CASH FLOWS FROM OPERATING
ACTIVITIES
3,223.4
3,283.2
2,584.6
2,749.2
225
27.
CASH FLOWS USED IN INVESTING ACTIVITIES
The Group
Disposal of property, plant and equipment
Purchase of property, plant and equipment
The Company
2002
2001
2002
2001
RM
RM
RM
RM
24.9
(3,164.2)
34.0
(2,709.9)
22.7
(2,114.9)
32.8
(1,895.4)
Disposal of investment
24.5
32.6
24.5
32.6
Purchase of investment
(30.8)
(85.0)
(30.8)
(83.3)
Acquisition of subsidiary companies*
Additional investment in subsidiary companies
Acquisition of an associated company
Additional investment in an associated company
(3.4)
—
(11.0)
—
—
—
(46.1)
(4.5)
—
(83.0)
—
(0.6)
(0.7)
(0.6)
(1,653.7)
(0.7)
Disposal of an associated company
—
927.6
—
—
Repayment from subsidiary companies
—
—
—
926.1
Advances to subsidiary companies
—
—
Repayment from associated companies
—
0.4
—
0.4
Advances to associated companies
—
(1.0)
—
(0.1)
Repayments of loans by employees
Loans to employees
(1,947.7)
(294.8)
99.7
100.6
98.8
100.6
(115.2)
(119.6)
(114.4)
(119.6)
Interest received
87.7
128.6
75.7
99.7
Dividend received
5.6
3.7
31.7
38.1
TOTAL CASH FLOWS USED IN INVESTING
ACTIVITIES
*
(4,725.6)
(1,688.6)
(4,095.2)
Summary of the effect of the acquisition of a subsidiary company during the year:
2002
RM
Goodwill
39.7
Property, plant and equipment
12.0
Current assets
Current liabilities
Purchase consideration satisfied by cash
11.0
Cash and cash equivalent acquired
(7.6)
Cash flow on acquisition, net of cash acquired
226
18.8
(59.5)
3.4
(1,168.0)
28.
CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES
The Group
Issue of share capital
The Company
2002
2001
2002
2001
RM
RM
RM
RM
535.0
140.9
535.0
140.9
27.3
4.8
—
—
829.3
1,090.0
Issue of share capital to minority interest
Proceeds from borrowings
1,631.2
Repayment of borrowings
(1,037.7)
(2,033.5)
(745.1)
(1,807.8)
(341.6)
(222.4)
(341.6)
(222.4)
(4.4)
(4.9)
—
(1,285.8)
538.3
Dividends paid to shareholders
Dividends paid to minority interests
489.0
—
TOTAL CASH FLOWS FROM/(USED IN)
FINANCING ACTIVITIES
29.
809.8
(1,400.3)
SIGNIFICANT NON-CASH TRANSACTIONS
Significant non-cash transactions during the year are as follows:
The Company
(a)
Capitalisation of trade debts, loans and advances into paid-up capital of
(b)
Transfer of property, plant and equipment and capital work-in-progress to
subsidiary companies
2002
2001
RM
RM
633.0
318.3
837.0
15.9
72.4
—
wholly owned subsidiary companies at considerations satisfied by the
issuance of shares
(c)
Transfer of investment in an overseas subsidiary company to a local investment
holding subsidiary company
30.
RELATED PARTIES TRANSACTIONS
In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are other related parties
transactions and balances.
(a)
In 1996, Daewoo-Peremba Construction J/V (D-PC J/V) was awarded the contract for the construction of Menara Telekom at
an estimated contract value of RM572.4 million. Dato’ Dr. Mohd Munir bin Abdul Majid, a Director of the Company is also a
Director of Peremba Construction Sdn. Bhd. since 13 August 1999. Peremba Construction Sdn. Bhd. is a partner of the D-PC
J/V. Progress billings from D-PC J/V during the year amounted to RM3.3 million (2001: RM28.9 million) with no balance
outstanding as at 31 December 2002. This transaction has been entered in the normal course of business and at negotiated
terms.
(b)
On 1 August 2002, a letter of award was issued by a subsidiary company to Edward & Sons Sdn. Bhd. (ESSB) on the tender
for road rehabilitation and slope stabilization works at TM Bukit Dabei Microwave Station, Marudi Sarawak at a contract value
of approximately RM1.6 million. Y.B. Joseph Salang Gandum, who is a director of the Company and a shareholder of ESSB is
deemed interested in the transaction. Progress billings from ESSB during the year amounted to RM0.2 million which remained
outstanding as at 31 December 2002.
227
31.
COMMITMENTS
The Group
(a)
The Company
2002
2001
2002
2001
RM
RM
RM
RM
3,065.3
3,896.6
2,826.5
3,326.8
24.4
12.2
—
—
Property, plant and equipment
Commitments in respect of expenditure
approved and contracted for
Commitments in respect of expenditure
approved but not contracted for
At 31 December 2001, there existed a potential claim for recovery of loss and expenses totalling to RM527.5 million for the
construction of Menara Telekom. Following a series of negotiations during the year, the contractor has accepted RM91.0 million as
full and final settlement.
The Company
(b)
2002
2001
Future minimum
Future minimum
lease payments
lease payments
RM
RM
53.2
53.2
Later than one year and not later than five years
226.3
226.4
Later than five years
121.8
146.6
401.3
426.2
Non-cancellable operating lease commitments
Not later than one year
The above lease payments relate to the non-cancellable operating lease of a telecommunication tower from a wholly owned subsidiary
company.
32.
CONTINGENT LIABILITIES (Unsecured)
(a)
At 31 December 2002, the Company had contingent liabilities in respect of:
(i)
Guarantees issued to banks amounting to USD26.0 million (RM98.8 million) (2001: USD32.0 million (RM121.6 million))
for banking facilities extended to overseas subsidiary companies.
(ii)
A corporate guarantee was granted to a financial institution in respect of the USD21.0 million (RM79.8 million) financing
facility obtained by a wholly owned subsidiary company, MTN Networks (Private) Limited. The guarantee was executed on
6 May 2002 and will expire in March 2010. The guarantee replaces an earlier guarantee of USD6.0 million dated 20
September 2001 given in favour of the above said financial institution.
(iii)
Guarantee of a series of Promissory Notes totalling approximately USD6.679 million (RM25.4 million) issued by Sotelgui
S.A., a subsidiary company, in favour of an equipment supplier issued on 18 April 2002. The Promissory Notes are
payable during the period between November 2003 to December 2005.
228
32.
CONTINGENT LIABILITIES (Unsecured) (continued)
(b)
There is a claim arising from an agreement dated 10 February 1998 made between Telekom Malaysia (TM) and Tan Sri
Mustapha Kamal Haji Abu Bakar, Eastborne Corporation Berhad, Projass Engineering Berhad and Shorefield Holdings Sdn. Bhd.
(to be collectively referred to as “MEPS JV”), MEPS JV agreed to design, construct and complete the proposed Multimedia
University Campus at Cyberjaya, Selangor Darul Ehsan.
The disputes between the parties, amongst others include the completion of outstanding works, remedying of defects, retention
of the cash performance guarantee, the deduction of liquidated damages for delay and the certification and payment of the
retention money. This dispute has been referred to Jabatan Kerja Raya (JKR) of which, on 27 June 2002 JKR has awarded a
compensation of RM63.8 million in favour of MEPS JV. TM is currently in the process of appealing to JKR over the said decision.
TM filed an appeal for review of the decision by JKR in the High Court. The Court had originally fixed 27 November 2002 as
the hearing date for the said application which was subsequently postponed to May 2003.
Apart from the above, the Directors are not aware of any other proceedings pending against the Company and/or its subsidiary
companies or of any facts likely to give rise to any proceedings which might materially affect the position or business of the Company
and/or its subsidiary companies.
There were no other contingent liabilities or material litigations or guarantees other than those arising in the ordinary course of the
business of the Group and the Company and on these no material losses are anticipated.
33.
SIGNIFICANT EVENTS
(a)
On 18 September 2002, TM issued a Notification of Claim to the Government of Ghana (GoG) pursuant to the Bilateral
International Treaty between the Government of Malaysia and GoG on 11 November 1996 (BIT) in respect of the following
disputes:
(i)
GoG’s treatment of TM’s investment in Ghana Telecommunications Company Limited (GT) held through TM International
Sdn. Bhd. and G-Com Limited (refer to note 18(b) to the financial statements for the details).
(ii)
GoG’s failure to refund a USD50.0 million (RM190.0 million) deposit for the proposed acquisition of additional 15% equity
interest in GT (as disclosed in note 22 to the financial statements) pursuant to the Head of Agreement entered into
between TM and GoG dated 10 August 2000.
Since the parties could not reach an amicable settlement, TM through its counsel in London, sent a Notice of Arbitration to the
GoG on 10 February 2003 for the commencement of arbitration proceedings under the UNCITRAL Arbitration Rules in
accordance with the provisions of the BIT. Upon the receipt of the said Notice of Arbitration by the GoG, the parties will
determine the constitution of an Arbitral Tribunal to decide the modalities of the arbitration proceeding. It is expected that the
arbitration proceeding would conclude within a period of 18 to 24 months from the date of filing of the said Notice.
229
33.
SIGNIFICANT EVENTS (continued)
(b)
On 28 October 2002, Telekom Malaysia (TM) had executed a sale and purchase agreement with Celcom (Malaysia) Berhad
(Celcom) for the injection of 100% of its equity interest in TM Cellular Sdn. Bhd. to Celcom for a total consideration of
RM1,684.0 million to be satisfied by the issuance of 635,471,698 new Celcom ordinary shares of RM1.00 each at RM2.65 per
Celcom share (Proposed Disposal).
Upon completion of the Proposed Disposal, TM’s direct and indirect interests in Celcom would increase from 31.25% to
47.93%. Accordingly, TM and the persons acting in concert (PAC) with TM would be obligated to undertake a Mandatory
General Offer (MGO) for the remaining voting shares in Celcom not held by TM and the PAC with TM under Part II of the
Malaysian Code on Take-overs and Mergers, 1998 at RM2.75 per Celcom share, being the highest price paid for Celcom shares
by TM and the PAC with TM during the six (6) months prior to the date of announcement of the Proposed Disposal.
TM and the PAC with TM have committed to fulfil their obligation to undertake the MGO.
The applications to the relevant authorities on the Proposed Disposal have been made by TM but are still outstanding as at
27 February 2003.
34.
SEGMENTAL ANALYSIS
By Business
The Group operates on a worldwide basis in three main business segments:
(a)
Fixed line
– represents fixed line, data, internet and multimedia and other telecommunication related services
(b)
Cellular
– represents mobile telecommunication services
(c)
Non-telecommunication related services
– represents services provided by subsidiaries with core business in consultancy, property management, education and other
activities
Segment results represent segment operating income less segment expenses. Unallocated income includes interest income, dividend
income and gain or loss on disposal of investments. Unallocated costs represent corporate expenses and net foreign exchange
differences arising from revaluation of corporate borrowings. The accounting policies used to derive reportable segment results are
consistent with those as described in the Significant Accounting Policies.
The segment assets disclosed for each segment represent assets directly managed by each segment, primarily include receivables,
property, plant and equipment, inventories and cash and cash equivalents. Unallocated corporate assets mainly include staff loans,
other long term receivables and investments.
Segment liabilities comprise operating liabilities and exclude corporate borrowings, interest payable on corporate borrowings, tax
liabilities and deferred taxation.
Segment capital expenditure comprises additions to property, plant and equipment and additions resulting from acquisition of
subsidiary company as shown in note 16 to the financial statements.
Significant non-cash expenses comprise mainly allowances and unrealised foreign exchange losses (excluding net foreign exchange
differences arising from revaluation of corporate borrowings) as shown in note 3 to the financial statements.
230
34.
SEGMENTAL ANALYSIS (continued)
2002
Fixed line, data,
internet and
multimedia
RM
Cellular
RM
8,373.9
1,674.6
Others
RM
Total
RM
341.5
10,390.0
Operating Income
Total operating income
Inter-segment*
External operating income
(342.4)
(85.7)
(127.8)
(555.9)
8,031.5
1,588.9
213.7
9,834.1
1,891.6
100.5
33.4
2,025.5
Results
Segment result
Unallocated income
85.4
Corporate expenses
(213.1)
Foreign exchange losses
(66.3)
Operating profit before finance cost
1,831.5
Finance cost
(389.6)
Finance income
85.7
Share of profits less losses of
associated companies
38.5
4.0
—
Profit before income tax
42.5
1,570.1
Income tax
(487.4)
Profit after income tax
1,082.7
Minority interests
(26.4)
Net profit
1,056.3
Other information
Segment assets
Associated companies
19,808.5
3,922.4
1,321.8
25,052.7
986.1
552.9
—
1,539.0
Unallocated corporate assets
1,122.0
Total assets
Segment liabilities
27,713.7
3,200.4
1,587.3
157.7
Unallocated liabilities
4,945.4
7,297.3
Total liabilities
12,242.7
Capital expenditure
2,162.5
1,004.6
18.0
3,185.1
Depreciation
2,145.4
280.7
55.7
2,481.8
Property, plant and equipment written off
Significant non-cash expenses
50.9
—
—
50.9
347.6
253.0
0.2
600.8
231
34.
2001
Fixed line, data,
internet and
multimedia
RM
Cellular
RM
8,208.9
1,562.5
Others
RM
Total
RM
441.2
10,212.6
Operating Income
Total operating income
Inter-segment*
External operating income
(297.2)
7,911.7
(67.9)
1,494.6
(174.3)
(539.4)
266.9
9,673.2
73.1
2,023.7
Results
Segment result
2,167.5
(216.9)
Unallocated income
95.4
Corporate expenses
(256.2)
Foreign exchange gains
108.0
Operating profit before finance cost
1,970.9
Finance cost
(507.3)
Finance income
108.4
Share of profits less losses of associated
companies
54.8
807.6
9.2
Profit before income tax
871.6
2,443.6
Income tax
(607.8)
Profit after income tax
1,835.8
Minority interests
(23.9)
Net profit
1,811.9
Other information
Segment assets
21,425.7
3,140.0
669.5
25,235.2
933.1
132.8
0.6
1,066.5
1,086.4
Total assets
Segment liabilities
27,388.1
3,216.4
1,301.7
163.9
Unallocated liabilities
Total liabilities
12,045.2
Capital expenditure
1,937.8
741.4
37.8
2,717.0
Depreciation
2,117.7
220.3
39.6
2,377.6
Impairment loss
—
84.3
—
84.3
Property, plant and equipment written off
4.7
4.8
—
9.5
503.1
408.8
12.4
924.3
Significant non-cash expenses
232
4,682.0
7,363.2
34.
*
Inter-segment operating income has been eliminated in arriving at respective segment operating income. The inter-segment
operating income was entered into in the normal course of business and at prices available to third parties or at negotiated terms.
Although the Group operates in many countries as shown in note 17 to the financial statements, the segmentisation of Group
operation by geographical location is only segmentised to Malaysia and overseas as no individual oversea country contributed more
than 10% of consolidated operating income or assets.
In presenting information for geographical segments of the Group, sales are based on the country in which the customer is located.
There are no sales between the segments. Total assets and capital expenditure are determined based on where the assets are located.
Operating Income
Total Assets
2002
2001
2002
2001
2002
2001
RM
RM
RM
RM
RM
RM
Malaysia
9,292.8
9,179.5
23,590.4
24,049.3
2,897.2
2,511.2
Overseas
541.3
493.7
1,462.3
1,185.9
287.9
205.8
9,834.1
9,673.2
25,052.7
25,235.2
3,185.1
2,717.0
1,539.0
1,066.5
1,122.0
1,086.4
27,713.7
27,388.1
Total assets
35.
Capital Expenditure
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The main risks arising from the Group’s financial assets and liabilities are foreign exchange, interest rate, credit and liquidity risks.
The Group’s overall risk management seeks to minimise potential adverse effects of these risks on the financial performance of the
Group.
The Group has established risk management policies, guidelines and control procedures to manage its exposure to financial risks.
Hedging transactions are determined in the light of commercial commitments. Derivative financial instruments are used only to hedge
underlying commercial exposures and are not held or sold for speculative purposes.
Foreign Exchange Risk
The foreign exchange risk of the Group arises from borrowings denominated in foreign currencies. The Group has long dated and
cross-currency interest rate swaps that are primarily used to hedge selected long term foreign currency borrowings to reduce the
foreign currency exposures on these borrowings. The main currency exposures are primarily United States Dollar and Japanese Yen.
The Group also has subsidiary and associated companies operating in foreign countries, which generate revenue and incur costs
denominated in foreign currencies. The main currency exposures are primarily Guinea Franc, Bangladesh Taka, Sri Lanka Rupee and
South African Rand.
233
35.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Interest Rate Risk
The Group has cash and bank balances and deposits placed with creditworthy licensed banks and financial institutions. The Group
manages its interest rate risks by placing such balances on varying maturities and interest rate terms.
The Group’s debt includes bank overdrafts, bank borrowings, bonds, notes and debentures. The Group’s interest rate risk objective
is to manage the interest expense consistent with maintaining an acceptable level of exposure to interest rate fluctuations. In order
to achieve this objective, the Group targets a mix of fixed and floating debt based on assessment of its existing exposure and desired
interest rate profile. To obtain this mix, the Group uses combined cross-currency interest rate swaps to convert certain long term
foreign currency borrowings from variable to fixed rate or vice versa.
Credit Risk
Financial assets that potentially subject the Group to concentrations of credit risk consist primarily trade receivables, cash and cash
equivalents, marketable securities and financial instruments used in hedging activities.
Due to the nature of the Group’s business, customers are mainly segregated into business and residential. The Group has no other
major significant concentration of credit risk other than business and residential trade receivables due to its diverse customer base.
Credit risk is managed through the application of credit assessment and approvals, credit limits and monitoring procedures. Where
appropriate, the Group obtained deposits or bank guarantees from the customers.
The Group places its cash and cash equivalents and marketable securities with a number of creditworthy financial institutions. The
Group’s policy limits the concentration of financial exposure to any single financial institution.
All hedging instruments are executed with creditworthy financial institutions with a view to limit the credit risk exposure of the Group.
The Group, however, is exposed to credit-related losses in the event of non-performance by counterparties to financial derivative
instruments, but does not expect any counterparties to fail to meet their obligations.
Liquidity Risk
In the management of liquidity and cash flow risk, the Group monitors and maintains a level of cash and cash equivalent deemed
adequate by the management to finance the Group's operations and mitigate the effects of fluctuations in cash flows. Due to the
dynamic nature of the underlying business, the Group aims at maintaining flexibility in funding by keeping both committed and
uncommitted credit lines available.
36.
INTEREST RATE RISK
The table below summarises the Group and the Company’s exposure to interest rate risk. Included in the tables are the Group and
Company’s financial assets and liabilities at carrying amounts, categorised by the earlier of repricing or contractual maturity dates.
The off-balance-sheet gap represents the net notional amounts of all interest rate sensitive derivative instruments. Sensitivity to
interest rates arises from mismatches in the repricing dates, cash flows and other characteristics of assets and their corresponding
liability funding.
234
36.
INTEREST RATE RISK (continued)
THE GROUP
RM million
W.A.I.R.*
Fixed interest rate
maturing or repriced in
Floating
More
interest 1 year or
1 to 5
than
rate
less
years
5 years
Total
interest
sensitive
Balances
Nonunder
interest
Islamic
sensitive principles
Total
Financial Assets
Amount Owing by
—
—
—
—
—
—
0.4
—
0.4
Long Term Investments
—
—
—
—
—
—
139.6
—
139.6
4.00%
—
—
262.7
29.0
291.7
21.4
372.3
685.4
3.47%
12.0
39.9
—
—
51.9
3,480.7
59.4
3,592.0
Short Term Investments
—
2.17%
Total
—
—
—
—
197.7
—
197.7
(13.8)
—
1,132.8
—
—
1,119.0
197.4
504.6
1,821.0
(1.8)
1,172.7
262.7
29.0
1,462.6
4,037.2
936.3
6,436.1
Financial Liabilities
Convertible Bonds
4.00%
—
—
1,361.6
—
1,361.6
—
—
1,361.6
Total Borrowings
5.14%
1,506.2
669.1
964.4
2,459.3
5,599.0
5.8
696.3
6,301.1
Customers’ Deposits
—
—
—
—
—
—
704.5
—
704.5
Trade and Other Payables
—
—
—
—
—
—
3,596.7
—
3,596.7
1,506.2
669.1
2,326.0
2,459.3
6,960.6
4,307.0
696.3
11,963.9
(1,508.0)
503.6
Total
On-balance-sheet interest
sensitivity gap
(2,063.3) (2,430.3)
Off-balance-sheet interest
sensitivity gap
—
—
—
—
Total interest sensitivity
gap
(1,508.0)
503.6
(2,063.3) (2,430.3)
*W.A.I.R. – Weighted Average Interest Rate as at 31 December 2002
235
36.
The table below summarises the weighted average interest rate as at 31 December 2002 by major currencies for each class of
financial asset and liability:
THE GROUP
USD
JPY
RM
%
%
%
—
—
4.00%
1.73%
—
4.00%
1.44%
—
2.92%
Financial Assets
Convertible Bonds
4.00%
—
—
Total Borrowings
6.24%
2.09%
2.73%
THE COMPANY
RM million
W.A.I.R.*
Fixed interest rate
Floating
More
interest 1 year or
1 to 5
than
rate
less
years
5 years
Total
interest
sensitive
Balances
Nonunder
interest
Islamic
Total
Financial Assets
Amount Owing by
Subsidiary Companies
net of allowances
1.88%
1,494.1
—
7.7
—
1,501.8
3,138.1
—
4,639.9
Amount Owing by
—
—
—
—
—
—
0.4
—
0.4
Long Term Investments
—
—
—
—
—
—
98.3
—
98.3
4.00%
—
—
262.7
29.0
291.7
20.6
372.3
684.6
4.00%
—
39.9
—
—
39.9
2,842.9
59.4
2,942.2
—
—
—
—
—
—
197.7
—
197.7
1.94%
—
828.0
—
—
828.0
102.0
208.2
1,138.2
1,494.1
867.9
270.4
29.0
2,661.4
6,400.0
639.9
9,701.3
Short Term Investments
Total
236
36.
THE COMPANY
RM million
W.A.I.R.*
Fixed interest rate
Floating
More
interest 1 year or
1 to 5
than
rate
less
years
5 years
Total
interest
sensitive
Balances
Nonunder
interest
Islamic
Total
Convertible Bonds
4.00%
—
—
1,361.6
—
1,361.6
Total Borrowings
—
—
1,361.6
5,917.4
5.94%
1,314.0
160.0
860.6
2,888.0
5,222.6
5.8
689.0
Customers’ Deposits
—
—
—
—
—
—
614.4
—
614.4
Trade and Other Payables
—
—
—
—
—
—
2,576.5
—
2,576.5
1,314.0
160.0
2,222.2
2,888.0
6,584.2
3,196.7
689.0
10,469.9
180.1
707.9
—
—
180.1
707.9
Total
On-balance-sheet interest
sensitivity gap
(1,951.8) (2,859.0)
Off-balance-sheet interest
sensitivity gap
—
—
Total interest sensitivity
gap
(1,951.8) (2,859.0)
*W.A.I.R. – Weighted Average Interest Rate as at 31 December 2002
The table below summarises the weighted average interest rate as at 31 December 2002 by major currencies for each class of
financial asset and liability:
THE COMPANY
USD
JPY
RM
%
%
%
Financial Assets
Amount Owing by Subsidiary Companies net of allowances
4.16%
—
1.54%
—
—
4.00%
—
—
4.00%
1.46%
—
2.92%
Convertible Bonds
4.00%
—
—
Total Borrowings
6.37%
2.09%
4.67%
Due to the transitional provision of MASB 24, the interest rate risk information as at 31 December 2001 is not presented.
237
37.
CREDIT RISK
For on-balance-sheet financial instruments, the main credit risk exposure has been disclosed elsewhere in the financial statements.
Off-balance-sheet financial instruments
The Group and the Company are exposed to credit risk where the fair value of the contract is favourable, where the counterparty is
required to pay the Group or the Company in the event of contract termination. The following table summarises the favourable fair
values of the contracts, indicating the credit risk exposure.
The Group and Company
Contract or
notional
principal amount
2002
RM million
Favourable
fair value
2002
RM million
Long dated swap
750.0
47.5
Cross-currency interest rate swap
190.0
1.8
940.0
49.3
Due to the transitional provision of MASB 24, the information on credit risk concentration as at 31 December 2001 is not presented.
38.
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
The fair value of a financial instrument is assumed to be the amount at which the instrument could be exchanged or settled between
knowledgeable and willing parties in an arm's length transaction, other than in forced or liquidation sale.
Quoted market prices, when available, are used as the measure of fair values. However, for a significant portion of the Group and
the Company’s financial instruments, quoted market prices do not exist. For such financial instruments, fair values presented are
estimates derived using the net present value or other valuation techniques. The above techniques involve uncertainties and are
significantly affected by the assumptions used and judgements made regarding risk characteristics of various financial instruments,
discount rates, estimates of future cash flows, future expected loss experience and other factors. Changes in assumptions could
significantly affect these estimates and the resulting fair values.
238
38.
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (continued)
(a)
On-balance-sheet
The carrying amounts of the financial assets and liabilities of the Group and Company at the balance sheet date approximated
their fair values except as set out below:
The Group
The Company
2002
Carrying
amount
RM million
2002
Net
fair value
RM million
2002
Carrying
amount
RM million
2002
Net
fair value
RM million
Long term investments
139.6
184.9
98.3
143.6
Staff loans
331.8
289.8
331.7
289.7
Convertible bonds
1,361.6
1,378.0
1,361.6
1,378.0
Total borrowings
5,604.8
6,294.0
5,228.4
5,627.0
Financial assets
Financial liabilities
The carrying amount and net fair value of total borrowings exclude the swaps which are disclosed in note 38(b) to this financial
statements.
Financial assets
The fair value of long term investments are estimated by reference to market indicative yields or the Group and the Company’s
share of net tangible assets. Where allowances or permanent diminution in value or impairment, where applicable, is made in
respect of any investment, the carrying amount net of allowance made is deemed to be a close approximation of its fair value.
The fair value of staff loans have been estimated by discounting the estimated future cash flows using the prevailing market
rates for similar credit risks and remaining period to maturity. The fair value of staff loans is significantly lower than carrying
amount at balance sheet date as the Company and its subsidiaries charged interest rates on staff loans at below current market
rates. The Directors consider the carrying amount fully recoverable as they do not intend to realise the financial asset via
exchange with another counterparty but to hold it to contract maturity. Collaterals are taken for these loans and the Directors are
of the opinion that the potential losses in the event of default will be covered by the collateral values on individual loan basis.
For convertible education loans and amount owing by subsidiary and associated companies, it is not practicable to determine
the fair values of certain loans that do not have fixed repayment terms and are interest free. However, the carrying amounts
recorded are not anticipated to be significantly in excess of their fair values at the balance sheet date.
Financial liabilities
The fair value of convertible bonds and quoted bonds has been estimated using the respective quoted offer price. For unquoted
borrowings with fixed interest rate, the fair values have been estimated by discounting the estimated future cash flows using
the prevailing market rates for similar credit risks and remaining period to maturity. For unquoted borrowings with floating
interest rate, the carrying values are generally reasonable estimates of their fair values.
For all other short term on-balance-sheet financial instruments maturing within one year or are repayable on demand, the
carrying values are assumed to approximate their fair values.
239
38.
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES (continued)
(b)
Off-balance-sheet
The financial derivative instruments are used to hedge foreign exchange and interest rate risks associated with certain long term
foreign currency borrowings. The contract notional principal amounts of the derivative and the corresponding fair value
adjustments are analysed as below:
The Group and Company
Contract or
notional
principal amount
RM million
Net fair value
Favourable
Unfavourable
RM million
RM million
Off-Balance-Sheet Financial Derivative Instruments
Long dated swap
750.0
47.5
—
Cross-currency interest rate swap
760.0
1.8
(9.8)
Fair values of financial derivative instruments are the present values of their future cash flows and are arrived at based on
valuations carried out by the Company’s bankers. Favourable fair value indicates amount receivable by the Company if the
contracts are terminated as at 31 December 2002 or vice versa.
Due to the transitional provision of MASB 24, the fair value information as at 31 December 2001 is not presented.
39.
PRIOR YEAR ADJUSTMENTS
During the first quarter 2002, the Group changed its accounting policy with respect to the recognition of liabilities for dividend
proposed in compliance with the new MASB 19 “Events after the Balance Sheet Date”.
In previous years, dividends were accrued as a liability when proposed by Directors. The Group has now changed this accounting
policy to recognise dividends in shareholders' equity as an appropriation of retained profits in the period in which the obligation to
pay is established in accordance with MASB 19. Therefore, final dividends are now accrued as a liability after approval by shareholders
at the Annual General Meeting.
This change in accounting policy has been accounted for retrospectively. The effects of the change in accounting policy are as follows:
THE GROUP
As
previously
reported
RM million
Retained profits
– at 1 January 2001
– at 31 December 2001
Proposed dividends – at 1 January 2001
240
Effect of
change in
policy
RM million
As
restated
RM million
8,569.1
223.2
8,792.3
10,038.6
343.2
10,381.8
223.2
(223.2)
—
343.2
(343.2)
—
39.
PRIOR YEAR ADJUSTMENTS (continued)
THE COMPANY
Retained profits
As
previously
reported
RM million
Effect of
change in
policy
RM million
As
restated
RM million
– at 1 January 2001
10,935.9
223.2
11,159.1
11,452.1
343.2
11,795.3
Proposed dividends – at 1 January 2001
40.
223.2
(223.2)
—
343.2
(343.2)
—
CURRENCY
All amounts are expressed in Ringgit Malaysia (RM) unless otherwise stated.
241
Statement by Directors
pursuant to Section 169(15) of the Companies Act, 1965
We, Tan Sri Dato’ Ir. Muhammad Radzi bin Haji Mansor and Dato’ Dr. Md Khir bin Abdul Rahman being two of the Directors of Telekom
Malaysia Berhad, state that, in the opinion of the Directors, the financial statements on pages 185 to 241 are drawn up so as to exhibit a
true and fair view of the state of affairs of the Group and of the Company as at 31 December 2002 and of the results and the cash flows
of the Group and of the Company for the year ended on that date in accordance with the applicable approved accounting standards in
Malaysia and the provisions of the Companies Act, 1965.
In accordance with a resolution of the Board of Directors dated 27 February 2003.
Chairman
Chief Executive
Statutor y Declaration
I, Gazali bin Harun, being the Officer primarily responsible for the financial management of Telekom Malaysia Berhad, do solemnly and
sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 185 to 241 are correct, and I make
this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act,
1960.
Subscribed and solemnly
)
this 27 February 2003
)
Before me:
T. THANAPALASINGAM
Commissioner for Oaths
Kuala Lumpur
242
)
declared at Kuala Lumpur
GAZALI BIN HARUN
Report of the Auditors
to the Members of Telekom Malaysia Berhad (Company No. 128740-P)
We have audited the financial statements set out on pages 185 to 241. These financial statements are the responsibility of the Company’s
Directors. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with approved Auditing Standards in Malaysia. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by the Directors, as well as evaluating the overall financial statements
presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion:
(a)
the financial statements have been prepared in accordance with the provisions of the Companies Act, 1965 and applicable approved
accounting standards in Malaysia so as to give a true and fair view of:
(i)
the matters required by section 169 of the Companies Act, 1965 to be dealt with in the financial statements; and
(ii)
the state of affairs of the Group and Company as at 31 December 2002 and of the results and the cash flows of the Group
and Company for the year ended on that date;
and
(b)
the accounting and other records and the registers required by the Act to be kept by the Company and by the subsidiary companies
of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.
The names of the subsidiary companies of which we have not acted as auditors are indicated in note 17 to the financial statements. We
have considered the financial statements of these subsidiary companies and the auditors' reports thereon.
We are satisfied that the financial statements of the subsidiary companies that have been consolidated with the Company’s financial
statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and
we have received satisfactory information and explanations required by us for those purposes.
The auditors’ reports on the financial statements of the subsidiary companies were not subject to any material qualification and did not
include any comment made under subsection (3) of section 174 of the Act.
PRICEWATERHOUSECOOPERS
ABDUL RAHIM HAMID
(AF: 1146)
[904/03/04(J/PH)]
Chartered Accountants
Partner
Kuala Lumpur
Date: 27 February 2003
243
General Information
1.
as at 31 De c e m b e r 2 0 0 2
Telekom Malaysia Berhad is a public limited liability Company, incorporated and domiciled in Malaysia, and listed on the Main Board
of the Kuala Lumpur Stock Exchange.
2.
The address of the registered office of the Company is:
Menara Telekom
50672 Kuala Lumpur
3.
The principal office and place of business of the Company is:
Company Secretarial Division
Menara Telekom
50672 Kuala Lumpur
4.
244
The average number of employees at the end of the financial year amounted to:
2002
2001
Group
31,940
32,694
Company
24,354
24,754
Shareholding Statistics
as at 17 March 2003
ANALYSIS OF SHAREHOLDINGS
Share Capital
Authorised Share Capital
: 5,000,000,001
Issued and Fully Paid-up Capital
: 3,171,835,381
Class of Shares
: 3,171,835,380 ordinary shares of RM1 each and 1 (one) Special Rights Redeemable Preference
Voting Rights
: One vote per ordinary share.
Share of RM1 each and fully paid.
The Special Share has no voting right other than those referred to in note 9(a) to the financial
statements.
DISTRIBUTION OF SHAREHOLDINGS
Size of Shareholdings
Shareholders
Malaysian
Shares
Foreign
Malaysian
Foreign
No
%
No
%
No
%
No
%
731
2.94
616
2.48
230,019
0.01
254,393
0.01
20,442
82.21
1,392
5.60
48,656,994
1.53
3,704,830
0.12
1,036
4.16
246
0.99
28,578,695
0.90
9,187,392
0.29
250
1.00
148
0.60
465,221,696
14.67
80,428,224
2.53
5
0.02
—
—
2,535,573,138
79.94
—
—
22,464
90.33
2,402
9.67 3,078,260,542
97.05
93,574,839
2.95
Less than 1,000
1,000 – 10,000
10,001 – 100,000
100,001 – 158,591,769
(5% of paid-up capital)
More than 158,591,769
TOTAL
2002 MONTHLY TRADING VOLUME & HIGHEST-LOWEST SHARE PRICE
Volume Share ('000)
Share Price (RM)
48,000
9.6
51,555
12.0
50,737
60,000
41,010
37,170
35,369
7.2
Jan
Volume
Feb
Mar
Highest
Apr
May
Jun
Jul
Aug
Sep
Oct
7,247
0
12,713
17,208
9,418
12,000
19,645
4.8
23,496
24,000
29,142
36,000
Nov
2.4
0
Dec
Lowest
245
List of Top 30 Shareholders
as at 17 March 2003
No. Name
Shares
Percentage
Held
(%)
1,079,724,854
34.04
1.
Khazanah Nasional Berhad
2.
Minister of Finance
605,394,784
19.09
3.
Employees Provident Fund Board
429,384,500
13.54
4.
Bank Negara Malaysia
251,680,000
7.93
5.
Permodalan Nasional Berhad
169,389,000
5.34
6.
Kumpulan Wang Amanah Pencen
57,551,000
1.81
7.
Amanah Raya Nominees (Tempatan) Sdn. Bhd.
28,217,000
0.89
Amanah Saham Malaysia
8.
Lembaga Tabung Haji
26,598,136
0.84
9.
Malaysia Nominees (Tempatan) Sendirian Berhad
23,571,220
0.74
20,410,000
0.64
Great Eastern Life Assurance (Malaysia) Berhad (PAR 1)
10.
Skim Amanah Saham Bumiputera
11.
Bank Simpanan Nasional
19,822,000
0.62
12.
Valuecap Sdn. Bhd.
17,498,000
0.55
13.
13,627,000
0.43
Skim Amanah Saham Nasional
14.
Pertubuhan Keselamatan Sosial
9,797,500
0.31
15.
7,416,000
0.23
16.
6,105,000
0.19
17.
Malaysia National Insurance Berhad
5,966,000
0.19
18.
AMMB Nominees (Tempatan) Sdn. Bhd.
5,940,000
0.19
AMTrustee Berhad For BHLB Pacific Dana Al-Ihsan (5/2-7)
19.
Lembaga Tabung Angkatan Tentera
5,749,000
0.18
20.
5,703,000
0.18
5,250,000
0.17
Amanah Saham Wawasan 2020
21.
Citicorp Nominees (Tempatan) Sdn. Bhd.
Ing Insurance Berhad (INV-IL PAR)
22.
5,124,000
0.16
23.
Citicorp Nominees (Asing) Sdn. Bhd.
4,867,311
0.15
4,724,000
0.15
American International Assurance Company Limited (P Core)
24.
246
No. Name
Shares
Percentage
Held
(%)
25.
4,712,000
0.15
26.
Malaysia Nominees (Tempatan) Sendirian Berhad
4,686,000
0.15
Great Eastern Life Assurance (Malaysia) Berhad (PAR 2)
27.
4,676,000
0.15
28.
4,615,000
0.15
29.
Lembaga Tabung Haji
4,583,500
0.14
30.
Citicorp Nominees (Asing) Sdn. Bhd.
4,570,000
0.14
2,837,351,805
89.44
Shares
Percentage
Held
(%)
1,079,724,854
34.04
CB Ldn For Stichting Shell Pensioenfonds
TOTAL
SUBSTANTIAL SHAREHOLDERS’ HOLDINGS (5% AND ABOVE)
No. Name
1.
Khazanah Nasional Berhad
2.
Minister of Finance
605,394,784
19.09
3.
Employees Provident Fund Board
429,384,500
13.54
4.
Bank Negara Malaysia
251,680,000
7.93
5.
Permodalan Nasional Berhad
169,389,000
5.34
2,535,573,138
79.94
TOTAL
247
Shareholders and Investor Information
REGISTRAR
Tenaga Koperat Sdn. Bhd. (118401-V)
20th Floor, Plaza Permata (formerly known as IGB Plaza)
Jalan Kampar
Off Jalan Tun Razak
50400 Kuala Lumpur
Tel. : 03-4041 6522
Fax
: 03-4042 6352
LISTING
The Company’s shares are listed on the Kuala Lumpur Stock Exchange in Malaysia.
MALAYSIAN TAXES ON DIVIDEND
Malaysia practised an imputation system in the distribution of the dividends whereby the income tax paid by a company is imputed to
dividends distributed to shareholders.
Malaysian income tax is deducted or deemed to have been deducted at corporate tax rate, which is currently at 28%, from dividends paid
by a company residing in Malaysia.
The income tax deducted or deemed to have been deducted from dividend is accounted for by the income tax of the company. There is
no further tax or witholding tax on the payment of dividends to all shareholders.
The Annual Report is available to the public who are not shareholders of the Company, by writing to:
General Manager
Corporate Communications Unit
Corporate Affairs Division
Level 8, South Wing, Menara Telekom
50672 Kuala Lumpur
Fax
248
: 03-7955 2510
Net Book Value of Land & Buildings
Net Book Net Book
Freehold
Leasehold
Area
Location
1.
Other Land*
Area
Excepted Land**
Area
Value
Area
Value of
of Land Buildings
No. of
(’000
No. of
(’000
No. of
(’000
No. of
(’000
RM
RM
Lots
sq ft)
Lots
sq ft)
Lots
sq ft)
Lots
sq ft)
(million)
(million)
15
1,152
5
411
9
1,343
–
–
126.9
1,463.1
Federal Territory
a.
Kuala Lumpur
b.
Labuan
–
–
–
–
4
262
–
–
–
9.1
2.
Selangor
8
8,720
16
25,429
8
295
97
16,698
147.7
598.8
3.
Perlis
–
–
4
52
–
–
14
750
0.4
4.5
4.
Perak
4
17
13
616
6
131
119
7,780
40.8
91.2
5.
Pulau Pinang
2
5
18
1,398
–
–
60
15,431
7.8
44.9
6.
Kedah
7
488
13
1,388
–
–
55
2,818
11.2
79.2
7.
Johor
5
106
25
1,223
16
539
138
14,097
4.4
103.4
8.
Melaka
2
3
16
50,956
4
11,563
38
4,457
8.2
128.9
9.
Negeri Sembilan
19
47,565
9
321
6
317
71
9,371
52.3
38.1
10.
Terengganu
–
–
13
713
3
65
41
6,285
1.4
46.2
11.
Kelantan
–
–
8
356
2
43
41
2,234
0.8
28.0
12.
Pahang
4
87
25
1,420
8
174
98
8,409
3.6
95.5
13.
Sabah
–
–
13
140
6
196
76
26,290
7.4
95.2
14.
Sarawak
5
202
27
860
10
218
109
10,284
26.1
117.7
15.
Sri Lanka
7
92
–
–
–
–
–
–
5.5
9.0
16.
Malawi
–
–
18
92
–
–
–
–
–
0.7
17.
Republic of Guinea
61
5,751
–
–
10
162
–
–
7.7
13.1
18.
Bangladesh
7
357
–
–
–
–
–
–
0.9
1.2
19.
South Africa
6
53
–
–
–
–
–
–
2.4
2.1
20.
Cambodia
–
–
–
–
–
–
–
–
–
1.6
152
64,598
223
85,375
92
15,308
957
124,904
455.5
2,971.5
Total
No revaluation has been made on any of the land and buildings.
*
The title deeds pertaining to other land have not yet been registered in the name of the Company. Pending finalisation with the relevant
authorities, the land have not been classified according to their tenure and land areas are based on estimation.
** Excepted land are lands situated outside the Federal Territory which are either alienated land, reserved land owned by the Federal
Government or land occupied, used, controlled and managed by the Federal Government for federal purposes (in Melaka, Pulau Pinang,
Sabah and Sarawak) as set out in Section 3(2) of the Telecommunication Services (Successor Company) Act, 1985. The Government
has agreed to lease these land to Telekom Malaysia Berhad for a term of 60 years with an option to renew, under article 85 and 86
of the Federal Constitution.
249
Usage of Properties
Transmission
Location
1.
Office
Satellite/
Kedai TM/
Telecom-
Submarine
Primatel/
munication/
Stores/
Cable
Buildings Residential Warehouses
Stations
Business
Resort
Centre
Tourism
Exchanges
Station
University
Tower
25
6
22
27
19
1
–
–
–
1
3
2
1
4
12
2
–
–
–
–
Federal Territory
a. Kuala Lumpur
b. Labuan
Selangor
85
12
17
–
41
–
–
6
1
–
Perlis
10
–
–
2
1
–
–
1
–
–
4.
Perak
68
19
32
81
42
–
–
2
–
–
5.
Pulau Pinang
23
–
17
33
23
2
1
4
–
–
6.
Kedah
48
10
4
26
11
–
1
2
–
1
7.
Johor
85
16
7
51
22
1
–
3
–
–
8.
Melaka
18
2
5
23
7
2
–
1
1
–
9.
Negeri Sembilan
31
14
4
16
–
1
2
1
–
–
10.
Terengganu
33
12
5
15
6
–
–
–
–
–
11.
Kelantan
23
3
7
18
13
–
–
1
–
–
12.
Pahang
44
20
13
49
17
3
4
1
–
–
13.
Sabah
40
33
21
22
22
2
1
3
–
–
14.
Sarawak
72
39
24
47
25
1
–
–
–
–
15.
Sri Lanka
–
2
3
–
2
–
–
–
–
–
16.
Malawi
–
21
–
–
–
–
–
–
–
–
17.
Guinea
19
78
26
5
4
1
–
–
–
–
18.
Bangladesh
–
7
–
–
–
–
–
–
–
–
19.
South Africa
–
–
–
6
–
–
–
–
–
–
20.
Cambodia
1
–
–
–
–
–
–
–
–
–
250
2.
3.
Group Director y
HEAD OFFICE:
Level 51, North Wing, Menara Telekom, Off Jalan Pantai Baharu, 50672 Kuala Lumpur
Tel.
: 03-2240 9494
Fax
: 03-2283 2415
Website : www.telekom.com.my
WILAYAH PERSEKUTUAN KUALA LUMPUR
General Manager, State Business Operation
TELEKOM MALAYSIA BERHAD
Tingkat 25, Menara Weld
76, Jalan Raja Chulan
50200 Kuala Lumpur
Tel. : 03-2020 6186
Fax : 03-2070 2355
Customer Service Centre
Primatel Business Centre
Consumer And Business
Tingkat 1A, Bangunan Bukit Mahkamah
Jalan Raja Chulan, 50200 Kuala Lumpur
Tel. : 03-2026 1010
Fax : 03-2031 4460
Tingkat 25, Menara Weld
76, Jalan Raja Chulan
50200 Kuala Lumpur
Tel. : 03-2020 5335
Fax : 03-2070 2020
Kedai Telekom
KEPONG
16, Jalan 54, Desa Jaya, 52100 Kepong
Tel. : 03-6276 9191
Fax : 03-6275 0445
WISMA TELEKOM SEMARAK
Level 1 No. 82, Wisma Telekom Semarak
Jalan Raja Muda Abdul Aziz
Kuala Lumpur
Tel. : 03-2687 3838
Fax : 03-2681 0421
BUKIT MAHKAMAH
Tingkat 1B, Bangunan Telekom
Tel. : 03-2072 9191
Fax : 03-2031 6730
MUZIUM
Tingkat Bawah, Bangunan Muzium Telekom
Tel. : 03-2072 6084
Fax : 03-2070 2569
KOMPLEKS DAMAI
Tingkat 1, Wisma Kotamas
94, Jalan Dato Hj Eusoff
50400 Kuala Lumpur
Tel. : 03-4041 0289
Fax : 03-4041 1988
SHOWROOM
Tingkat Bawah, Wisma Telekom
Jalan Pantai Baharu
59200 Kuala Lumpur
Tel. : 03-2020 2059
Fax : 03-7956 4543
TMTOUCH Service Centres
REGIONAL OFFICE
7th Floor, Wisma Telekom Semarak
82, Jln Raja Muda Abdul Aziz
50300 Kuala Lumpur
Tel. : 03-2687 3838
Fax : 03-2681 0385
MALURI
Lot 1 & 2, Block 154
Maluri Business Centre
Jalan Jejaka, Taman Maluri
55100 Kuala Lumpur
Tel. : 03-9285 9292
Fax : 03-9285 9595
CHERAS
62, Jalan Manis 3
Taman Segar, Cheras
56100 Kuala Lumpur
Tel. : 03-9132 4379
Fax : 03-9132 4373
SETAPAK
Tingkat Bawah, Bangunan Ibusawat
Telekom Setapak, 44, Persiaran Kuantan
53200 Kuala Lumpur
Tel. : 03-4022 9191
Fax : 03-4022 9292
SELAYANG
No 115, Jalan 2/3A
Pusat Bandar Utara, KM 12
Jalan Ipoh, 68100 Kuala Lumpur
Tel. : 03-6136 9766/9813
Fax : 03-6136 9866/9877
MEDAN TUANKU
Ground Floor, No 7 & 9
Jalan Medan Tuanku Satu
50300 Kuala Lumpur
Tel. : 03-2694 1313
Fax : 03-2694 3463
TM Net Service Centre
Internet registration and bill payment
services are available at Kedai Telekom.
251
Group Director y
SELANGOR/PETALING JAYA
Tingkat 1, Wisma Telekom Shah Alam
No. 6, Persiaran Damai, Seksyen 11
40000 Shah Alam
Tel. : 03-5518 8700
Fax : 03-5512 5133
MBS PJ, 2nd Floor Menara PKNS
Jalan Sultan, 46050 Petaling Jaya
Tel. : 03-7968 2010
Fax : 03-7955 9495
Tingkat Bawah, Wisma Telekom Shah Alam
No. 6, Persiaran Damai, Seksyen 11
40000 Shah Alam
Tel. : 03-5518 8888
Fax : 03-5518 8800
Kedai Telekom
BANTING
Bangunan Ibusawat Telekom
Jalan Chempaka, 42400 Banting
Tel. : 03-3187 2422
Fax : 03-3187 9791
PORT KLANG
2-1, Tingkat 2, Hentian Pelabuhan Klang
Persiaran Raja Muda Musa
42000 Port Klang
Tel. : 03-3166 9191
Fax : 03-3166 9292
AMPANG
42, Jalan Memanda 7
Ampang Point, 68000 Ampang
Tel. : 03-4251 9191
Fax : 03-4252 8282
RAWANG
Lot 21, Jalan Maxwell, 48000 Rawang
Tel. : 03-6091 9191
Fax : 03-6091 8000
KUALA KUBU BARU
Tingkat 1, Ibusawat Telekom
Kuala Kubu Bahru, Jalan Rasathurai
44000 Kuala Kubu Baru
Tel. : 03-6064 1191
Fax : 03-6064 3700
BUKIT RAJA (KELANG)
Jalan Meru, 41050 Kelang
Tel. : 03-3341 9191
Fax : 03-3342 9292
SHAH ALAM
Bgn. Telekom Shah Alam, Persiaran Damai
Seksyen 11, 40150 Shah Alam
Tel. : 03-5510 9191
Fax : 03-5510 5500
KUALA SELANGOR
Bangunan Telekom
Jalan Klinik, 45000 Kuala Selangor
Tel. : 03-3289 3030
Fax : 03-3289 3300
SABAK BERNAM
35, Jalan Menteri, 45200 Sabak Bernam
Tel. : 03-3216 2716
Fax : 03-3216 2058
DAMANSARA UTAMA
91-93, Jalan SS21/1A
Damansara Utama, 47400 Petaling Jaya
Tel. : 03-7727 9191
Fax : 03-7726 9292
PETALING JAYA
20, Jalan Yong Shook Lin
46050 Petaling Jaya
Tel. : 03-7956 9191
Fax : 03-7954 0326
SUBANG JAYA
85, Jalan SS15/5A, 47500 Subang Jaya
Tel. : 03-5631 9191
Fax : 03-5633 6764
KAJANG
Tingkat Bawah, Bangunan Ibusawat
Telekom Kajang
Bt 14 1/2, Jalan Cheras, 43400 Kajang
Tel. : 03-8736 9191
Fax : 03-8733 2000
PETALING JAYA
No. 12B, Jalan 14/20
46100 Petaling Jaya
Tel. : 03-7958 7299
Fax : 03-7958 6466/7466
AMPANG
Unit B2/1/1, One Ampang Business Avenue
Jalan Ampang Utama, Off Jalan Ampang
68000 Ampang
Tel. : 03-4253 5400
Fax : 03-4257 4299/5299
KLANG SERVICE CENTRE
No. 1, Lorong Tiara 1A
Bandar Baru Klang, 41150 Klang
Tel. : 03-3343 1003
Fax : 03-3343 1001
DAMANSARA UTAMA SERVICE CENTRE
43-45 Gound & Mezz Floor
Jalan SS21/1A, Damansara Utama
47400 Petaling Jaya
Tel. : 03-7729 3600
Fax : 03-7727 3600
HOUSE OF INTERNET
Ground Floor, Kelana Park View Tower
No. 1, Jalan SS 6/2
47301 Kelana Jaya
Tel. : 03-7804 8176
Fax : 03-7804 5910
E-mail: [email protected]
services are also available at Kedai
Telekom.
KEDAH/PERLIS
Jalan Kolam Air
05672 Alor Setar
Tel. : 04-730 2552
Fax : 04-733 9090
252
Jalan Kolam Air
05672 Alor Setar
Tel. : 04-731 9255
Fax : 04-730 0630
71-72, A&B, Primatel Business Centre
Lebuhraya Darul Aman
05100 Alor Setar
Tel. : 04-720 2143
Fax : 04-733 4770
Kedai Telekom
KANGAR
Jalan Bukit Lagi, 01000 Kangar
Tel. : 04-976 2101
Fax : 04-976 4688
ALOR SETAR
Menara Alor Setar
Lebuhraya Darul Aman
05100 Alor Setar
Tel. : 04-731 9191
Fax : 04-733 2733
JITRA
19A, Jalan PJ 1, Pekan Jitra 2
06000 Jitra
Tel. : 04-918 2043
Fax : 04-917 1210
LANGKAWI
Jalan Pandak Mayah 6, 07000 Kuah
Tel. : 04-966 7202
Fax : 04-966 7292
SUNGAI PETANI
Bgn. Telekom, Jalan Petani
08000 Sungai Petani
Tel. : 04-420 9186
Fax : 04-421 9912
KULIM
71 & 72, Jalan Raya, 09000 Kulim
Tel. : 04-496 1011
Fax : 04-490 1667
SG. PETANI
No. C-68 Jalan Permatang Gedong
Taman Sejati Indah, 08000 Sungai Petani
Tel. : 04-431 1313
Fax : 04-431 0303
LANGKAWI
No. 2 Jalan Pandak Mayah 1
Pusat Bandar Kuah, 07000 Langkawi
Tel. : 04-966 1800
Fax : 04-966 2800
TMTOUCH Service Centre
ALOR SETAR
No 163, Jalan Putra, 05100 Alor Setar
Tel. : 04-734 3030
Fax : 04-734 3131
PULAU PINANG
Tingkat 1, Bangunan ESK
10400 Pulau Pinang
Tel. : 04-227 8000
Fax : 04-227 3122
Kedai Telekom
BUKIT MERTAJAM
Jalan Amurugam Pillai
14000 Bkt. Mertajam
Tel. : 04-539 9191
Fax : 04-539 9339
BAYAN BARU
No. 68, Tingkat Bawah
Jalan Mahsuri, 11950 Bayan Baru
Tel. : 04-642 9292
Fax : 04-642 2929
JALAN BURMAH
Jalan Burmah, 10050 Pulau Pinang
Tel. : 04-220 9191
Fax : 04-228 2929
LEBUH DOWNING
Bgn. Tuanku Syed Putra
Lebuh Downing, 10300 Pulau Pinang
Tel. : 04-220 9321
Fax : 04-262 7500
Tingkat 1, Jalan Burmah
10050 Pulau Pinang
Tel. : 04-226 9595
Fax : 04-226 0254
SUNGAI BAKAP
1282, Jalan Besar, 14200 Sungai Bakap
Tel. : 04-582 4444
Fax : 04-582 2014
SEBERANG JAYA
No. 31, Jalan Todak 4
Pusat Bandar Sunway
13700 Seberang Jaya, Pulau Pinang
Tel. : 04-397 3131
Fax : 04-398 3131
JELUTONG
No. 354, KLMN, Jalan Jelutong
11600 Jelutong, Pulau Pinang
Tel. : 04-282 4941
Fax : 04-281 8501
REGIONAL OFFICE
Plot 1, Lot 5344, Lorong Jelawat 4
Seberang Jaya, 13700 Pulau Pinang
Tel. : 04-397 3030
Fax : 04-397 4040/398 3232
BUTTERWORTH
4819, Tingkat 1, Jalan Pantai
Taman Selatan, 12000 Butterworth
Tel. : 04-331 9191
Fax : 04-332 3399
253
Group Director y
PERAK
Aras 2, Wisma Telekom
Jalan Sultan Idris Shah, 30672 Ipoh
Tel. : 05-241 2195/249 9121
Fax : 05-241 2185
Bangunan Telekom
Jalan Dato’ Onn Jaafar, 30300 Ipoh
Tel. : 05-249 9171
Fax : 05 255 1717
Aras Mezzanine, Wisma Telekom
Jalan Sultan Idris Shah, 30672 Ipoh
Tel. : 05-249 9192/9189
Fax : 05-254 9696
Kedai Telekom
TELUK INTAN
Bangunan Telekom
Jalan Jawa, 36672 Teluk Intan
Tel. : 05-625 9221
Fax : 05-621 8453
SITIAWAN
178 & 179 Taman Sitiawan Maju
32000 Sitiawan
Tel. : 05-691 9191
Fax : 05-691 6252
PARIT BUNTAR
36, Persiaran Perwira
Pusat Bandar, 34200 Parit Buntar
Tel. : 05-716 9191
Fax : 05-716 9600
TAPAH
Bangunan Telekom
Jalan Stesyen, 35672 Tapah
Tel. : 05-401 9191
Fax : 05-401 3932
KUALA KANGSAR
Bangunan Telekom
Jalan Raja Chulan, 33000 Kuala Kangsar
Tel. : 05-776 9191
Fax : 05-716 1522
TANJUNG MALIM
Jalan Besar, 35900 Tanjung Malim
Tel. : 05-459 7210
Fax : 05-459 6633
GRIK
No. 68, Jalan Tun Saban, 33300 Grik
Tel. : 05-791 1191
Fax : 05-791 1701
IPOH
Wisma Telekom, Jalan Sultan Idris Shah
30672 Ipoh
Tel. : 05-253 7788
Fax : 05-254 8111
BATU GAJAH
No. 26, Jalan Dewangsa
31672 Batu Gajah
Tel. : 05-366 9191
Fax : 05-366 2988
TASEK
Jalan Sultan Azlan Shah Utara
31400 Ipoh
Tel. : 05-545 9191
Fax : 05-547 2257
KAMPAR
Bangunan Telekom
Jalan Baru, 31900 Kampar
Tel. : 05-466 9191
Fax : 05-466 9393
TAIPING
Bangunan Telekom, Jalan Berek
34672 Taiping
Tel. : 05-808 5600
Fax : 05-808 4331
SUNGAI SIPUT
Jalan Sungai Buloh
31000 Sungai Siput
Tel. : 05-598 9191
Fax : 05-598 5519
IPOH
95 & 97, Jalan Sultan Iskandar Shah
30000 Ipoh
Tel. : 05-253 3313
Fax : 05-254 3313
NEGERI SEMBILAN
Jalan Dato’ Hamzah
70000 Seremban
Tel. : 06-765 1888
Fax : 06-767 7888
254
Jalan Dato’ Hamzah
70000 Seremban
Tel. : 06-765 1190
Fax : 06-763 4444
Suite 7, Wisma Arab-Malaysian
Jalan Tuanku Munawir
70000 Seremban
Tel. : 06-765 1010/1257
Fax : 06-761 3366/9696
Kedai Telekom
SEREMBAN
Jalan Dato Hamzah, 70000 Seremban
Tel. : 06-765 1085
Fax : 06-762 9394
PORT DICKSON
Jalan Pantai, Batu 2, 71000 Port Dickson
Tel. : 06-647 2191
Fax : 06-647 4200
KUALA PILAH
Jalan Bahau, 72000 Kuala Pilah
Tel. : 06-481 1191
Fax : 06-481 2000
TAMPIN
Jalan Besar, 73000 Tampin
Tel. : 06-441 2191
Fax : 06-441 4191
SEREMBAN
Lot 3-G & 3-1 Wisma Arab-Malaysian
Jalan Tuanku Munawir
70000 Seremban
Tel. : 06-761 5080
Fax : 06-764 0920
MELAKA
Aras 2, Kompleks Kotamas
Leboh Ayer Keroh, 75450 Melaka
Tel. : 06-252 2366
Fax : 06-230 8220
Bangunan Unit 2, Jalan Banda Kaba
75000 Melaka
Tel. : 06-292 9292
Fax : 06-282 8534
Lot F9-F15 Bangunan Peringgit Point
Jalan Batu Hampar
75350 Peringgit Melaka
Tel. : 06-292 5012
Fax : 06-281 4445
Kedai Telekom
MELAKA
527&529 A, Plaza Melaka
Jalan Gajah Berang, 75200 Melaka
Tel. : 06-292 5801
Fax : 06-281 1000
MELAKA
No. 233, Taman Melaka Raya
75000 Melaka
Tel. : 06-281 4800
Fax : 06-281 1311/283 3800
ALOR GAJAH
Batu 14 1/2, Jalan Melaka Kendong
78000 Alor Gajah, Melaka
Tel. : 06-556 2292
Fax : 06-556 5724
JOHOR
Aras 5, Wisma Telekom
Jalan Sutera 3, Taman Sentosa
80150 Johor Bahru
Tel. : 07-228 1001
Fax : 07-339 1919
Tingkat 4, Ibusawat Telekom Senai
81400 Senai
Tel. : 1050
Fax : 1 800 88 9393
Wisma Telekom Pelangi
Jalan Sutera 3, Taman Sentosa
80150 Johor Bahru
Tel. : 1 800 88 9595
Fax : 1 800 88 9696
Kedai Telekom
SKUDAI
Tingkat Bawah Ibusawat Telekom
Bt. 9 1/2 Jalan Skudai, 81300 Skudai
Tel. : 07-557 9191
Fax : 07-557 1999
PONTIAN
Tingkat 1, Ibusawat Telekom
Jalan Alsagoff, 82000 Pontian
Tel. : 07-687 9191
Fax : 07-687 3800
JOHOR BAHRU
Jalan Abdullah Ibrahim
80672 Johor Bahru
Tel. : 07-228 1128
Fax : 07-222 7171
255
Group Director y
KLUANG
Jalan Sultanah, 86000 Kluang
Tel. : 07-771 9191
Fax : 07-772 9111
SEGAMAT
Jalan Pawang, 85000 Segamat
Tel. : 07-933 3235
Fax : 07-933 2517
BATU PAHAT
40 & 42, Jalan Rahmat, 83000 Batu Pahat
Tel. : 07-435 9292
Fax : 07-431 4888
MUAR
37A Jalan Ibrahim, 84000 Muar
Tel. : 06-952 9595
Fax : 06-951 5916
KOTA TINGGI
No. 2-4, Jalan Indah, Taman Medan Indah
81900 Kota Tinggi
Tel. : O7-883 1191
Fax : 07-883 4999
KULAI
Jalan Air Hitam, 81000 Kulai
Tel. : 07-663 9191
Fax : 07-663 5800
PELANGI
Pelangi Business Centre, Jalan Kasa
Taman Sentosa, 80150 Johor Bahru
Tel. : 07-228 1151
Fax : 07-331 9999
MERSING
Jalan Dato Timur, 86800 Mersing
Tel. : 07-799 5291
Fax : 07-799 5000
YONG PENG
Jalan Muar, 83700 Yong Peng
Tel. : 07-467 1191
Fax : 07-467 3888
PASIR GUDANG
17 & 19, Jalan 9/7, Jalan Perjiranan 9
81700 Pasir Gudang
Tel. : 07-251 9191
Fax : 07-251 4999
PERMAS JAYA
No. 6, Jalan Permas 10/7
Bandar Baru Permas Jaya
81750 Masai, Johor
Tel. : 07-387 8662/8613
Fax : 07-387 6268
JOHOR BAHRU
No. 1, Jalan Kuning 2, Taman Pelangi
80400 Johor Bahru, Johor
Tel. : 07-335 3199
Fax : 07-335 3200/332 7200
BATU PAHAT
No 22, Jalan Maju, Taman Maju
83000 Batu Pahat, Johor Darul Takzim
Tel. : 07-433 8677
Fax : 07-433 5277
REGIONAL OFFICE
No. 6, Jalan Permas 10/7
Bandar Baru Permas Jaya
81750 Masai, Johor
Tel. : 07-387 8633
Fax : 07-388 1623
PAHANG
Tingkat 5, Bangunan UMNO
Jalan Hj. Abdul Aziz, 25000 Kuantan
Tel. : 09-512 9353
Fax : 09-513 6644
Kedai Telekom
KUALA LIPIS
10, Jalan Bukit Bius, 27200 Kuala Lipis
Tel. : 09-312 2191
Fax : 09-312 3191
KUANTAN
Tingkat Bawah, Bangunan UMNO
Jalan Hj. Abd. Aziz, 25000 Kuantan
Tel. : 09-514 2088
Fax : 09-513 9289
MENTAKAB
Jalan Tun Razak, 28400 Mentakab
Tel. : 09-270 1164
Fax : 09-277 2191
BENTONG
111, Bgn. Persatuan Bola Sepak
Jalan Ah Peng, 28700 Bentong
Tel. : 09-222 7977
Fax : 09-222 8050
256
Tingkat 4, Bangunan Telekom
Jalan Mahkota, 25000 Kuantan
Tel. : 09-515 2292
Fax : 09-514 5151
RAUB
Jalan Kuala Lipis, 27600 Raub
Tel. : 09-355 3191
Fax : 09-355 5191
REGIONAL OFFICE
45, Jalan Tanah Putih
25100 Kuantan
Tel. : 09-512 1265/1088
Fax : 09-515 8686
KUANTAN
45, Jalan Tanah Putih
25100 Kuantan
Tel. : 09-513 8686
Fax : 09-512 1088
TERENGGANU
Tingkat 4, Bangunan Telekom
Jalan Sultan Ismail
20200 Kuala Terengganu
Tel. : 09-620 2525
Fax : 09-624 2727
Kedai Telekom
DUNGUN
Jalan Nibong, 23000 Dungun
Tel. : 09-845 5354
Fax : 09-844 4111
KUALA TERENGGANU
Bangunan Telekom, Jalan Sultan Ismail
Tel. : 09-623 2191
Fax : 09-624 5200
KEMAMAN
Jalan Masjid, 24000 Kemaman
Tel. : 09-859 3191
Fax : 09-859 2411
Ibusawat Telekom Hiliran
Jalan Sultan Muhamad
Tel. : 09-620 9292
Fax : 09-624 4628
KUALA TERENGGANU
Ground & Mezz. Floor
No. 42 Wisma Isaacs, Jalan Dato’ Isaacs
Tel. : 09-622 6800/624 1186
Fax : 09-623 0800/624 6161
KELANTAN
Tingkat 1, Bangunan Pentadbiran
Jalan Doktor, 15000 Kota Bharu
Tel. : 09-743 4545
Fax : 09-744 3447
Kedai Telekom
KUALA KRAI
Lot 1522, Jalan Tengku Zainal Abidin
18000 Kuala Krai
Tel. : 09-966 6191
Fax : 09-966 3228
KOTA BHARU
Tel. : 09-744 9191
Fax : 09-743 8079
PASIR MAS
606 Jalan Masjid Lama, 17000 Pasir Mas
Tel. : 09-790 9191
Fax : 09-790 0427
TANAH MERAH
4088 Jalan Ismail Petra
17500 Tanah Merah
Tel. : 09-955 6191
Fax : 09-955 7431
Tingkat 3, Bangunan Unit 1
Bhg. Pusat Perkhidmatan Pelanggan
Tel. : 09-744 9292 Ext. 421
Fax : 09-743 1568
PASIR PUTEH
258B, Jalan Sekolah Laki-Laki
16800 Pasir Puteh
Tel. : 09-786 7191
Fax : 09-786 7313
KOTA BHARU SERVICE CENTRE
Lot PT166, Seksyen 26
Jalan Dusun Muda
15400 Kota Bharu, Kelantan
Tel. : 09-747 8800
Fax : 09-747 9800
257
Group Director y
SABAH
Jalan Tunku Abdul Rahman
88672 Kota Kinabalu
Tel. : 088-299 888/838
Fax : 088-248 378
Tingkat Bawah Telekom Malayia
Jalan Tunku Abdul Rahman
88672 Kota Kinabalu
Tel. : 088-299 714
Fax : 088-299 716
1st Floor, Lot 67-69, Block J
Jalan Ikan Juara 3, Sadong Jaya Complex
88100 Kota Kinabalu, Sabah
Tel. : 088-299 257
Fax : 088-269 696
Kedai Telekom
BEAUFORT
Choong Street, P.O Box 269
89800 Beaufort
Tel. : 087-212 292
Fax : 087-211 411
SANDAKAN
Lot 78, Ground Floor
Bandar Pasaraya, Jalan Utara Batu 4
90000 Sandakan
Tel. : 089-201 800/313
Fax : 089-201 333/224 800
SADONG JAYA
Bangunan Telekom, 88100 Sadong Jaya
Tel. : 088-299 380
Fax : 088-257 979
L. TERBANG K. KINABALU
88100 K. Kinabalu
Tel. : 088-261 261
Fax : 088-232 311
TAWAU
T.B. 307, Blok 35, Kompleks Fajar
Jalan Perbandaran, 91000 Tawau
Tel. : 089-773 131
Fax : 089-761 600
LAHAD DATU
MOLD 3307, Ground Floor
Kompleks Fajar, Jalan Segama
91100 Lahad Datu
Tel. : 089-881 160
Fax : 089-888 500
SANDAKAN
Tingkat 6, Wisma Khoo Siak Chiew
Jalan Buli Slim, 90009 Sandakan
Tel. : 089-219 191
Fax : 089-216 000
KENINGAU
Commercial Centre
Jalan Arusap, Off Jalan Masak
Blok B7, Lot 13 & 14
89007 Keningau
Tel. : 087-333 496
Fax : 087-335 000
KUDAT
Jalan Wak Siak, 89058 Kudat
Tel. : 088-611 022
Fax : 088-612 690
REGIONAL OFFICE
2nd & 3rd Floor, Lot 4
Block B, Damai Plaza
Phase 3, Jalan Damai, Luyang
88000 Kota Kinabalu
Tel. : 088-282 811/812/810
Fax : 088-235 522
DAMAI, LUYANG
Wisma CTF, Lot 4
Block B, Damai Plaza Phase 3
Luyang, 88300 Kota Kinabalu
Tel. : 088-282 802/808
Fax : 088-282 805
ASIA CITY
Block E, Lot 36 & 37
Phase 1B Asia City
88000 Kota Kinabalu
Tel. : 088-268 800/263 036
Fax : 088-261 779
TAWAU
TB330A, Ground Floor, Block 42
Jalan Merdeka 2, Fajar Complex
91000 Tawau
Tel. : 089-769 800/777 800
Fax : 089-771 013
LAHAD DATU
Lot 53, MDLD 3318
Ground Floor, Fajar Centre
91100 Lahat Datu
Tel. : 089-888 802
Fax : 089-887 800
KENINGAU
c/o Kedai Telekom Keningau
P.O. Box 113, 89008 Keningau
Tel. : 087-336 800
Fax : 087-338 179
KUDAT
c/o Kedai Telekom
P.O. Box 340, 89058 Kudat
Tel. : 088-615 800
Fax : 088-612 690
SARAWAK
Tingkat 6, TM 100
Jalan Simpang Tiga, 93672 Kuching
Tel. : 082-200 200
Fax : 082-257 505
258
Sub Lot 14, Section 11 KTLD
Jalan Kulas Utara Satu, 93400 Kuching
Tel. : 082-203 900/901/904
Fax : 082-250 686
Ground Floor, Lot 1076, 1077
Bintang Jaya Commercial Complex
98000 Miri
Tel. : 085-432 223/410 041
Fax : 085-433 301
Kedai Telekom
BATU LINTANG
Jalan Batu Lintang, 93200 Kuching
Tel. : 082-429 191
Fax : 082-243 511
PENDING
Jalan Gedong, 93450 Pending
Tel. : 082-489 191
Fax : 082-337 797
SRI AMAN
Jalan Club, 95000 Sri Aman
Tel. : 083-322 125
Fax : 083-321 490
MIRI
Jalan Post, 98000 Miri
Tel. : 085-429 191
Fax : 085-422 400
LIMBANG
Jalan Kubu, 98700 Limbang
Tel. : 085-211 334
Fax : 085-212 798
LAWAS
Jalan Punang, 98850 Lawas
Tel. : 085-285 667
Fax : 085-285 248
BINTULU
Jalan Law Gek Soon, 97000 Bintulu
Tel. : 086-318 181
Fax : 086-333 222
SIBU
Persiaran Brooke, 96000 Sibu
Tel. : 084-339 191
Fax : 084-314 708
SARIKEI
Jalan Berek, 96100 Sarikei
Tel. : 084-655 550
Fax : 084-653 588
KAPIT
Jalan Kapit By Pass, 96800 Kapit
Tel. : 084-796 991
Fax : 084-796 515
REGIONAL OFFICE
1st Floor, 2nd & 3rd Floor
No. 322, Lot 2734
Central Park Commercial Centre
3rd Mile, Jln Tun Ahmad Zaidi Adruce
93150 Kuching
Tel. : 082-203 888
Fax : 082-203 851
KUCHING (CENTRAL PARK)
Ground Floor, No 322, Lot 2734
Central Park Commercial Centre
3rd Mile, Jln Tun Ahmad Zaidi Adruce
93150 Kuching
Tel. : 082-203 888/865
Fax : 082-419 084
KUCHING (SATOK)
Ground & 1st Floor, Lot 314, Jalan Satok
93400 Kuching
Tel. : 082-239 800
Fax : 082-259 800
BINTULU
Lot 3637, 1st Floor
Block 31 Medan Jaya Commercial Centre
Jalan Tun Hussein Onn, 97000 Bintulu
Tel. : 086-338 423
Fax : 086-314 800
SIBU
Lot 145, Ground & 1st Floor
Jalan Kampung Nyabor
96000 Sibu, Sarawak
Tel. : 084-321 800/324 800
Fax : 084-310 800
MIRI
Lot 935, Ground & 1st Floor
Blok 9, MCLD Jalan Asmara
98000 Miri, Sarawak
Tel. : 085-420 800/429 235
Fax : 085-439 445
WILAYAH PERSEKUTUAN LABUAN
State Relations Officer
Lot E001, 1st Floor Podium Level
Labuan Financial Park
Jalan Merdeka, 87000 WP Labuan
Tel. : 087-408 888
Fax : 087-453 899
Kedai Telekom
LABUAN SERVICE CENTRE
Lot 8, Lazenda Commercial Centre
Jalan Tun Mustapha, Wilayah Persekutuan
87008 Wilayah Persekutuan Labuan
Tel. : 087-425 300/100/400
Fax : 087-415 013/425 900
LABUAN SERVICE CENTRE
Lot 8, Lazenda Commercial Centre
Jalan Tun Mustapha, Wilayah Persekutuan
87008 Wilayah Persekutuan Labuan
Tel. : 087-425 300/100/400
Fax : 087-415 013/425 900
Lot E001 1st Floor Podium Level
Labuan Financial Park
Jalan Merdeka, 87000 WP Labuan
Tel. : 087-408 878
Fax : 087-441 446
259
Group Director y
INTERNATIONAL SUBSIDIARIES/AFFILIATES
CAMBODIA SAMART COMMUNICATIONS
CO. LTD
33rd Floor
No. 3, Samdech Sothearos Blvd.
Khan Doun Penh, Phnom Penh
Kingdom of Cambodia
Tel. : +855-16-810081
Fax : +855-16-810006
MTN NETWORKS (PVT) LTD
No. 475, Union Place
Colombo 2 Sri Lanka
Tel. : +94-1-678688
Fax : +94-1-678703
SAMART CORPORATION PLC
92, Moo Software Park
Chaengwattana Rd.
Klong Gluar, Pak-Kred
Nonthaburi, 11120 Thailand
Tel. : +66-2-5026070
Fax : +66-2-5026072
SOTELGUI s.a.
B P 2066, Conakry
Republic of Guinea
Tel. : +224-450200
Fax : +224-411535
TELKOM SA LIMITED
Private Bag 8780
Pretoria 0001
South Arica
Tel. : +27-12-3113910
Fax : +37-12-3118302
TM INTERNATIONAL BANGLADESH
LIMITED
9th Floor, Brac Centre
75 Mohakhali Commercial Area
Dhaka 1212, Bangladesh
Tel. : +880-2-9887115
Fax : +880-2-9887112
TELEKOM NETWORKS MALAWI LIMITED
Munif House, Livingstone Avenue
Limbe P.O. Box 3039
Blantyre, Malawi
Tel. : +265-1-645915
Fax : +265-1-642805
LOCAL SUBSIDIARIES
FIBERAIL SDN. BHD.
7th Floor, Wisma Telekom
Jalan Desa Utama
Pusat Bandar Taman Desa
58100 Kuala Lumpur
Tel. : 03-7980 9696
Fax : 03-7980 9900
16th Floor, Menara 2
Faber Towers, Jalan Desa Bahagia
Taman Desa, Off Jalan Klang Lama
Kuala Lumpur
Tel. : 03-7984 4989
Fax : 03-7980 1605
GITN SDN. BHD.
31st Floor, Menara Telekom
Jalan Pantai Baharu
50672 Kuala Lumpur
Tel. : 03-2240 0708
Fax : 03-2240 0709
10th Floor, Menara D
Persiaran MPAJ, Jalan Pandan Utama
Pandan Indah
55100 Kuala Lumpur
Tel. : 03-4292 1111
Fax : 03-4291 9191
Level 14, Wisma Pantai
Plaza Pantai, Jalan Pantai Baharu
59200 Kuala Lumpur
Tel. : 03-2284 5515
Fax : 03-2284 3464
Jalan Punchak, Off Jalan P. Ramlee
50250 Kuala Lumpur
Tel. : 03-20205446
Fax : 03-20342609
UNIVERSITY TELEKOM SDN. BHD.
Jalan Multimedia
63100 Cyberjaya
Selangor Darul Ehsan
Tel. : 03-8312 5000/5020
Fax : 03-8312 5022
TELEKOM RESEARCH & DEVELOPMENT
SDN. BHD.
Idea Tower, UPM-MTDC
Technology Incubation Centre 1
Lebuh Silokon
43400 Serdang
Selangor
Tel. : 03-8933 1820
Fax : 03-8945 1591
Menara Mutiara Bangsar
Jalan Liku Off Jalan Riang
59100 Bangsar
Kuala Lumpur
Tel. : 03-2283 3888
Fax : 03-2282 6184
TELEKOM SMART SCHOOL SDN. BHD.
45-8, Level 3, Block C
Plaza Damansara, Jalan Medan Setia 1
Bukit Damansara
50490 Kuala Lumpur
Tel. : 03-2092 5252
Fax : 03-2093 4993
260
Level 3, Wisma Telekom Semarak
No. 82, Jalan Raja Muda Abdul Aziz
50300 Kuala Lumpur
Tel. : 03-2681 2681
Fax : 03-2681 2680
TM CELLULAR SDN. BHD.
10th Floor, Wisma Telekom Semarak
No. 82, Jalan Raja Muda Abdul Aziz
50300 Kuala Lumpur
Tel. : 03-2687 8888
Fax : 03-2681 0998
TM FACILITIES SDN. BHD.
27th Floor, Menara Telekom
Jalan Pantai Baharu
50672 Kuala Lumpur
Tel. : 03-2240 1004
Fax : 03-2284 1233
TM INTERNATIONAL SDN. BHD.
17th Floor, Menara Telekom
Jalan Pantai Baharu
50672 Kuala Lumpur
Tel. : 03-2240 2254
Fax : 03-7956 0266
TM NET SDN. BHD.
3300, Lingkaran Usahawan 1 Timur
63300 Cyberjaya
Selangor Darul Ehsan
Tel. : 03-8318 8027
Fax : 03-8318 8077
VADS BERHAD
8th Floor, Plaza IBM
No. 1, Jalan Tun Mohd Fuad
Taman Tun Dr. Ismail
60000 Kuala Lumpur
Tel. : 03-7712 8888
Fax : 03-7728 2584
proxy form
I/We ______________________________________________________________________________________________________
of ________________________________________________________________________________________________________
being a Member/Members of TELEKOM MALAYSIA BERHAD hereby appoint ___________________________________________
__________________________________________________________________________________________________________
of ________________________________________________________________________________________________________
or failing him ______________________________________________________________________________________________
of ________________________________________________________________________________________________________
or failing him, the Chairman of the Meeting, as my/our proxy to vote for me/us on my/our behalf at the Eighteenth Annual General
Meeting of the Company to be held at the Legend Grand Ballroom, 9th Floor, The Legend Hotel, 100 Jalan Putra, 50350 Kuala
Lumpur on Tuesday, 20 May 2003 at 10:00 a.m. and at any adjournment thereof.
My/Our proxy is to vote as indicated below:
Resolutions
1.
For
Adoption of Audited Accounts and Reports for the
year ended 31 December 2002
– Ordinary Resolution 1
Declaration of final dividend of 10 sen per share
(less 28% Malaysian Income Tax)
Re-election of the following Directors under Article 103:(i) Dato’ Dr. Abdul Rahim bin Haji Daud
(ii) Dato’ Dr. Md Khir bin Abdul Rahman
4.
Approval of Directors’ fees and remuneration
5.
Appointment of Messrs. PricewaterhouseCoopers as
Auditors of the Company
2.
3.
6.
Special Business:
– Section 132D, Companies Act 1965
Issuance of New Shares
Against
(Please indicate with an “X” in the spaces provided how you wish your vote to be cast. If you do not do so, the Proxy will vote
or abstain from voting at his discretion.)
Signed this _________ day of ______________ 2003
No. of Shares
CDS Account No.
✂
__________________________________
Signature/Common Seal of Appointer
Notes:
1. A member entitled to attend and vote at the above Meeting is entitled to appoint a proxy to attend and vote in his stead. A Proxy need not be
a member of the Company and the provisions of Section 149(1)(b) of the Act shall not apply to the Company.
2. A member shall not be entitled to appoint more than two (2) proxies to attend and vote at the same meeting provided that where a member
of the Company is an authorised nominee as defined in accordance with the provisions of the Securities Industry (Central Depositories) Act
1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the
credit of the said securities account.
3. Where a member appoints two (2) proxies, the appointments shall be invalid unless the proportion of the holding to be represented by each
proxy is specified.
4. This instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly appointed under a power of attorney
or if such appointee is a corporation, either under its common seal or under the hand of an officer or attorney duly appointed under a power
of attorney.
5. A corporation which is a member, may by resolution of its Directors or other governing body authorise such person as it thinks fit to act as
its representative at the Meeting, in accordance with Article 92 of the Company’s Articles of Association.
6. This instrument appointing the proxy must be deposited at the office of the Share Registrar, Tenaga Koperat Sdn. Bhd., 20th Floor, Plaza Permata
(formerly known as IGB Plaza), Jalan Kampar, Off Jalan Tun Razak, 50400 Kuala Lumpur not less than 48 hours before the time appointed for
holding the Meeting or any adjournment thereof.
1. Fold here
2. Fold here
The Share Registrar
TENAGA KOPERAT SDN. BHD.
20th Floor, Plaza Permata (formerly known as IGB Plaza)
Jalan Kampar, Off Jalan Tun Razak
50400 Kuala Lumpur
3. Fold here
Annual Report 2002
Laporan Tahunan
To / Kepada : Tenaga Koperat Sdn. Bhd.
Share Registrar / Pendaftar Syarikat
Date :
Tarikh :
Please send me/us a copy of the 2002 Annual Report in Bahasa Malaysia :
Sila hantar kepada saya/kami senaskhah Laporan Tahunan 2002 dalam Bahasa Malaysia :
Name / Nama :
Address / Alamat :
Signature of Shareholder / Tandatangan Pemegang Saham :
1. Fold here/ Lipat di sini
TENAGA KOPERAT SDN. BHD.
20th Floor, Plaza Permata
(formerly known as /Dahulu dikenali sebagai IGB Plaza)
Jalan Kampar, Off Jalan Tun Razak
50400 Kuala Lumpur

ENG - Telekom Malaysia

Transcription

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