R e a c h i n g o u t

Transcription

T e l e k o m
R e a c h i n g
o u t
M a l a y s i a
B e r h a d
Annual
Report
(128740-P)
2001
Annual
Report
Corporate Communications Unit, Corporate Affairs Division, Telekom Malaysia Berhad
Ibu Pejabat Telekom Malaysia, Jalan Pantai Baharu, 50672 Kuala Lumpur. www.telekom.com.my
T E L E K O M M A L AY S I A B E R H A D
(128740-P)
Reaching Out
Yesterday, information took time to get across.
The further the distance, the older the news.
Today, calls can be made across continents in milliseconds.
Multimedia information can be transmitted instantly.
With
Tomorrow, promises to be an exciting frontier.
technology we can only begin to dream about.
We’re reaching out,
to make your lives more meaningful.
to enhance your business opportunities.
because we are here, just for you.
Technology is meaningless
without one essential ingredient...
... our customers.
vision
To be a World Class
Communications Company
providing Total Customer Care
Notice of Annual General Meeting
4
Financial Calendar
5
Statement Accompanying the
Notice of Annual General Meeting
6
Five-Year Group Financial Highlights
8
Group Financial Performance 2001
10
Group Segmental Analysis
11
Business & Other Statistics
12
Group Financial Review
13
Group Segmental Structure
18
Corporate Information
20
Profile of the Board of Directors
22
Senior Management Team
31
Corporate Governance Statement
37
Additional Compliance Information
42
Audit Committee Report
43
Statement on Internal Control
46
Chairman’s Statement
50
Chief Executive’s Statement
54
Our Mission is to provide Total Customer Satisfaction
as we strive to become a World Class Communications Company.
We will achieve this through developing people, products and
services of the highest quality while meeting the needs of our nation,
employees and shareholders.
mission
Operations Review
• Fixed Line Services
Box Article 1 - Emerging Technologies:
Multiservices Network
VADS Berhad
Fiberail Sdn. Bhd.
Meganet Communications Sdn. Bhd.
Telekom Sales & Services Sdn. Bhd.
62
76
80
81
82
83
• Cellular
Box Article 2 - Democratising Technology:
Telekom Malaysia as a Bridge to the
Digital Divide
86
• Multimedia Services
Box Article 3 - Broadband Opportunities
in the Converging Market Place
Telekom Applied Business Sdn. Bhd.
Telekom Publications Sdn. Bhd.
Telekom Technology Sdn. Bhd.
96
102
106
108
109
• International Operations
112
• Facilities Management
Menara Kuala Lumpur Sdn. Bhd.
120
124
90
• Corporate Centre
Universiti Telekom Sdn. Bhd.
Telekom Research &
Development Sdn. Bhd.
Telekom Smart School Sdn. Bhd.
Telekom Training College
128
132
Regional Heads
140
Human Resource Development
142
Customer Relationship Management
146
Research & Development
150
Caring for the Environment
152
Our Contributions to the Nation
158
Highlights of the Year 2001
162
Corporate & Social Responsibilities
172
Financial Statements
182
Shareholding Statistics
232
List of Top 30 Shareholders
233
Shareholders and Investor Information
235
Net Book Value of Land and Buildings
236
Usage of Properties
237
Proxy Form
134
136
138
•
4
notice of annual general meeting
T E L E K O M
M A L A Y S I A
B E R H A D
NOTICE IS HEREBY GIVEN THAT the
Seventeenth Annual General Meeting of
the Company will be held at 10.00 a.m.,
on Tuesday, 21 May 2002 at the Legend
Grand Ballroom, 9th Floor, The Legend
Hotel, 100 Jalan Putra, 50350 Kuala Lumpur,
for the following purposes:1.
2.
To receive, consider and adopt the audited Accounts
for the year ended 31 December 2001 together with
the Reports of the Directors and Auditors thereon.
(Ordinary Resolution 1)
To approve the declaration of a final dividend of 10
sen per share (less 28% Malaysian Income Tax) and
special dividend of 5 sen per share (less 28%
Malaysian Income Tax) in respect of the year ended
31 December 2001.
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.”
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 6 May 2002 (in respect
of shares which are exempted from Mandatory
Deposit);
b.
Shares transferred into the Depositor’s Securities
Account before 12.30 p.m. on 6 May 2002 in respect
of Ordinary Transfer;
c.
Shares bought on the KLSE on cum entitlement
basis according to the Rules of the KLSE.
(i)
Y.B. Tuan Joseph Salang Gandum
(ii)
Dato’ Dr. Mohd Munir bin Abdul Majid
Shareholders are reminded that pursuant to the Securities
Industry (Central Depositories) (Amendment No. 2) Act,
1998 which came into force on 1 November 1998, all
shares not deposited with Malaysian Central Depository
Sdn. Bhd. 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.
(iii)
Y.B. Dato’ Ir. Haji Mohd Zin bin Mohamed
NOTICE OF BOOK CLOSURE FOR PAYMENT OF
DIVIDENDS
4.
To approve the Directors’ fees and remuneration.
5.
To appoint the Auditors and to authorise the Directors
to fix their remuneration.
6.
As SPECIAL BUSINESS
NOTICE IS ALSO HEREBY GIVEN THAT, the Register of
Members will be closed from 29 May 2002 to 31 May
2002 (both dates inclusive) to determine the Shareholders’
entitlement to the dividend payment. The dividend,
if approved by the shareholders at the Company’s
Seventeenth Annual General Meeting, will be paid on
24 June 2002 to shareholders whose names appear in
the Register of Depositors on 28 May 2002.
3.
To re-elect the following Directors retiring pursuant
to Article 103:-
To consider and if thought fit to pass the following
Ordinary Resolution:(Ordinary Resolution 8)
“THAT subject to the Companies Act 1965, 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 Companies Act 1965, to issue
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 24 May 2002 (in respect
of shares which are exempted from Mandatory
Deposit);
b.
Shares transferred into the Depositor’s Securities
Account before 12.30 p.m. on 28 May 2002 in respect
of Ordinary Transfer;
5
c.
Shares bought on the KLSE on a cum entitlement
basis according to the Rules of the KLSE.
Shareholders are reminded that pursuant to the Securities
Industry (Central Depositories) (Amendment) (No. 2) Act,
1998 which came into force on 1 November 1998, all
shares not deposited with Malaysian Central Depository
Sdn. Bhd. 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 dividend
for such undeposited shares will be paid to MOF.
Notes:
(i)
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.
(ii)
The 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 attorney duly appointed under a power of attorney.
(iii)
The 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.
(iv)
Explanatory Note for Ordinary Resolution No. 8
By Order of the Board
Wang Cheng Yong (MAICSA 0777702)
Zaiton Ahmad (MAICSA 7011681)
Secretaries
Kuala Lumpur
Date: 29 April 2002
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
financial calendar
15 May 2001
16th Annual General Meeting.
29 May 2001
Announcement of unaudited
consolidated 1st quarter results
for the three months ended
31 March 2001.
15 June 2001
Date of payment of the first
and final dividend of 10 sen
per share (less 28% Malaysian
Income Tax) for the financial
year ended 31 December 2000.
28 August 2001
consolidated 2nd quarter
results for the six months
ended 30 June 2001.
26 February 2002
Announcement of audited
consolidated results and the
proposed
dividend
for
the financial year ended
31 December 2001.
27 November 2001
consolidated 3rd quarter
results for nine months ended
30 September 2001.
21 May 2002
17th Annual General Meeting.
29-31 May 2002
Book Closure for determining
the entitlement for the dividend.
29 April 2002
Issuance of Notice of the
17th Annual General Meeting,
Notice of Dividend Payment
and Book Closure, and Annual
Report for the financial year
ended 31 December 2001.
24 June 2002
Date of payment of the final
dividend of 10 sen per share
less 28% Malaysian Income
Tax and special dividend of
5 sen per share (less 28%
Malaysian Income Tax) for
the financial year ended
31 December 2001.
6
statement accompanying the notice of annual general meeting
T E L E K O M
M A L A Y S I A
B E R H A D
PARTICULARS OF DIRECTORS SEEKING RE-ELECTION AT THE ANNUAL GENERAL MEETING
1.
Details of Board of Directors Meetings of the Company held during the financial year ended 31 December
2001 and attendance of Directors seeking re-election at the Annual General Meeting
Meeting
No
Date
Time
Venue
*S1/2001
15 January 2001
9.30 a.m.
Boardroom
2nd Floor, Ibupejabat Telekom Malaysia, Jalan Pantai Baharu,
50672 Kuala Lumpur
1/2001
16 January 2001
9.30 a.m.
Boardroom
50672 Kuala Lumpur
2/2001
27 February 2001
9.30 a.m.
Boardroom
50672 Kuala Lumpur
3/2001
16 April 2001
9.30 a.m.
Boardroom
50672 Kuala Lumpur
*S2/2001
14 May 2001
9.30 a.m.
Boardroom
50672 Kuala Lumpur
4/2001
29 May 2001
9.30 a.m.
Boardroom
50672 Kuala Lumpur
*S3/2001
28 June 2001
6.30 p.m.
Room Putra II, Renaissance Palm Garden Hotel, IOI Resort,
52502 Putrajaya
5/2001
17 July 2001
9.30 a.m.
Boardroom
50672 Kuala Lumpur
6/2001
28 August 2001
11.30 a.m.
Boardroom
50672 Kuala Lumpur
7/2001
16 October 2001
9.30 a.m.
Boardroom
50672 Kuala Lumpur
*S4/2001
26 November 2001
9.30 a.m.
Boardroom
50672 Kuala Lumpur
8/2001
27 November 2001
9.30 a.m.
Boardroom
50672 Kuala Lumpur
*Special Board Meetings
The attendance of Directors seeking re-election pursuant to Article 103 of the Company’s Articles of Association at
the above mentioned Board Meetings are as follows:
Y.B. Tuan Joseph Salang Gandum attended all the Board Meetings set out above except for meeting No. 5/2001
held on 17 July 2001.
Dato’ Dr. Mohd Munir bin Abdul Majid attended all the Board Meetings set out above except for meeting No. 4/2001
held on 29 May 2001.
Y.B. Dato’ Ir. Haji Mohd Zin bin Mohamed attended all the Board Meetings set out above.
7
2.
Further details of Directors seeking re-election at the Annual General Meeting
Name
Y.B. Tuan Joseph
Salang Gandum
Dato’ Dr. Mohd Munir
bin Abdul Majid
Y.B. Dato’ Ir. Haji Mohd Zin
bin Mohamed
Age
52
54
48
Nationality
Malaysian
Malaysian
Malaysian
Qualification
• B.A. (Econs) from Western
Maryland College, USA.
• MBA from Iran Center for
Management Studies.
• B.Sc (Econs) from the
London School of
Economics and Political
Science (LSE), UK.
• Ph.D. in International
Relations from LSE, UK.
• Diploma in Civil Engineering,
Universiti Teknologi Mara
(UiTM).
• B.Sc. (Civil Engineering),
Bradley University, Peoria,
USA.
• M.Sc. (Civil Engineering),
Bradley University, Peoria,
USA.
• Member of Malaysian
Institute of Engineers
(MIEM).
• Member of the Board of
Engineers of Malaysia.
Position on the Board
Independent Non-Executive
Director
Senior Independent
Non-Executive Director
Independent Non-Executive
Director
Date first appointed
on the Board
6 January 1987
22 May 2000
22 May 2000
Working Experience
and Occupation
As enumerated in profile
on page 26.
on page 26.
on page 27.
Directorships of other
public companies
Director of Tabak Holdings
Berhad and its subsidiary
Borneo Securities Holdings
Berhad
Saujana Resorts (Malaysia)
Berhad
Brisdale Holdings Berhad
Securities holdings in
the Company and
its subsidiaries
15,000 ordinary shares in
the Company
None
None
Family relationship with
any Director and/or
major shareholder of
the Company
None
None
None
Conflict of interest
with the Company
None
None
None
List of convictions for
offences within the
past 10 years other
than traffic offences
None
None
None
11/12 (92%)
11/12 (92%)
12/12 (100%)
Number of Board
Meetings of the
Company attended in
the financial year
8
five-year group financial highlights
T E L E K O M
M A L A Y S I A
B E R H A D
In millions
1997
1998
1999
2000
2001
7,165.7
7,980.1
7,833.0
8,815.7
9,673.2
1.
Operating income
2.
Profit before taxation#
702.3
2,123.6
1,017.0
1,250.8
2,443.6
3.
Profit after taxation#
172.0
1,472.1
953.0
697.8
1,835.8
4.
Profit after taxation and minority interest#
156.5
1,445.8
951.9
705.2
1,811.9
5.
Total shareholders funds#
11,246.9
11,847.4
12,443.3
13,422.5
14,823.9
6.
Total assets#
24,105.9
25,640.8
25,630.1
27,266.9
27,388.1
7.
Total borrowings
7,821.7
7,899.0
8,059.5
8,436.0
7,074.7
11.7%
11.4%
–1.8%
12.5%
9.7%
–70.8%
202.4%
–52.1%
23.0%
95.4%
Growth Rates Over Previous Years
1.
Operating income
2.
Profit before taxation#
3.
Total shareholders funds#
–6.8%
5.3%
5.0%
7.9%
10.4%
4.
Total assets#
20.6%
6.4%
0.0%
6.4%
0.4%
5.
Total borrowings
115.8%
1.0%
2.0%
4.7%
–16.1%
1997 1998 1999 2000 2001
1,835.8
800
400
1997 1998 1999 2000 2001
0
10,000
7,074.7
8,436.0
8,059.5
27,388.1
30,000
7,899.0
Total Borrowings
27,266.9
20,000
0
Total Assets
25,630.1
14,823.9
13,422.5
12,443.3
11,847.4
11,246.9
Total Shareholders Funds
1997 1998 1999 2000 2001
25,640.8
0
24,105.9
1997 1998 1999 2000 2001
600
1,200
172.0
1,200
2,400
2,000
1,600
953.0
1,800
7,821.7
702.3
4,800
1,017.0
7,200
2,400
1,250.8
9,600
3,000
697.8
12,000
Profit After Taxation
1,472.1
2,443.6
Profit Before Taxation
2,123.6
9,673.2
8,815.7
7,833.0
7,980.1
7,165.7
Operating Income
8,000
16,000
24,000
12,000
18,000
6,000
8,000
12,000
4,000
4,000
6,000
2,000
0
1997 1998 1999 2000 2001
0
1997 1998 1999 2000 2001
0
9
1997
1998
1999
2000
2001
Ratio
1.
Return on shareholders funds#
1.4%
12.2%
7.6%
5.3%
12.2%
2.
Return on total assets#
0.7%
5.7%
3.7%
2.6%
6.7%
3.
Debt equity ratio
0.7
0.7
0.6
0.6
0.5
4.
Dividend rate
12.0%
10.0%
10.0%
10.0%
15.0%
5.
Dividend cover#
0.4
4.8
3.2
2.3
3.9
6.
Earnings per share#
– Basic
5.2 sen
48.2 sen
31.6 sen
22.9 sen
58.6 sen
375.1 sen
395.0 sen
410.9 sen
434.8 sen
477.7 sen
RM15.20
RM6.95
RM13.10
RM4.34
RM14.70
RM7.55
RM17.70
RM9.65
RM12.60
RM7.50
7.
Net tangible assets per share#
8.
Share price information
High*
Low
0.8
3
0
2.6
3.7
4.8
0.7
5.3
1.4
1997 1998 1999 2000 2001
6
0.5
7.6
9
1997 1998 1999 2000 2001
0.6
6.4
1.0
0.6
12
8.0
0.7
15
0.7
12.2
12.2
Debt Equity Ratio
Return On Total Assets
Return On Shareholders
Funds
6.7
*
Comparative figures for 1997 – 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.
The high price for 1997 was recorded in January and was adjusted for bonus issue in 1997.
5.7
#
0.6
3.2
0.4
1.6
0.2
0
1997 1998 1999 2000 2001
Financial highlights
0
10
group financial performance 2001
T E L E K O M
M A L A Y S I A
B E R H A D
O p e r a t i n g
I n c o m e
35.8%
Business Telephone
29.5%
Residential Telephone
17.3%
Mobile Telephone
9.0%
Others
8.4%
Data Services
D i s t r i b u t i o n
51.1%
Operating Cost
22.3%
Depreciation
17.2%
Profit After Taxation
5.7%
Taxation
3.7%
Net Finance Cost
o f
I n c o m e
11
group segmental analysis
T E L E K O M
M A L A Y S I A
B E R H A D
OPERATING INCOME FOR THE YEAR ENDED 31 DECEMBER 2001
By Activities
By Geographical Location
95.7%
Telecommunication
94.9%
Malaysia
4.3%
Non-Telecommunication
5.1%
Overseas
PROFIT BEFORE TAXATION FOR THE YEAR ENDED 31 DECEMBER 2001
By Activities
96.5%
Telecommunication
62.6%
Malaysia
3.5%
37.4%
Overseas
ASSETS EMPLOYED AS AT 31 DECEMBER 2001
By Activities
97.5%
Telecommunication
92.4%
Malaysia
2.5%
7.6%
Overseas
12
business & other statistics
T E L E K O M
M A L A Y S I A
B E R H A D
Year ended 31 December
1997
1998
1999
2000
2001
3,052,203
1,170,839
172,465
46,269
6,910
1,780
4,576
4,223,042
3,226,879
1,157,269
188,839
50,636
7,148
1,102
8,866
4,384,148
3,258,044
1,172,755
162,276
61,280
6,031
1,295
18,089
4,430,799
3,405,744
1,228,601
156,600
63,527
5,592
1,573
34,512
4,634,345
3,406,655
1,252,352
120,528
62,134
5,022
1,658
52,202
4,659,007
20.1
20.4
20.1
20.9
20.0
29,551
91
6,414
22.10
29,878
120
7,190
32.90
30,069
172
7,337
33.00
30,404
245
7,970
34.50
30,724
295
8,528
40.3
27,484
27,089
25,442
24,789
21,237
154
162
174
187
217
0.4
7.1
0.4
13.2
0.5
10.2
0.4
8.3
0.4
5.6
92.4
98.0
97.3
100
85.1
Customer Base
1.
2.
3.
4.
5.
6.
7.
8.
9.
Residential telephone
Business telephone
Public payphone
Leased circuits
Other services
Toll Free (1-300 and 1-800)
ISDN
Total access lines
Total access lines per 100
population
Network Capacity (’000)
1.
2.
3.
4.
Kilometers cable pair
Fibre kilometers
Exchange lines
International gateway exchange
Productivity
1.
2.
Number of employees
Number of access lines
per employee
Quality of Service
1.
2.
3.
Total faults report per line
Total complaints per 1,000 lines
Leased circuits fault restoration
(within 24 hours)
13
group financial review
T E L E K O M
M A L A Y S I A
B E R H A D
Operating Income
| For the financial year ended 31 December 2001, the Group's operating income has
increased commendably by 9.7% (RM857.5 million) to RM9,673.2 million as compared to RM8,815.7
million recorded in 2000. This robust growth was attributed largely to the 10.8% growth in telephony
services from RM7,216.3 million recorded in 2000 to RM7,994.9 million in 2001. Telephony services
comprise business, residential and mobile.
Business and residential telephony, inclusive of fixed line, ISDN, payphone and international in-payment grew by
1.4% (RM85.2 million) to RM6,319.4 million as compared to RM6,234.2 million recorded in 2000.
Mobile, inclusive of interconnection has registered significant growth of 70.6% (RM693.4 million) to RM1,675.5
million as compared to RM982.1 million recorded in 2000. This growth was in line with the growth in the
number of subscribers in TM Cellular Sdn. Bhd.
Income from data services has declined by 1.3% mainly due to 9.0% reduction in income from leased services due
to reduced tariff since 1 May 2001. Other data services such as COINS and Frame relay and packet
services have recorded impressive growth of 53.5% and 52.9% respectively.
Income from internet and multimedia services has grown by 55.2% (RM54.5 million) mainly due to increase in the
number of subscribers in TMnet and growth in other multimedia services.
Other telecommunication related services comprise mainly recoverable works order, maintenance, international
services and broadcasting have also registered encouraging growth of 27.3%.
Non-telecommunication related services comprise mainly services from subsidiary companies with core business in
consultancy, property management, education, printing and publication of telephone directories, trading in
consumers premises equipment and others. Operating income from this segment decreased by 6.4%
(RM28.6 million) mainly due to lower contribution from Telekom Smart School Sdn. Bhd.
There was no major change in the operating income mix for the Group. Telephony services being the core business
of the Group has contributed 82.6% (2000: 81.9%) of the Group operating income with business and
residential telephony services contributed 65.3% (2000: 70.7%) and the remaining 17.3% (2000: 11.2%)
was from mobile division. The contribution from
data services, internet and multimedia service
3,200
and other telecommunication related services
are 8.4% (2000: 9.3%), 1.6% (2000: 1.1%) and
3.1% (2000: 2.6%) respectively. Income from
2,400
non-telecommunication related services has
contributed 4.3% (2000: 5.1%) to the Group
1,600
operating income.
Business
Telephone
Residential
Telephone
Mobile
Telephone
Data
Services
00'
01'
Operating Income (RM Million)
868.7
779.0
809.6
820.4
1,675.5
982.1
2,857.6
2,786.0
3,461.8
3,448.2
800
Other
Services
0
14
T E L E K O M
M A L A Y S I A
B E R H A D
Operating Costs
| The Group's operating costs have increased by 6.1% (RM449.9 million) from RM7,389.4
million recorded in 2000 to RM7,839.3 million in 2001. The main contributors to the increase in operating
costs were bad and doubtful debts and manpower.
Bad and doubtful debts expense grew by 78.8% (RM383.1 million) mainly due to increase in provision at TM Cellular
Sdn. Bhd. which represented 21.4% of its operating income as a result of massive house cleaning
exercise in the third quarter of 2001. Provision at Telekom Malaysia company level, mainly for telephony
and leased services has increased by 43.8% (RM128.9 million) as compared to corresponding year but
remained at a manageable level of 5.4% of total operating income.
Manpower cost (excluding retirement benefits) of RM1,216.9 million grew by 19.2% (RM195.6 million) mainly due to
salary review and adjustment at Telekom Malaysia company level as well as yearly increment for other
companies in the Group. Increase in number of employees of few subsidiary companies due to business
expansion also contributed to the higher manpower cost.
Depreciation charge reduced by 4.2% (RM103.3 million) to RM2,377.6 million mainly due to lower than average
capital expenditure spending in recent years. Despite the reduction, it remained the biggest cost
component of the Group. It constituted 30.3% of group operating costs followed by manpower cost
(15.5%), domestic and international out-payments (13.2%), bad and doubtful debt expense (11.1%),
maintenance (4.2%), supplies and inventories (4.1%) and etc.
2,800
2,100
1,400
Depreciation Manpower
Domestic
Bad and
and
Doubtful
International Debts
Out
-payments
00'
01'
Operating Costs (RM Million)
Maintenance Supplies
and
Inventories
1,691.7
1,953.3
324.7
385.5
326.7
279.8
869.5
486.4
1,032.2
782.2
1,216.9
1,021.3
2,377.6
2,480.9
700
Other
Operating
Costs
0
15
Net Finance Cost
| The current year net finance cost
of RM398.9 million was 7.7% (RM33.2 million) lower
than 2000 mainly due to lower interest expense.
Reduction in interest expense was achieved through
savings arising from prepayment of borrowings
bearing high interest rate by Telekom Malaysia and
few subsidiary companies. This was evident by the
reduction in group borrowings from RM8,436.0 million
as at 31 December 2000 to RM7,074.7 million as at
31 December 2001.
600
500
400
300
200
100
01'
108.4
01'
507.3
00'
103.7
535.8
00'
0
Finance Cost
Interest Income
Net Finance Cost (RM Million)
Profit Before Taxation
| The Group’s profit before taxation increased significantly by 95.4% (RM1,192.8
million) to RM2,443.6 million over RM1,250.8 million recorded in the corresponding year. Exceptional gain
on disposal of an associated company, Digital Phone Company Limited amounting to RM827.8 million was
the main contributor. Lower losses of mobile division and positive contribution from associated companies
also contributed to the increase. TM Cellular Sdn. Bhd. has reduced its losses significantly by 38.6%
(RM93.5 million) attributed to significant increase in subscribers from 0.8 million in 2000 to 1.2 million in 2001.
Telkom SA Limited and Ghana Telecommunications Company Limited have jointly contributed RM80.6 million (2000:
RM174.9 million) to the Group profit before taxation. Lower contribution was due to Telkom SA Limited
2001 results has incorporated bad debts and
97'
98'
99'
00'
01'
assets written-off amounting to RM102.1 million.
2500
Despite lower contribution from Telkom SA
Limited, the Group’s share of profit less losses of
2000
associated companies has improved significantly
mainly due to sharing of lower losses from
1500
Digital Phone Company Limited, which was
disposed off during the year.
1000
Group
Company
Profit Before Taxation (RM Million)
1,395.5
2,443.6
600.1
1,250.8
1,469.2
1,017.0
2,084.7
2,123.6
714.0
702.3
500
0
Consequent from 95.4% increase in profit before
tax, the profit after tax and minority interest has
increased by 156.9% (RM1,106.7 million) from
RM705.2 million to RM1,811.9 million.
16
T E L E K O M
M A L A Y S I A
B E R H A D
Total Assets 2001
69.1%
Property, plant and equipment
13.6%
Trade and Other Receivables
9.2%
Cash and Cash Equivalents
3.9%
Associated Companies
2.4%
Long-term Receivables
1.8%
Other Assets
Assets
| Total assets for the group has increased from RM27,266.9 million in 2000 to RM27,388.1 million in
2001 mainly due to increase in property, plant and equipment, short term investments and cash and cash
equivalent.
Increased capital spending by TM Cellular Sdn. Bhd. to improve its network coverage and quality was the main
contributing factor to the increase in property, plant and equipment of 1.2% (RM220.7 million). Short term
investments increased by 33.9% (RM56.3 million) resulting from purchase of investment portfolio from the
retirement benefit trust fund at market value. Higher cash and cash equivalent of RM2,520.1 million (2000:
RM2,215.7 million) was mainly due to proceeds from disposal of Digital Phone Company Limited and
proceeds from operating activities.
Resulting from higher profit after taxation, the return on total assets has increased significantly from 2.6% in 2000
to 6.7% in 2001.
17
Shareholders Fund
| The Group shareholders fund has increased by 10.4% (RM1,401.4 million) to
RM14,823.9 million. The increase was mainly attributed to higher retained earnings and issuance of new
shares under the Employees Share Options Scheme (ESOS).
Consequent from the significant increase in profit attributable to shareholders, return on shareholders fund has
improved significantly from 5.3% in 2000 to 12.2%. Likewise, earnings per share (EPS) has improved from
22.9 sen in 2000 to 58.6 sen in 2001.
In line with improved performance in 2001, the proposed gross dividend for financial year 2001 was 15.0 sen less
28% taxation (RM343.2 million) compared to 10.0 sen less 28% taxation (RM223.2 million) in 2000. The
current year proposed dividend comprise a final gross dividend of 10.0 sen and a special gross dividend
of 5.0 sen. With a higher earning per share, dividend cover has increased from 2.3 in 2000 to 3.9 in 2001.
97'
98'
99'
00'
01'
60
50
40
30
20
EPS (sen)
ROSHF (%)
Shareholders Funds
12.2
58.6
5.3
22.9
7.6
31.6
12.2
48.2
1.4
5.2
10
0
18
group segmental structure
T E L E K O M
M A L A Y S I A
as at 20 March 2002
Multimedia
B E R H A D
International
Operations
Facilities
Management
Corporate Centre
100%
UNIVERSITI TELEKOM
SDN. BHD.
100%
UNITELE MULTIMEDIA SDN. BHD.
100%
TM NET SDN. BHD.
(Formerly known as
Multimedia Management
Sdn. Bhd.)
100%
TM INTERNATIONAL
SDN. BHD. (Formerly known as
Telekom Malaysia International Sdn. Bhd.)
100%
MTN NETWORKS
100%
(PRIVATE) LIMITED
TM FACILITIES
100%
SDN. BHD.
(Formerly known as TM
TM INTERNATIONAL LANKA
Facilities Management Sdn. Bhd.)
(PRIVATE) LIMITED
100%
TELEKOM RESEARCH & DEVELOPMENT SDN. BHD.
100%
TMI MAURITIUS
LIMITED
100%
MENARA KUALA LUMPUR
SDN. BHD.
85%
G-COM LTD.
100%
TELEKOM ENTERPRISE SDN. BHD.
55%
MOBITEL SDN. BHD.
100%
MEDIATEL (MALAYSIA) SDN. BHD.
100%
PARKSIDE PROPERTIES
SDN. BHD.
100%
TM INTERNATIONAL (L) LIMITED
30%
GHANA
TELECOMMUNICATIONS
COMPANY LIMITED
51%
CAMBODIA SAMART
COMMUNICATION
CO. LTD.
100%
TM INTERNATIONAL (CAYMAN) LTD.
100%
TELESAFE SDN. BHD.
100%
42%
CAMBODIA NATIONAL
COMMUNICATION INC.
TM INTERNATIONAL LEASING INCORPORATED
19.73%
100%
TM GLOBAL INCORPORATED
SAMART CORPORATION
PUBLIC COMPANY
LIMITED
40%
SISTEM IRIDIUM
MALAYSIA SDN. BHD.
30%
TELKOM SA
LIMITED
40%
THINTANA
COMMUNICATIONS LLC
100%
TELEKOM MALAYSIA - AFRICA
SDN. BHD.
19
Cellular
Fixed Line
Services
100%
TM CELLULAR SDN. BHD.
(Formerly known as
Telekom Cellular Sdn. Bhd.)
TELEKOM MALAYSIA BERHAD
Data
100%
MOBIKOM SDN. BHD.
100%
TELEKOM MULTI-MEDIA
SDN. BHD.
100%
TM ORION SDN. BHD.
51%
TELEKOM SMART
SCHOOL SDN. BHD.
49%
MAHIRNET SDN. BHD.
100%
100%
VADS BERHAD
(Formerly known as
VADS Sdn. Bhd.)
TELEKOM PAYPHONE SDN. BHD.
100%
CITIFON SDN. BHD.
100%
TELEKOM PUBLICATIONS
SDN. BHD.
100%
100%
CYBERMALL SDN. BHD.
30%
MUTIARA.COM
SDN. BHD.
Voice
VADS e-SERVICES
SDN. BHD.
(Formerly known as
Electronic Commerce
Services Sdn. Bhd.)
100%
100%
TELEKOM SALES &
SERVICES SDN. BHD.
TELEKOM INFOTECH SDN. BHD.
100%
VADS SOLUTIONS
SDN. BHD.
(Formerly known as
The Network
Connections
Sdn. Bhd.)
70%
TELEKOM APPLIED
BUSINESS SDN. BHD.
70%
TELEKOM TECHNOLOGY
SDN. BHD.
100%
100%
TM (HONG KONG)
LIMITED
100%
TELEKOM MALAYSIA
(UK) LIMITED
INTELSEC SDN. BHD.
100%
TELEKOM MANAGEMENT
SERVICES SDN. BHD.
100%
GITN SDN. BHD.
70%
100%
TM (USA) INC.
TM INTERNATIONAL
(BANGLADESH) LIMITED
60%
SOTELGUI S.A. (Societe
Des Telecommunications
De Guinee)
60%
TELEKOM NETWORKS
MALAWI LIMITED
70%
MEGANET COMMUNICATIONS
SDN. BHD.
60%
FIBERAIL SDN. BHD.
16.51%
5 by 5 NETWORKS INC.
(Formerly known as Itopia Inc.)
15%
MYSPEED.COM SDN. BHD.
51%
TELEKOM CONSULTANCY
SDN. BHD.
20
corporate information
T E L E K O M
M A L A Y S I A
B E R H A D
BOARD OF DIRECTORS
Dato’ Ir. Muhammad Radzi bin Haji Mansor
(Chairman)
(Non-Independent Non-Executive Director)
Dato’ Dr. Md Khir bin Abdul Rahman
(Chief Executive)
(Non-Independent Executive Director)
Dato’ Dr. Abdul Rahim bin Haji Daud
(Deputy Chief Executive/Executive Director)
(Non-Independent Executive Director)
Dato’ Abdul Majid bin Haji Hussein
Dato’ Dr. Halim bin Shafie
(Independent Non-Executive Director)
(Senior Independent Non-Executive Director)
Lim Kheng Guan
Ir. Prabahar N.K. Singam
Rosli bin Man
Tan Poh Keat
Mohammad Zanudin bin Ahmad Rasidi
(Alternate Director to Dato’ Abdul Majid bin Haji Hussein)
Suriah binti Abd Rahman
(Alternate Director to Dato’ Dr. Halim bin Shafie)
SECRETARIES
Wang Cheng Yong
Zaiton Ahmad
REGISTERED OFFICE
2nd Floor
Ibupejabat Telekom Malaysia
Jalan Pantai Baharu
50672 Kuala Lumpur
Tel No. : 03-2020 2664
Fax No. : 03-2283 2415/2284 8039
REGISTRAR
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
AUDITORS
PricewaterhouseCoopers
(Chartered Accountants)
PRINCIPAL BANKERS
Bumiputra-Commerce Bank
Berhad
Malayan Banking Berhad
Affin Bank Berhad
PRINCIPAL SOLICITORS
Zul Rafique & Partners
Zain & Co.
Nik Saghir & Ismail
STOCK EXCHANGE LISTING
Kuala Lumpur Stock Exchange
board of
21
DIRECTORS
From Bottom to Top
• Dato’ Dr. Halim bin Shafie • Dato’ Abdul Majid bin Haji Hussein • Dato’ Dr. Md Khir bin Abdul Rahman
• Dato’ Ir. Muhammad Radzi bin Haji Mansor • Dato’ Dr. Abdul Rahim bin Haji Daud • Y.B. Tuan Joseph Salang Gandum
• Dato’ Dr. Mohd Munir bin Abdul Majid • Y.B. Dato’ Ir. Haji Mohd Zin bin Mohamed • Lim Kheng Guan • Ir. Prabahar N.K. Singam
• Rosli bin Man • Tan Poh Keat • Mohammad Zanudin bin Ahmad Rasidi • Suriah binti Abd Rahman • Wang Cheng Yong • Zaiton Ahmad
22
profile of the board of directors
T E L E K O M
M A L A Y S I A
B E R H A D
(61 years of age – Malaysian)
Chairman
Non-Independent Non-Executive Director
Dato’ Ir. Muhammad Radzi was appointed Chairman and Director of
Telekom Malaysia on 12 July 1999. He holds a Diploma in Electrical
Engineering from Faraday House Engineering College, London (1962)
and a Masters of Science (Technological Economics) from the
University of Stirling, Scotland (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 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.
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, later as Director of
Marketing and Customer Services from 1989 to 1995 and finally as
Director of Regulatory Management and External Affairs, before
retiring in July 1996.
Upon his retirement, he was retained as a Consultant/Advisor on
various flagship application projects of the Multimedia Development
Corporation Sdn. Bhd., an agency established by the Malaysian
Government to oversee the development and implementation of
multimedia projects.
Dato’ Ir. Muhammad Radzi currently serves as Chairman of 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 has attended all the twelve (12) Board of Directors’
Meetings of the Company held during the financial year. He is an
Appointed Director by the Minister of Finance (Inc), the Special
Shareholder of Telekom Malaysia and has never been convicted for
any offence. He has no family relationship with any other Director or
major shareholder of the Company nor any conflict of interest with
the Company.
chairman
23
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 Sdn. Bhd.
(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,
respectively.
Dato’ Dr. Md Khir started his career in Malaysian
Agricultural Research and Development Institute (MARDI)
in 1972, before joining Bank Negara Malaysia in 1993.
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 the Multimedia
Development Corporation Sdn. Bhd. (“MDC”) and the
Malaysian Industry Government Group for High
Technology (“MIGHT”).
Dato’ Dr. Md Khir currently is a Member of the Board
Tender (Telco) Committee, Board Employees’ Share
Option Scheme Committee and also a Board Member
of a number of subsidiaries and associate companies
of Telekom Malaysia. He has attended all the twelve
(12) Board of Directors’ Meetings of the Company held
during the financial year. He is an Appointed Director
by the Minister of Finance (Inc), the Special Shareholder
of Telekom Malaysia and has never been convicted for
any offence. He has no family relationship with any
other Director or major shareholder of the Company
nor any conflict of interest with the Company.
chief
executive
24
T E L E K O M
M A L A Y S I A
B E R H A D
Deputy Chief Executive/Executive Director
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 July 1998. He
obtained a Bachelor of Engineering in Electronics,
Master in Science (Telecommunications Engineering)
and Doctorate in Engineering from the United Kingdom.
He also obtained a Masters in Business Administration
from the United States. He has attended the Harvard
Business School’s Advanced Management Program
(AMP) and the Senior Executive Development Program
at the Wharton School of Business, United States.
He is a Fellow of Institute of Engineers, Malaysia.
He joined Jabatan Telekom Malaysia (JTM) as a
Telecommunications Engineer in 1973. 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.
Dato’ Dr. Abdul Rahim is currently the Chairman of the
Commonwealth Telecommunications Organisation (CTO).
He serves as a Member of Board Tender (Telco)
Committee, Board Employees’ Share Option Scheme
Committee and also a Board Member of a number of
subsidiaries and associate companies of Telekom
Malaysia. He has attended all the twelve (12) Board of
Directors’ Meetings of the Company held during the
financial year. He is an Appointed Director by the
Minister of Finance (Inc), the Special Shareholder of
Telekom Malaysia and has never been convicted for
any offence. He has no conflict of interest with the
Company and has no family relationship with any other
Director or major shareholder of the Company.
deputy
chief
executive
25
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 Harvard Advanced Management Program at the Harvard
Business School 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.
d i r e c t o r s
Dato’ Abdul Majid currently serves as Chairman of the Board Tender (TelCo) Committee
as well as a Member of Board Employees’ Share Option Scheme Committee and
Board Audit Committee. He has attended ten (10) out of twelve (12) Board of Directors’
Meetings of the Company held during the financial year, whilst his Alternate Director
attended the two (2) meetings in his absence. He is also a Director of Perusahaan
Otomobil Nasional Berhad and Keretapi Tanah Melayu Berhad. He is an Appointed
Director nominated by the Minister of Finance (Inc.), the Special Shareholder of Telekom
Malaysia and has never been convicted for any offence. He has no conflict of interest
with the Company and has no family relationship with any other Director or major
shareholder of the Company.
Dato’ Dr. Halim was first appointed to the Board on
24 November 2000. He obtained a Bachelor of Economics
(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, Harvard
Business School, USA (2000).
He has held several positions in the Government sector,
including Assistant Secretary at the Ministry of Education,
Program Co-ordinator for the National Computer Training
Center at INTAN, Director of the Information Technology
Division of the Malaysian Administrative Modernisation
and Management Planning Unit (MAMPU) in the Prime
Minister’s Department and Director of INTAN before
becoming Deputy Secretary-General, Communications and
Multimedia, Ministry of Energy, Communications and
Multimedia. He was appointed as Secretary General of the
Ministry from November 2000.
Dato’ Dr. Halim is currently a member of the Board
Employees’ Share Option Scheme Committee and Board
Member of a number of subsidiaries of Telekom Malaysia.
He has attended ten (10) out of twelve (12) Board of
Directors’ Meetings of the Company held during the
financial year, whilst his Alternate Director attended the
two (2) Meetings in his absence. He is also a director of
Tenaga Nasional Berhad and Pos Malaysia Berhad. He is
an Appointed Director by the Minister of Finance (Inc), the
Special Shareholder of Telekom Malaysia and has never
been convicted for any offence. He has no conflict of
interest with the Company and has no family relationship
with any other Director or major shareholder of the Company.
26
Senior Independent Non-Executive Director
Dato’ Dr. Mohd Munir was appointed to the
Board on 22 May 2000. He graduated with
a B.Sc (Econs) and a Ph.D. in International
Relations from the London School of
Economics and Political Science (LSE), UK.
He was the First Executive Chairman of the
Securities Commission (SC), a position he
held for two terms from March 1993 until
February 1999.
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, the Council of Malaysian Industrial
Development Authority (MIDA) and the
Foreign Investment Committee of the Prime
Minister’s Department. He is also a Director
for Saujana Resorts (Malaysia) Berhad.
Dato’ Dr. Mohd Munir currently serves as
the Independent Non-Executive Chairman
of Board Audit Committee and Member of
Board Nominating and Remuneration
Committee. Pursuant to Best Practices
Provision AA VII, he has been appointed
as the Senior Independent Non-Executive
Director, to whom any concerns pertaining
to the Group may be conveyed. He is also
a Board Member of a number of subsidiaries
of Telekom Malaysia. He has attended
eleven (11) out of twelve (12) Board of
Directors’ Meetings of the Company held
during the financial year and has never
been convicted for any offence. He has no
conflict of interest with the Company and
has no family relationship with any other
Director or major shareholder of the
Company.
d i r e c
Independent Non-Executive Director
Y.B. Tuan 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 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 is also a
Director of Tabak Holdings Berhad and its subsidiary
Borneo Securities Holdings Berhad.
Y.B. Tuan Joseph Salang Gandum is now a businessman
and Member of Parliament for Julau Constituency, Sarawak.
He currently serves as an Independent Non-Executive
Member of the Board Nominating and Remuneration
Committee, Board Audit Committee and Board Tender
(TelCo) Committee. He is also a Board Member of a number
of subsidiaries of Telekom Malaysia. He has attended
eleven (11) out of twelve (12) Board of Directors’ Meetings
of the Company held during the financial year and has
never been convicted for any offence. He has no conflict
of interest with the Company and has no family relationship
with any other Director or major shareholder of the Company.
27
Ir. Prabahar was appointed to the Board
on 23 June 2000. He is an engineer by
profession and has a Bachelor of Science
(Civil Engineering) degree from Portsmouth
Polytechnic, United Kingdom in 1985.
A member of the Board of Engineers
Malaysia, Institute of Engineers Malaysia
and Environment and Research Association,
Malaysia (“ENSEARCH”). He is a professional
engineer who has wide experience in the
civil engineering sector, especially in the
areas of consultancy, contracting, project
management and project financing. He is
also a Director of Modal Ehsan Sdn. Bhd.,
a subsidiary of ACP Industries Berhad.
Ir. Prabahar currently serves as an
Independent Non-Executive Member of the
Board Audit Committee and Board
Nominating and Remuneration Committee.
He is also a Board Member of a number
of subsidiaries of Telekom Malaysia. He
has attended eleven (11) out of twelve (12)
Board of Directors’ Meetings of the
Company held during the financial year
and has never been convicted for any
offence. He has no conflict of interest with
the Company and has no family
relationship with any other Director or
major shareholder of the Company.
t o r s
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, respectively.
He has served various government bodies and is
currently a member on the Board of University
Technology Mara (UiTM). He is also a director of
Brisdale Holdings Berhad. He is a member of the
Malaysian Institute of Engineers (MIEM) and the Board
of Engineers of Malaysia.
He is actively involved in politics. Y.B. Dato’ Ir. Haji
Mohd Zain currently is a Member of Parliament for
Shah Alam Constituency and Deputy Head of the
UMNO Shah Alam Division.
Y.B. Dato’ Ir. Haji Mohd Zin is a member of the Board
Tender (TelCo) Committee as well as Board Member of
a number of subsidiaries of Telekom Malaysia. He has
attended all the twelve (12) Board of Directors'
Meetings of the Company held during the financial
year and has never been convicted for any offence. He
has no conflict of interest with the Company and has
no family relationship with any other Director or major
shareholder of the Company.
28
Rosli bin Man
Non-Independent Non-Executive Directors
Rosli bin Man was appointed to the Board
on 15 July 2000. He has more than 24 years
of experience in the telecommunications
industry. Rosli holds a Bachelor of 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 Television Malaysia
Berhad (“TV3”). From 1988 to 1996, he was
instrumental in setting up the first privately
owned telecommunications company in
Malaysia i.e. Celcom (Malaysia) 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 Operating
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 currently serves as a board member
on one of Telekom Malaysia’s subsidiaries.
He has attended ten (10) out of twelve (12)
Board of Directors’ Meetings of the
Company held during the financial year.
He is a Non-Independent Non-Executive
Director nominated by the Company’s
Substantial Shareholder, Khazanah Nasional
Berhad and has never been convicted for
any offence. No conflict of interest with the
Company and has no family relationship
with any other Director or major shareholder
of the Company.
Lim Kheng Guan
Lim Kheng Guan was appointed to the Board of Telekom
Malaysia on 23 June 2000.
A Chartered Accountant by profession and an Associate
Member of the Malaysian Association of Certified Public
Accountants, Fellow of Australian Society of Certified
Practicing Accountants, Associate of the Australian Institute
of Bankers and a member of the Malaysian Institute of
Management. Attended advanced management programs
at Manchester Business School, INSEAD and London
Business School.
Has more than 30 years of experience in accounting,
management consulting and senior managerial positions in
local and multinational public listed companies. Currently
an Executive Director of Malaysian Management Consultants
Sdn. Bhd. and also an Independent Non-Executive Director
of Pacific & Oriental Berhad.
Currently serves as Independent Non-Executive Member
of the Board Audit Committee and also a Board Member
of a number of subsidiaries of Telekom Malaysia. He has
attended all the twelve (12) Board of Directors’ Meetings
of the Company held during the financial year and has
never been convicted for any offence. No conflict of interest
with the Company and has no family relationship with any
other Director or major shareholder of the Company.
29
Tan Poh Keat
Tan Poh Keat was appointed Director of
Telekom Malaysia on 29 August 2000. He
graduated with a Bachelor of Engineering
(Electrical) degree and Master of Engineering
degree from Auckland University, respectively,
under the Colombo Plan Scholarship.
He joined Jabatan Telekom Malaysia (JTM)
in 1962 as an engineer and has served in
various appointments, the last being Deputy
Director General. Subsequently he joined
Telekom Malaysia as Director, Networks
Service and retired at the end of 1991.
Currently, he is an independent consultant
to a number of local and international
companies.
Tan Poh Keat currently serves as a member
of the Board Tender (TelCo) Committee and
Board Member of a number of subsidiary
companies of Telekom Malaysia. He has
attended all the twelve (12) Board of
Directors’ Meetings of the Company held
during the financial year. He is an
Appointed Director by the Minister of
Finance (Inc), the Special Shareholder of
Telekom Malaysia. He has never been
convicted for any offence. He has no
conflict of interest with the Company and
Director or major shareholder of the
Company.
d i r e c t o r s
Alternate Director to
Mohammad Zanudin was appointed as Alternate
Director to Dato’ Abdul Majid bin Haji Hussein
on 12 December 2000. He has a Bachelor of
Economics from Universiti Kebangsaan Malaysia
and a Master Degree in Public Management
from Carnegie-Mellon University, United States.
He has also completed the Harvard International
Tax Program at the Harvard University in 1992.
He has served the Ministry of Finance for eighteen
years, an opportunity that has given him wide
corporate and government experiences. He began
his career with the Treasury in 1984 as Assistant
Secretary in the Economic and International
Division. After four years, he was assigned to
the Tax Analysis Division where he was directly
involved in formulating policies and strategies
for budget proposals and was then promoted to
be Principal Assistant Secretary in 1998. He
was then transferred to the Public Enterprises,
Privatisation and Minister of Finance (Inc.)
Coordination Division as Principal Assistant
Secretary in November 2000, a position he
holds until today.
Mohammad Zanudin is also the Alternate Member/
Director to Dato’ Abdul Majid on the Board Tender
(TelCo) Committee, Board Employees’ Share
Option Scheme Committee and all the subsidiaries
of TM, where Dato’ Abdul Majid has been
appointed as a Director. He has attended two
(2) out of twelve (12) Board of Directors’ Meetings
of the Company held during the financial year in
the absence of Dato’ Abdul Majid, and has
never been convicted for any offence. He has
no conflict of interest with the Company and
30
T E L E K O M
M A L A Y S I A
B E R H A D
d i r e c t o r s
Alternate Director to Dato’ Dr. Halim bin Shafie
Suriah was appointed to the Board on 24 November 2000 as Alternate
Director to Dato’ Dr. Halim bin Shafie. She holds a Bachelor of Arts (Hon)
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 Dato’ Dr. Halim on the
Board Employees’ Share Option Scheme Committee and all the subsidiaries
of the Company, where Dato’ Dr. Halim has been appointed as a Director.
She has attended two (2) out of twelve (12) Board of Directors’ Meetings
of the Company held during the financial year in the absence of Dato’ Dr.
Halim and has never been convicted for any offence. She has no conflict
of interest with the Company and has no family relationship with any other
31
senior management team
T E L E K O M
M A L A Y S I A
B E R H A D
Chief Executive
Deputy Chief Executive/Executive Director
Dr. Idris bin Ibrahim
Chief Operating Officer, TM TelCo
Dr. Idris bin Ibrahim holds a B.E. (Hons.) degree in Electrical and Electronics
Engineering, an M.E. in Microwave Communication Engineering and a
Doctorate in Microwave Engineering from the University of Sheffield, United
Kingdom. He started his career with Jabatan Telekom Malaysia (JTM) in
1974 and has held various positions in the areas of engineering, marketing
and human resource management. In 1993, he was appointed General
Manager Northern Region and later held the post of General Manager, Major
Business (Sales) in 1995 and as the Vice President, Integrated Network
Planning in 1996 before he was made Vice President, Network Development
in August 1997.
Dr. Idris was appointed as the Chief Operating Officer, TM TelCo effective
1 February 2001.
32
M A L A Y S I A
B E R H A D
Baharum bin Salleh
Chief Operating Officer, TM Multimedia
Baharum bin Salleh holds a degree in Electronics Engineering from the
University of Bath, England and a Masters in Business Administration (MBA)
from the University of Leicester, England.
He has been involved in the telecommunications industry for more than
23 years. He started his career in operations management in Malacca.
In 1987 he was mainly involved in project management and later in marketing
when Telekom Malaysia was corporatised. In 1992 he was Telekom Malaysia’s
Area Manager for Negeri Sembilan. Later, as General Manager of Corporate
Strategy, he was mainly responsible for the corporate business direction and
development of Telekom Malaysia.
Baharum was appointed as the Chief Operating Officer, TM Multimedia,
effective 1 February 2001.
Dato’ Dr. Ir. Haji Mohd Khir bin Harun
Chief Executive Officer, TM Cellular Sdn. Bhd.
(formerly known as Telekom Cellular Sdn. Bhd.)
Dato’ Dr. Ir. Haji Mohd Khir bin Harun holds a B.Sc. (Hons.) degree in Electrical
Engineering and Electronics; M.Sc. in Communications Engineering and a
Doctorate in Electronics Engineering. He started his career with Jabatan
Telekom Malaysia (JTM) in 1973 as a Telecommunications Engineer. He was
seconded to the Ministry of Energy, Telecommunications and Posts in 1983
for a period of two years as the Technical Adviser. In 1989, he was appointed
as the General Manager, Mobile Services Division and in 1993 he took up
the post of Senior General Manager, Mobile Services. He was appointed as
Senior General Manager, TelCo Strategy in 1995 and later, in June 1996, he
was made Senior Vice President, Major Business and Government.
senior
T E L E K O M
Dato’ Dr. Ir. Haji Mohd Khir is currently the Chief Executive Officer of
TM Cellular Sdn. Bhd. effective 1 February 2001.
Nor Hizam bin Hashim
Chief Operating Officer, TM International
An accountant by profession, Nor Hizam bin Hashim holds a Bachelor
degree in Commerce from the University of Western Australia. He joined
Telekom Malaysia in April 1988 as Chief Accountant and was subsequently
promoted to the position of Senior General Manager of Corporate Finance
prior to his appointment as the Chief Operating Officer, ServiceCo.
In 1997, he was assigned to Telkom SA Ltd. in South Africa (TSA) where he
assumed the duties of the Executive Director (Chief Financial Officer). At TSA
he was involved in transforming the Company into a world class international
TelCo. He is also a director of several subsidiary companies of Telekom
Malaysia. Prior to joining Telekom Malaysia, he acquired senior management
experience in finance, marketing and general management in three
multinational companies namely ESSO, Unilever and Raleigh where he was
actively involved in turning around an ailing public listed company.
Nor Hizam is currently the Chief Operating Officer, TM International since
1 February 2001.
33
Datuk Ibrahim bin Md. Nassir
Chief Operating Officer, TM ServiceCo
Datuk Ibrahim bin Md. Nassir joined
Telekom Malaysia in January 1995 as
Senior General Manager, Human
Resource and Administration and was
promoted to Senior Vice President,
Corporate Human Resource in July
1995. He has 20 years experience in
the private sector prior to joining
Telekom Malaysia. While at Guiness (M)
Berhad he served as an Assistant
Manager Manufacturing and various
capacities including General Manager
Training and Personnel Manager. Datuk
Ibrahim used to serve as the Human
Resource Director for Goodyear (M)
Berhad.
management team
Datuk Ibrahim was appointed to his
current position effective 1 February
2001.
Mat Rani bin Mohamad
Senior Vice President,
Group Marketing
Mat Rani bin Mohamad is the Senior
Vice President, Group Marketing. He
joined Telekom Malaysia in February
2001, bringing with him an extensive
marketing and sales experience after
spending over 27 years with 3 top
multinational companies – Beecham
Products (Far East), American Express
and Johnson & Johnson. Prior to
joining Telekom Malaysia he held the
position of Marketing Director for Asean
region with Johnson & Johnson.
Dato’ Syed Mustaffa bin Syed Ali
Senior Vice President,
Group Human Resource Management
Dato’ Syed Mustaffa bin Syed Ali holds a
Bachelor degree in Electronics Engineering
and joined Jabatan Telekom Malaysia (JTM)
in 1969 as an Assistant Controller of
Telecoms. He was appointed as General
Manager, Northern Region in 1988 and held
the post of Senior General Manager, Support
Services in 1993 before assuming the post
of Senior Vice President, Network Services,
TelCo in July 1996.
Dato’ Syed Mustaffa was appointed to his
current position effective 1 February 2001.
34
T E L E K O M
M A L A Y S I A
B E R H A D
Gazali bin Harun
Acting Chief Financial Officer
Gazali bin Harun joined Telekom Malaysia in 1990 as an Assistant Manager
in the Corporate Finance Division. In 1998 he was promoted to be the
General Manager of Corporate Finance. He was previously involved in the
floatation of the Company, project financing, treasury management and
merger and acquisition activities before assuming his current position.
As the Acting Chief Financial Officer, he is responsible for Telekom Malaysia
Group's financial policy, direction and management while carrying out his
other functions which includes viewing the treasury operations of Telekom
Malaysia, fund raising activities for the Group, investor relations, taxation
and monitoring and control of subsidiary operations. He sits on the board
and management committee of various subsidiaries of Telekom Malaysia. He
also represents the Company as a speaker in international investor road
shows for equity and fixed income investors.
Prior to joining Telekom Malaysia, he was attached to a local merchant bank
for five years. His exposure in the bank includes corporate banking and
corporate finance.
Abdul Majid bin Abdullah
Vice President, Corporate Strategy & Planning
Abdul Majid bin Abdullah, holds a B.Sc. degree in Electrical Engineering
from Universiti Teknologi Malaysia and a Masters degree in Electronics from
University of Southampton, United Kingdom.
In his 24 years of service, he has covered most of the key divisions within
the Company, including Regulatory Management, Corporate Planning, TelCo
Strategy, Research and Development and Training Division.
Before he assumed his current position, he was appointed as Acting Chief
Operating Officer (COO), Telekom Multimedia (TMM) since July 1999 to oversee
the overall operation and management of TMM. He was in TMM since 1997.
Prior to that, he was seconded to the Multimedia Development Corporation
Sdn. Bhd. (MDC) MSC Project from November 1996 to October 1997 where
he participated with the MSC Flagship Application development team to
coordinate international Web Shapers to formulate and develop the
Electronic Government Project, one of the MSC Flagship Applications.
Abdul Majid was appointed Vice President, Corporate Strategy and Planning
on 1 February 2001.
senior
management team
He holds a Bachelor of Science (Finance) from Northern Illinois University in
1982 and obtained an MBA from Governors State University. He also holds
a Diploma in Accountancy from MARA Institute of Technology (ITM).
35
Dato’ Abdul Halim bin Hussain
Head, Change Management Office
Dato’ Abdul Halim bin Hussain holds a B.Sc. (Hons.) degree in Electrical
Engineering from Brighton College of Technology, United Kingdom. He joined
the Radio Operations and Local Network Division of JTM in 1969 and in
1972 moved to the Transmission Division at Telecom Training College where
he managed a number of training programmes. In 1976 he took up the post
of Controller of Telecoms Sabah Region and in 1992 he was appointed as
the General Manager Southern Region. He was later appointed as the
General Manager for Marketing in the Consumer and Business Division,
TelCo in 1995 before being promoted to the post of Senior Vice President,
Consumer and Business in October 1996.
Dato’ Abdul Halim was appointed as Head of the Change Management
Office, effective 1 February 2001.
Haji Romli bin Hussin
Vice President, Customer Network Operations
Haji Romli bin Hussin, is a qualified Accountant with 22 years experience as
an Auditor. He holds a Bachelor of Economics (Hons.) Degree and Diploma
in Accountancy from University of Malaya, as well as a Masters Degree in
Science (Accounting) from University of New Hampshire, United States.
He joined Telekom Malaysia in 1987 as the General Manager, Internal Audit
and later held the post of Senior General Manager, Internal Audit/Quality
Management and Control in 1993 before being promoted to Vice President,
Quality Management and Control in 1995.
Haji Romli was appointed as the Vice President, Customer Network Operations
effective May 2001.
Haji Hamis bin Hasan
Chief Financial Officer, TM TelCo
Haji Hamis bin Hasan is the Chief Financial Officer, TM TelCo. He holds a
Bachelor degree in Economics Accounting and a Diploma in Accountancy
from the University of Malaya in 1976. An Accountant by profession, he
joined Jabatan Telekom Malaysia in 1980. Over the years, he has held a
number of positions in the Accounts, Finance, Credit Management and Audit
Divisions. He has also served as the Chief Executive Officer of two Telekom
Malaysia subsidiaries namely Telekom Publications Sdn. Bhd. and Telekom
Sales & Services Sdn. Bhd.
Haji Hamis was appointed as the Chief Financial Officer effective 1 June
2001.
36
T E L E K O M
M A L A Y S I A
B E R H A D
Adnan bin Rofiee
Senior Vice President, Major Business & Government
Adnan bin Rofiee graduated with a Bachelor degree in Electronics Engineering
from Brighton Polytechnic, United Kingdom. His 25-year career in the
telecommunications industry started in Jabatan Telekom Malaysia (JTM) in
1977, as a Planning Engineer, Customer Access Network for Central Region.
After holding several positions in JTM and later Telekom Malaysia, he was
appointed as the General Manager of the Sarawak Operation Area in 1994.
A year later, Adnan was appointed as Head of Major Business Unit, before
being transferred overseas in 1997 as the Managing Director of Ghana
Telecommunication Co., one of Telekom Malaysia’s associate companies.
In April 2000, he was selected to head TM Cellular Sdn. Bhd. (formerly
known as Telekom Cellular Sdn. Bhd.) as its Chief Executive Officer, before
assuming his current position in February 2001.
Tan Chian Khai
Senior Vice President, Consumer and Business, TelCo
Tan Chian Khai is the Senior Vice President for Consumer and Business,
TelCo, effective from 1 February 2001.
He is responsible for the development, marketing and sales of Telekom
Malaysia’s products and services to the residential and small enterprise
customer segments. He is also responsible for the customer assistance
service centre.
An engineer by profession, he graduated with a B.Eng. (Hons.) degree from
the University of Liverpool, United Kingdom in 1973. In his 28 years of
experience in the telecommunications industry, he has held various positions
including telecommunications network planning and development, network
implementation, network management and operations, management of
Telekom Malaysia’s area office as well as marketing and sales.
Haji Mohd Yahaya bin Mohd Shariff
Senior Vice President, Network Services
Haji Mohd Yahaya bin Mohd Shariff holds a B.Sc. (Hons.) in Electrical and
Electronics Engineering from Brighton Polytechnic and a Masters in
Electronics from University of Wales, United Kingdom. He started his career
26 years ago as a Switching Engineer at Jabatan Telekom Malaysia (JTM).
Prior to his current position, he was the Chief of National Network Operations
and was the driving force in TM National Network Service Quality initiatives.
Haji Mohd Yahaya is the Senior Vice President, Network Services, a position
he held since April 2001.
37
corporate governance statement
T E L E K O M
M A L A Y S I A
B E R H A D
corporate GOVERNANCE
The Board of Directors is
committed to high standards of
corporate governance and is
accountable to the shareholders
for the manner in which it has
applied the principles of the
“managing with integrity,
transparency and accountability
– intrinsic components in the
preservation of shareholder value”
Malaysian Code on Corporate
Governance (“the Code”).
Compliance with the Code
The Board of Directors is
pleased to report to the
shareholders on how the Group
has applied the principles of the
Code and the extent of
The Board of Directors has assumed the following six specific responsibilities
in discharging their stewardship responsibilities pursuant to Best Practices
Provision AAI of the Code:
•
Reviewing and adopting a strategic plan for the Company through its
Strategic Management Committee;
•
Overseeing the conduct of the Company’s business to evaluate whether
the business is being properly managed;
•
Identifying principal risks and ensuring the implementation of appropriate
systems to manage these risks;
•
Succession planning, including appointing, training, fixing the compensation
of and where appropriate, replacing senior management;
•
Developing and implementing an investor relations programme or
shareholder communications policy for the Company; and
•
Reviewing the adequacy and the integrity of the Company’s internal
control systems and management information systems, including systems
for compliance with applicable laws, regulations, rules, directives and
guidelines.
compliance with best practices
of good governance pursuant to
recommendations of the Code.
Whilst assuming the above responsibilities, the Board is of the view that a
more structured approach is required to formalise the existing process by
which risks are identified, assessed, controlled and reviewed. An enterprisewide risk management programme is being implemented to strengthen the
current internal control system. The Board and the Board Audit Committee
continue to keep under review the Group’s whole system of internal control
including operational, compliance and risk management as well as financial
controls.
38
T E L E K O M
M A L A Y S I A
B E R H A D
The on-going initiatives will formalise and strengthen the
current internal control system within the Group in
compliance with the best practices in the Code throughout
the year.
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’ profiles, appearing on pages 22 to
30 demonstrate the range of experiences vital to the
management of a telecommunication company.
During the year, twelve Board Meetings were held and
the attendance of the Board of Directors are as recorded
in their respective profiles.
Board Composition and Balance
The Board currently comprises two Executive Directors,
five Non-Independent Non-Executive Directors and five
Independent Non-Executive Directors. Board meetings
are presided by a Non-Executive Chairman whose role
is clearly separated from the role of the Chief Executive
to ensure a balance of power and authority.
management are fully deliberated and examined, taking
into account the long term interest of the shareholders,
employees, customers, and the many communities in
which the Group conducts its business.
Pursuant to Best Practices Provision AA VII, Dato’ Dr.
Mohd Munir bin Abdul Majid has been identified and
appointed as the Senior Independent Non-Executive
Director, to whom any concerns pertaining to the Group
may be conveyed.
Board Committees
The Board delegates certain responsibilities to Board
Committees, namely a Nominating and Remuneration
Committee, Audit Committee, Tender (TelCo) Committee
and Employee Share Option Scheme Committee. Prior
to the establishment of these committees, their functions
were assumed by the Board as a whole. All committees
have written terms of reference and operating procedures
and the Board receives reports of their proceedings and
deliberations. The Chairman of the various committees
will report to the Board the outcome of the committee
meetings and such reports are incorporated in the
minutes of the full Board meeting.
Supply of Information to the Board
The Executive Directors generally are responsible in
making and implementing operational decisions whilst the
Non-Executive Directors support the skills and experience
of the Executive Directors, contributing to the formulation
of policy and decision-making through their knowledge
and experience of other businesses and sectors.
Not less than seventy-two hours before each Board
meeting, Directors are sent an agenda and a full set of
board papers for each agenda item to be discussed.
At the same time, dissemination of board papers is
expedited via an efficient and secure electronic document
management system to facilitate informed decisionmaking process.
The Non-Executive Directors are independent of
management and free from any business relationship
which could materially interfere with the exercise of their
independent judgement. Together they play an important
role in ensuring that the strategies proposed by the
The Board reviews the quarterly performance report
which includes a comprehensive review and analysis of
major business and financial issues, customer satisfaction
indices, market share, key business indicators, product
and service quality. Reports from meetings of Board
39
Committees and major strategic business units and
subsidiaries of the Company are also considered at
each Board meeting.
Procedures are in place for Directors to seek both
independent professional advice at the Company’s
expense and the advice and services of the Company
Secretary in order to fulfil their duties and specific
responsibilities as enumerated in Best Practices Provision
AAI of the Code.
Board Appointments Process
Pursuant to the principles of the Code, the Board has
established a Board Nominating and Remuneration
Committee in November 2000, consisting of four NonExecutive Directors, three of whom are Independent.
The Nominating and Remuneration Committee has
recommended a formal and transparent procedure for
the appointment of new directors to the Board which
has been duly adopted by the Board.
Directors’ Training
An induction programme would be arranged for newly
appointed Directors to facilitate their understanding of
the operations of the Group as well as the products and
services offered by the Group. During the year, all the
Directors have attended and successfully completed the
Mandatory Accreditation Programme conducted by the
Research Institute of Investment Analysts Malaysia, an
affiliate of the Kuala Lumpur Stock Exchange (KLSE).
Nominating and Remuneration Committee
Membership
Chairman
(Senior Independent Non-Executive Director)
*Rosli bin Man
*Ir. Prabahar N.K. Singam
* Rosli bin Man was replaced by Ir. Prabahar N.K. Singam
with effect from 16 October 2001 after relinquishing his
independent status following his nomination as a
representative of a substantial shareholder, Khazanah
Nasional Berhad on the Board of the Company.
The 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; and
•
Re-Election of Directors
In accordance with the Company’s Articles of Association
all Directors who are appointed by the Board are subject
to election by the shareholders at the Annual General
Meeting subsequent to their appointment. The Articles
of Association also provides that one third of the
Directors are subject to re-election by rotation at each
Annual General Meeting. An amendment is being
incorporated to the Articles of Association to provide
that Executive Directors also rank for re-election by
rotation as provided in the KLSE Listing Requirements.
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
selected top 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;
40
T E L E K O M
M A L A Y S I A
B E R H A D
•
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;
•
Advise the Board on the performance of the Executive
Directors and an assessment of their entitlement to
performance related pay; and
•
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 five times during the year.
Details of Directors’ Remuneration
Executive Directors’ remuneration comprised salary,
allowances and bonuses. Other customary benefits are
also made available as appropriate. Salary reviews take
into account market rates and the performance of the
individual and the Group.
Establish and recommend a formal and transparent
procedure for developing policy on remuneration of
Non-Executive Chairman, Non-Executive Directors and
Board Committee members, which recommendation
shall be decided by the Board of Directors as a whole.
Details of the nature and amount of each major element
of the remuneration of each Director of the Company
are as follows:
The Nominating & Remuneration Committee has the
authority to examine a particular issue and report back
Directors
Executive
Non-Executive
Dato’ Ir. Muhammad Radzi bin Hj. Mansor
Lim Kheng Guan
Rosli bin Man
Tan Poh Keat
Alternate
(Alternate to Dato’ Abdul Majid bin
Haji Hussein)
(Alternate to Dato’ Dr. Halim bin Shafie)
Total
Salaries
RM
Fees &
Allowances
RM
Bonuses
RM
Benefitsin-kind
RM
Total
RM
264,000
240,000
42,000
18,885
22,090
30,000
17,200
8,900
345,290
297,785
—
—
—
—
—
—
—
—
—
—
138,375
26,750
26,350
86,789
58,399
28,450
54,585
37,470
26,000
45,600
—
—
—
—
—
—
—
—
—
—
15,000
1,500
1,500
1,500
1,500
1,500
1,500
1,500
1,500
1,500
153,375
28,250
27,850
88,289
59,899
29,950
56,085
38,970
27,500
47,100
—
1,050
—
1,500
2,550
—
4,150
—
1,500
5,650
504,000
594,853
52,090
57,600
1,208,543
41
Shareholders
The Directors have a general responsibility for ensuring
The Investor Relations Unit has an active programme of
that the Company and the Group keep accounting
contact with institutions and brokers which involves not
records and financial statements, which disclose with
only presentations at the time of the announcement of
reasonable accuracy the financial position of the
the Group’s interim results but also a regular dialogue
Company and the Group. Efforts are made to ensure
with major institutional investors. The Group publishes
that such financial statements comply with the Companies
documentation used at the time of these briefings
Act 1965, approved accounting standards in Malaysia
through the Internet. However, any information that may
and other regulatory provisions.
be regarded as undisclosed material information about
the Group will not be given to any single shareholder.
State of Internal Controls
A website (www.telekom.com.my) has been established
The Statement on Internal Control is set out in pages 46
for access by shareholders for information. The Group
and 47 of the annual report which provides an overview
participates actively in investors’ conferences overseas,
of the state of internal controls within the Group.
involving presentation on developments within the
Group.
Relationship with the Auditors
Full use is made of the Annual General Meeting to
An appropriate relationship is maintained with the
inform shareholders of current developments with an
Company’s Auditors through the Audit Committee. The
opportunity for shareholders to raise questions when the
Audit Committee has been explicitly accorded the power
Directors are available to respond to their questions.
to communicate directly with both the External Auditors
A press conference is held immediately after the Annual
and Internal Auditors.
General Meeting where the media is advised on the
status of resolutions that were considered. The Chairman,
A full Audit Committee report enumerating its role in
the Executive Directors and the Chief Financial Officer
relation to the Auditors is set out in pages 43 to 45.
are present at the press conference to clarify and explain
issues raised by the press media.
Financial Reporting
The Board aims to provide and present a balanced and
Accountability and Audit
meaningful assessment of the Group’s Financial
Directors’ Responsibility Statement in respect
of the Preparation of the Audited Financial
Statements
Performance and prospects at the end of the financial
The Directors are required by the Companies Act 1965
to shareholders as well as the Chairman’s Statement
to ensure that financial statements prepared for each
and review of operations in the annual report. The Board
financial year give a true and fair view of the state of
is assisted by the Audit Committee to oversee the
affairs of the Company and the Group as at the end of
Group’s financial reporting processes and the quality of
the financial year and of the results and cash flow of the
its financial reporting.
Group for the financial year. The Directors consider that
in presenting the financial statements, the Group has
used appropriate accounting policies, consistently applied
and supported by reasonable and prudent judgements
and estimates.
year, primarily through the annual financial statements,
quarterly and half yearly announcements of the results
42
additional compliance information
T E L E K O M
M A L A Y S I A
B E R H A D
The following information is provided in compliance
with the Kuala Lumpur Stock Exchange (KLSE) Listing
Requirements:-
c)
1. Non-audit fees
subject to the following:-
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 2001 is as follows:-
PricewaterhouseCoopers
PricewaterhouseCoopers Taxation
Services Sdn. Bhd.
PricewaterhouseCoopers Consulting
Sdn. Bhd.
RM
575,700
consumption of fuel on retail basis.
(collectively referred to as “Excluded Transactions”)
(i)
The provision of the services of such Excluded
Transactions by the related parties are based
on fixed price or graduated scale which is
published or publicly quoted to all customers
or classes of customers.
(ii)
The price of charges applicable to the Company
are:-
640,800
•
In the case of provision of the such Excluded
Transactions by the Company, no lower
than the prevailing market price; and
•
In the case of receipt of such Excluded
Transactions by the Company, no higher
than the prevailing market price.
933,000
2,149,500
2. Material Contracts
There were no material contracts (not being
contracts entered into in the ordinary course of
business) that have been entered by the Company
or its subsidiaries involving directors and
substantial shareholders in the past two (2) years
preceding the date of this annual report.
3. Recurrent Related Party Transactions
of revenue nature (RRPT)
The KLSE has, vide its letter dated 8 November
2001, granted extension of time for the Company
to obtain shareholders’ mandate to enter into
RRPT, from 31 January 2001 until the date of the
Company’s Annual General Meeting in May 2002.
KLSE has also, vide its letter dated 13 December
2001, approved the Company’s application for a
waiver from paragraphs 10.08 and 10.09 of the
KLSE Listing Requirements for:a)
the provision of telecommunication, multimedia
and data services;
b)
the receipt of other utility services i.e. electricity,
water supplies and public transport; and
(iii)
The material terms of such Excluded Transactions
are applied consistently to all customers or
classes of customers in respect of such
Excluded Transactions i.e. there is no preferred
treatment accorded to the related parties.
In addition to the above, the KLSE has granted
exemption to the Company from the requirements
to make announcement and obtain shareholders’
approval pursuant to paragraphs 10.08 and 10.09
of the KLSE Listing Requirements in respect of
RRPTs involving Employees Provident Fund Board,
Bank Negara Malaysia, Permodalan Nasional Berhad
(PNB) and funds managed by PNB provided that
the aforesaid are passive investors.
4. Sanctions/Penalties
There were no sanctions and/or penalties (that were
made public) imposed on the Company and its
subsidiaries, directors or management by the
relevant regulatory bodies during the financial year.
43
audit committee report
T E L E K O M
Dato’ Dr. Mohd Munir bin
Abdul Majid
Chairman
Independent
Dato’ Abdul Majid bin
Haji Hussein
Non-Independent
Y.B. Tuan Joseph
Salang Gandum
Independent
M A L A Y S I A
B E R H A D
Ir. Prabahar N.K.
Singam
Independent
1. Terms of Reference
Lim Kheng Guan
Independent
The Audit Committee was established since September
1988 to act as a committee of the Board of Directors
and its terms of reference are as set out in page 45.
2. Membership and Meetings
The Audit Committee comprises four Independent
Non-Executive Directors and one Non-Independent
Non-Executive Director as follows:Dato’ Dr. Mohd Munir bin Abdul Majid
(Chairman)
Haji Khairuddin bin Jamaluddin
Group Chief Auditor/
Secretary to Audit Committee
Lim Kheng Guan
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.
44
audit committee report
T E L E K O M
M A L A Y S I A
B E R H A D
3. Meetings
The committee had six meetings in the period.
Dato’ Dr. Mohd Munir bin Abdul Majid and Lim
Kheng Guan attended all six meetings, whilst Ir.
Prabahar N.K. Singam attended five meetings and
Dato’ Abdul Majid bin Hj Hussein and Y.B. Tuan
Joseph Salang Gandum attended four out of the
six meetings.
Group Chief Financial Officer, other senior
management members and the Group external
auditors attended these meetings upon invitation by
the Chairman of the Committee.
4. Summary of Activities
Apart from its duties as set out in its terms of
reference, the Audit Committee also carried out the
following activities during the period:
i)
The establishment of:
• The Task Force for Best Practices to assist
the Audit Committee on best practices,
Governance and compliance requirements.
The Task Force consistently submitted their
reports in every Audit Committee Meeting;
and
• The Risk Management Committee to assist
the Audit Committee in establishing an
enterprise-wide risk management programme
to identify principal risks of the Group and
to mitigate those risks.
ii)
Update on statutory and regulatory
requirements including the implementation of
the accounting standards applicable in the
preparation of financial statements.
iii)
Review and update on the Policy Statement on
Internal Control and Internal Audit Charter.
iv)
The Audit Committee reviews the effectiveness
of the Group’s system of internal control,
which is subsequently endorsed by the Board.
5. Internal Audit Function
The Group has a well established Internal Audit
Division which reports to the Audit Committee.
The Audit Committee approves the Internal Audit
Plan that is developed on risk analysis approach at
the beginning of each year. The scope of Internal
Audit covers the audits of all financial and operational
matters including those of subsidiaries. Other 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 on
audit works and activities prior to the Committee
meetings. The Internal Audit reports are submitted
to Audit Committee based on quarterly audit plan
as well as additional reports based on special
requests by the Management.
Additionally, the Internal Audit Division works
closely with the external auditors to resolve the
accounting and control issues of the organisation
as raised by them to ensure that significant issues
are appropriately and effectively addressed by the
management personnel concerned.
45
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 a 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
term of office and performance of an Audit Committee
and each of its members at least once every three years
to determine whether such Audit Committee has carried
out their duties in accordance with their terms of reference.
2.
3.
4.
Meetings
The Committee shall meet not less than four (4) times a
year and report to the Board of Directors. The quorum of
the Committee meetings, shall consists at least two thirds
of the members with Independent Non-Executive Directors
forming the majority.
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.
iii)
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 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)
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;
vii)
Review the follow-up actions by management on the
weaknesses of internal accounting procedures and
controls as highlighted by the external and internal
auditors per management letters;
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 Programme and results of
the internal audit process;
x)
Review and appraise the performance and remuneration
of the Head of Internal Audit (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, other applicable laws, rules,
directives and guidelines;
xiii)
Propose an adequate system of risk management for
Management to safeguard the Group’s assets;
Duties and Responsibilities
The following are the main duties and responsibilities of
the Committee collectively:
i)
ii)
To approve the Internal Audit Charter, which defines
the independent purposes, 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 auditors 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;
xiv) Consider and review any significant transaction which
are not within the normal course of business and
any related party transactions that may arise within
the Company and the Group; and
xv)
Consider other topics as defined by the Board.
46
statement on internal control
T E L E K O M
M A L A Y S I A
B E R H A D
1. Introduction
The Malaysian Code on Corporate Governance
stipulates that the Board of listed companies
should maintain a sound system of internal control
to safeguard shareholders’ investments and Group
assets. The Board is taking appropriate initiatives to
During the year the Audit Committee strengthened
efforts to improve and monitor the effectiveness of
internal control and risk management implementation
with regular updates to the Board through the
following committees:
i)
The Task Force for Best Practices headed by
further strengthen the transparency, accountability
Group Chief Financial Officer whose membership
and efficiency of operations.
include Group Chief Internal Auditor, Telco Chief
Financial Officer and the Company Secretary.
The terms of reference of the Task Force are
2. Responsibility for Risk and Internal
Control
as follows:
•
The Board recognises the importance of ensuring
To ensure the Group’s compliance with
relevant statutory and regulatory provisions;
that a sound system of internal control and effective
•
risk management practices are in place in the
To recommend best practices for the
Group in terms of disclosures, in respect of
organisation. The Board is therefore committed to
the
give due attention to improving the effectiveness of
Malaysian
Code
on
Corporate
Governance, in quarterly financial results
internal control, risk management and governance
and annual reports;
processes of the organisation. However, it should be
•
noted that any system can only provide reasonable
To update the Audit Committee on regulatory
and statutory changes; and
and not absolute assurance against material
•
misstatement of loss.
To discuss and review any other matters as
directed by the Audit Committee from time
to time.
3. Risk Management Framework
Since its formation in October 2000, the Task
In ensuring its ongoing review of significant risks
Force had, inter alia, considered the Guidance
affecting the organisation, the internal control
for statement on Internal Control and initiated
procedures with clear lines of accountability and
the establishment of a Risk Management
delegated authority were established through a
Committee.
series of standard operating practice manuals.
ii)
The Risk Management Committee (RMC) was
established in August 2001 to coordinate
implementation of an enterprise-wide risk
management programme for the Group. RMC’s
terms of reference are as follows:
•
Coordinate with relevant business units to
identify key risk exposures of the Group;
47
•
•
Compile key risk profile and ensure the risk
ii)
Internal control procedures are set out in a
control systems are in place to manage
series of standard operating practice manuals
such risks; and
and business process manuals with clearly
Prepare Group risk management reports
established procedures for planning, capital
with recommendations to improve the
expenditure, safeguarding of assets against
current risk control system to further
unauthorised use or disposition, financial and
strengthen the integrity of the internal
accounting records, reporting system and
control mechanism.
monitoring of the Group’s businesses and
performances;
The implementation of the enterprise-wide risk
management program will ensure a more
iii)
The Corporate Centre coordinates the process
coordinated and consistent approach in
for the Group for the coming year wherein the
managing the Group’s significant risk exposures.
budgets are approved at operating unit level
and ultimately by the Board;
iv)
Monthly
performance
reports
provide
4. Other key elements of Internal Control
Management and the Board with comprehensive
The following are other key elements of the Group’s
information on financial performance, key
internal control systems:-
business indicators including level of service
i)
quality; and
The Board has put in place an organisation
structure, which formally define lines of
v)
The Management Committee monitors the
responsibilities and delegation of authority.
monthly results of the Group against budget
These include:-
and in the event of major variances,
•
The establishment of five independent and
focused operating units headed by Chief
Operating Officers/Chief Executive Officer(s)
with calibre to fulfill their respective
responsibilities;
•
A Corporate Centre which is focused on key
areas of strategy and corporate development,
marketing and human resource development
and corporate finance to guide the five
operating units;
•
The establishment of a Change Management
Office to manage the organisation’s
restructuring process.
Management will take appropriate action.
Reaching Out, With A Plan
You want to keep in touch.
Locally and globally.
You want the best value.
You want real
benefits.
Which is why we’re always one step ahead.
Anticipating your needs, wherever you may be.
communications.
With call plans to save you time and money.
With rewards programmes to enhance your life.
With services to enhance your
All you have to do is to reach out
We never forget that
each and every customer is
a special individual.
With individual needs.
50
chairman’s statement
T E L E K O M
M A L A Y S I A
B E R H A D
chairman’s
Chairman
51
We have come through an extraordinary twelve months of 2001 on which it now behoves me
to comment. In my previous year’s message, the theme was ‘Change’, alerting us to
the prospect of change being more rapid and profound than ever before, to a degree
of uncertainty, and to a future it had become hard to predict. Nothing, however, could
have prepared us for the devastating effects of September 11. There was simply no
precedent we could follow as a whole new dimension of political and economic
risks confronted us. It was a test of our stamina and our resilience in difficult and
challenging times.
I am happy to report that your Company had not only emerged relatively unscathed but
remained steadfast in its resolve to continue to create shareholder value at every
opportunity. At the same time, we maintained a healthy scepticism of the status quo,
undeterred in the quest for constant improvement, new initiatives and new directions
to enhance your Company. The process of regeneration is going forward as, over the
years, the Company entered a period of transformation designed to reinvent itself and
better position itself for the challenges which lie ahead. By a perverse irony, the
shock of Ground Zero facilitated the process of change. Crisis often has the effect
of galvanizing truly strategic change. We were forced to redefine our focus, review
our positioning and rethink our strategy.
Above all, 2001 was for us a good, if somewhat inconsistent year, in terms of profitability. We
are comfortably geared, with a strong balance sheet, thanks to our good anticipation
and timing on the sale of our venture in Thailand. Apart from this, the picture was
mixed. The fixed line business remained the mainstay of revenues and profitability.
Cellular, on the other hand continues to show progress. The contribution from our
overseas investments continues to improve, but we need to be reminded of our
exposure to externalities with changes in government and regulatory regimes.
STATEMENT
52
chairman’s statement
T E L E K O M
M A L A Y S I A
B E R H A D
The extraordinary item in this year’s Account was the sale of our 49.99% stake in Digital Phone
Company Ltd. – DPC, our joint venture in Thailand. Your Company is to be congratulated
both on the deal and the timeliness of execution, being completed just a week ahead of
the infamous September 11, and helped crucially to cushion the adverse economic fall
out. We need, however, to see this in perspective as a one off boon that cannot expect
to be repeated. A realistic appraisal reveals, as a top priority, the need to grow our
cellular revenue stream. The fixed line sector, long regarded as the core business,
continues to ensure a stable income stream but cannot be depended upon as an engine
of growth. The rapid consumer migration from fixed to mobile necessitates the need to
refocus on this other side of our business. Cellular revenue at present is only 17% of
the Company’s total income. One hopeful sign came at year-end when after declining
from June to September, cellular income began to show surprising strength. This does
not obviate the need for an overall growth strategy.
The year also saw our major restructuring exercise advancing whereby we have disaggregated the
old structure to allow the Divisions to function freely and flexibly. The five independent
and separately focused business operating units are now firmly in place. However, they
are not functioning fast enough. More momentum is needed. But soon there may be a
new impetus that will serve to energize our whole existence. The Government has
signaled its desire for further consolidation of the industry. This is nothing new, as we
began with eight licensed operators, reduced to the present five, and now contemplate
a further pruning to three. It is therefore part of a progressive ongoing process of
rationalization. Telekom Malaysia believes that three players in the market is more
realistic and more manageable. Too many contenders lead to a wasteful duplication of
networks. Downsizing will involve cost savings that can be passed on to the consumer.
The present still overcrowded market, moreover and most pertinently, encourages a
tendency to compete on promotions rather than network quality and innovative services.
Telekom Malaysia, as the country’s first and pre-eminent telecommunications provider,
would like to play a leadership role in the new industry landscape.
Our leadership role is one we value and further efforts were made last year to sustain and enhance
it, in more than just a business sense. What distinguishes Telekom Malaysia – what
makes us different, is a culture of innovation and our unremitting dedication to our
corporate citizenship obligations. Innovations that stood out last year included our
contribution to the nation’s Wild Life project as part of our commitment to environmental
conservation. In human resource development there was a new proactive emphasis on
leadership specifically to empower our top management for the more strategic challenges
ahead. So often company training focuses exclusively on technical skills and re-skilling
programs to meet the relentless demands of technology – but leadership skills are taken
for granted. We continued our commitment to education and playing our part in the
knowledge economy. Our wholly-owned subsidiary Universiti Telekom Sdn. Bhd.
53
manages the Multimedia University which is the first private university to be licensed and remains the
biggest in the field with 12,000 students currently. As an industry related institution, it offers hi-tech
education duly accredited to keep pace with advancing technologies.
It follows that your Company is forward looking as we enter another year of uncertainty. There will be unforeseen
challenges and new issues. One that we may anticipate are concerns about the long overdue tariff rebalancing exercise. While some tariff changes were made in 1996 the current structure of charges has
been in place since 1982 when they were formulated to meet the circumstances then prevailing in
Malaysia. Technology innovation which has fundamentally rewritten the economics of our business justifies
a revamp of our tariffs to reflect the underlying costs of service provisioning. Unfortunately, there will be
winners and losers but let me emphasise that for the majority of our local consumers the new charges
will not be punitive.
Meanwhile Telekom Malaysia’s aspirations are high. We mean to build greater subscriber loyalty. We seek rebranding in the wake of our new identity. We recognize the need to appeal to the younger population
especially in the prepaid sector. We continue to expand our horizons and are looking to achieve a stronger
regional footprint, to which end we will be considering new strategic partnerships.
The final message is one of confidence. The Year of the Horse encourages us to build pace and gallop forward with
a new momentum. We have at last opened the doors to our staff to start occupying our new
Headquarters, Menara Telekom. The new office is a tangible expression of our faith in the future. But most
of all our next home is a new landmark in this fair city. When the sceptics and reluctant foreign investors
express their doubts about Malaysia there is one recipe that never fails to convince. They should look at
the landscape. Telekom Malaysia has taken its place with pride in the country’s showcase.
Finally it is all down to people. We are building our human asset base and applaud our loyal staff. May I thank my
fellow Board of Directors, the Chief Executive and his Deputy, the Chief Executives of subsidiaries and
associate companies, the management and staff who are the mainstay of us all, for their resilience, their
dedication and their hard work even through the difficult times. We are truly indebted. Our appreciation
also goes to the relevant authorities, business partners and most valued customers.
To our Shareholders I pledge our undiminished, indeed our renewed commitment to make Telekom Malaysia a world
class company by the target year 2005.
Chairman
54
chief executive’s statement
T E L E K O M
M A L A Y S I A
B E R H A D
Chief Executive
chief executive’s
“Our corporate vision to be a customer
centric world class communications
company dictates that customers’ needs
will drive the technology and services we
deploy and not the other way around.”
55
The year 2001 has been both challenging and eventful
for most industries. Even before September
11, the global economy was tottering in
uncertainty between economic slowdown and
recession, and the extent the fateful event did
was merely to hasten the process. Arguably,
the ICT industry contributed largely to the
upheavals in the global economy with notable
casualties among the over-valued dot-coms,
mostly with flaky business models.
The impact spared few. The financial prospects of the
telecommunications industry, buoyant and
exuberant for so long, have also received as
much knocks than anybody can remember.
The shockwaves hit many established
incumbents in Europe as it similarly did to
several new entrants in the industry. The
mobile industry endured most of the misery.
For many incumbent European operators, the 3G licensing
process took a very high toll on their balance
sheets with successful bidders now nursing
painful debts. The 3G business case is still
uncertain and what has become clear is that in
practice, 3G would deliver less to the customers
than the early promises had suggested.
All this happened in the wake of the industry undergoing
deregulation and liberalisation. For incumbents,
competitive pressures will definitely build up
especially in the core fixed line business as
well as in the data business. Near-monopoly
will soon dissipate.
Still there are hopes and encouraging signs in the form
of new businesses. While telecommunication
companies have yet to become proficient in
STATEMENT
generating revenues especially out of content
and advertising, customers have shown some
willingness to pay for efficient fast access and
innovative value-added services. These are
the challenges over the next few years.
Despite the global turbulence, the impact of which was
felt equally in the domestic market, Telekom
Malaysia still managed to ride the waves and
excel, striking a graceful and successful balance
between carrying out a national responsibility,
and slowly emerging as a progressive and
innovative next generation communications
provider.
We have continued to maintain our leadership in traditional
services. Our market share of the fixed line
and Internet services stand at 95% and 70%
respectively. At the same time, we are
aggressively growing the subscriber base to
contribute to levels of national penetration
equivalent to other developing countries around
the world. I am particularly proud of the major
strides that we made in the mobile market
space. Given where we started off, we have
managed to grow by leaps and bounds to
secure the third largest market share in the
local mobile market. Our TMTOUCH subscriber
numbers grew by 67.1% to 1.21 million and
today our total presence stands at 1.36 million
subscribers including those from our Mobikom
and ATUR 450 services.
Our group revenue rose 9.7% to RM9.67 billion from
RM8.81 billion last year. Our commendable
performance in 2001 also significantly
boosted our group pretax profit to RM2.44
billion, with our net profit increasing by more
56
T E L E K O M
M A L A Y S I A
B E R H A D
than one and a half times from the previous year to RM1.81 billion. Group EBITDA for 2001 is RM4,272.3
million while our earnings per share rose 156% to 58.6 sen from 22.9 sen last year.
We, however, cannot afford to feel contented with current achievements. We have to strive and reach out to attain
higher goals, as much work needs to be done to ensure that we stay ahead of the competition. The
coming year will bring new challenges and the organisational restructuring that we have undertaken will
be put to the test. Our robustness and commercial viability will be tested as the industry introduces new
changes. Changes such as the liberalisation of the last mile and the demand for next generation of mobile
services will only encourage us to be more resolved in our commitment to succeed in the long term. We
will be required to take tough decisions. The decisions we take today on how we position ourselves in
this environment will determine our success and how well placed we are to face the times ahead.
The achievements of Telekom Malaysia were made possible through the unfailing support and tireless efforts of
the Board of Directors, management team and all the staff. It is due to their unified resolve in achieving
the goals of our corporate vision that I am able to present to you, the highlights and results of our
performance for 2001.
2001 Group Performance
| A new chapter unfolds in the development of Malaysia’s telecommunications
industry. The evolutionary trend of communications markets around the world is one where customer
centricity is quickly becoming a key influence in all things regulatory and services related.
Telecommunications is an industry that has its own unique challenges. Technology has become increasingly
sophisticated and expensive, but users on the other hand expect to pay less for these technology-enabled
high-speed and high value-add services. To be a next generation operator, we will therefore need to focus
on total customer satisfaction, deriving our revenues from market share captured and compelling services
offered. Operators can no longer run a business on the assumption that customers will readily pay more
for more advanced technology. Our Total Customer Care initiative is one of the key components in our
corporate vision, and testament of our commitment to reaching out to our customers and providing quality
service to all Malaysians.
Already we are reaping the results. Much of the substantial growth in Telekom Malaysia’s TMTOUCH service can be
attributed to service initiatives designed to enhance customer experience and provide substantial savings
57
in the process. We have also managed to
offer various new product offerings resulting in
our ability to cap losses in our mobile
businesses from the previous year of RM586
million to RM400 million. Judging by the
strong growth we have experienced in our
mobile subscriber base over the year, we are
confident that the downtrend is over and look
set to post a profit in 2002.
2001 has also seen strong growth in our mobile data
services particularly through the deployment
of SMS. With the promise of WAP failing to
jump-start the mobile data services market,
other operators too have looked to the everrobust and familiar SMS platform as the vehicle
for the delivery of such services.
The spirit of innovation and our focus on customer
needs and satisfaction have always been the
driving force behind the way we create services
and select and improve our technologies. By
delivering value-added and compelling data
services over our GSM 1800 network, we
have created a new and growing source of
revenue for our mobile business. At the same
time we have been able to differentiate
ourselves from the competition whilst delivering
value to our customers. These have created
an appetite for data services among our users
today, which is a sign of acceptance towards
the migration into future GPRS (2.5G) and 3G
services.
Similarly, the enhancement of customer services through
eCRM (Customer Relationship Management)
by our TMnet service has seen our Internet
subscriber base double over the past year,
giving us the majority share of the market with
1.27 million subscribers. e-CRM also contributed
to the improvement of sales, the enhancement
of integration between sales and marketing,
the overall efficiency of back-end services and
the customer call center. These customer centric
initiatives have enabled the TMnet service to
emerge as the nation’s preferred ISP.
Whilst we remain proud and optimistic of our achievements,
we must also look back at some of the
challenges we faced in order to seek
opportunities for improvements. The fixed line
business has gone through some upheavals
with the introduction of tariff rebalancing
measures which increase the price of local
calls and reduce the price of outstation and
IDD calls. Our dominance in the Malaysian
fixed line market has inevitably put us in the
spotlight in respect of the cost impact of this
to users. As with all pricing adjustments, a
reaction from the user market can be
expected. However we anticipate that this will
not have a significant impact on revenues of
our fixed line business or any major change in
fixed line user habits in the longer term. Even
as the impending liberalisation of the last mile
for fixed lines places us on a new competitive
plane, we remain confident that with our clear,
customer centric vision and approach to
business, we will continue to deliver and
remain as the preferred service provider.
The year also saw Telekom Malaysia taking a bold step
in broadening telecommunication coverage
across the nation whilst at the same time
fulfilling our responsibility as an incumbent
under the guidelines of the Universal Service
Obligation (USO). By employing the Code
Division Multiple Access (CDMA), Telekom
Malaysia delivered the long-awaited telephony
services to rural Malaysia, reaching out to our
customers through technology where it
previously proved to be almost impossible
due to high cost and technical difficulties.
CDMA is an effective wireless connectivity
solution that offers both enhanced voice and
data services. The gradual increase in rural
footprint using CDMA is another step in
Telekom Malaysia’s efforts towards realising
the government’s aspiration of narrowing the
digital divide.
In line with the increasing bandwidth demand from both
corporate and private users, Telekom Malaysia
has prioritised the rollout of our high speed
broadband services to reach the most
valuable customers and the high density areas
all over the country. It is clear to us that with
the increasing emphasis for high speed
Internet, interactive multimedia and on-line
services, the demand for broadband local
access is set for exponential growth in the
next few years. I am confident that we are
well positioned to be an active player in
meeting Malaysia’s growing thirst for higher
bandwidth. As owner of the largest
telecommunications network, we will continue
to deploy the right mix of best-of-breed
technologies to fulfill the needs of our
customers in this area.
58
T E L E K O M
M A L A Y S I A
B E R H A D
We have also taken steps over the last years to strengthen and enhance our positioning in the global industry space
by carrying out necessary network infrastructure expansion and enhancements in tandem with global
market demands. December 2001 marked a milestone in Telekom Malaysia history with the introduction
of the new state-of-the-art fiber-optic Asia Pacific Cable Network 2 (APCN2). The 19,000 km long APCN2
cable system will connect Malaysia to seven territories namely Japan, Korea, China, Taiwan, Hong Kong,
Philippines, and Singapore as well as provide seamless interconnection with other parts of the world. The
APCN2, along with other existing global connections that we have implemented, is directly fulfilling our
government’s vision to establish Malaysia as a ‘Telecommunications Hub’ in the region.
It is our intention to continue rolling out more sophisticated value added services to our customers and also optimise
our network efficiency and capabilities. High on our priority is the need to integrate all the various systems
that have been developed to support our operations and services to the customers. Early last year, we
have embarked on a comprehensive effort to implement an integrated Network Management System
which eventually will allow us to effectively manage and monitor the various networks to improve our
services. This major initiative will bring us closer to accomplishing our vision of becoming a cost effective,
efficient and seamless total communications service provider to our valued customers.
Contribution from Overseas Operations and Local Subsidiaries
| Internationally, the year
under review constitutes a year of strategic consolidation of the company’s international or offshore
investments which resulted in strengthening the core businesses. The strategic consolidation allowed for
economic expansion of network and focused on key drivers of economic return from each investment. As
at the end of 2001, the net earnings from the international investments contributed approximately 8% of
the group’s net profit after tax. In this regard, while we have, during the year, profitably divested our
interest in DPC, a cellular company in Thailand, we are still on track in our objective of extending our
international footprint by shifting our focus on the regional markets and at the same time not precluding
opportunities in other viable and profitable markets. Our thrust is to create operational values for Telekom
Malaysia and the host country while at the same time looking at the right strategy to maximize capital
value for our investments. It is anticipated that net earnings from offshore investments will provide a
significant contribution to the group’s earnings in the near future.
On the local front, I am glad to note that the local subsidiaries and associate companies have begun to contribute
positively towards the earnings of the group. The subsidiaries in total and inclusive of cellular operation,
have managed to cap their losses from RM840 million in the year 2000 to RM251 million last year. Though
some of the subsidiaries still have yet to register good profit figures, their operations are important to the
group as a whole to the extent that they provide synergistic value to the company through cross-bundling
of products and services. Notably the group has entered into the potentially lucrative e-payment
business through our subsidiary, Telekom Technology Sdn. Bhd. This is an area of service that
will enable Telekom Malaysia to leverage on its efficient and comprehensive network infrastructure
to provide electronic and mobile payment services and to generate new revenue streams for the
company. Among the early services introduced are the bill presentment and payment services,
mobile prepaid card uploading and on-line ticket purchasing.
Managing Change
| The ambitions we have set ourselves for the next fiscal year and
the years ahead, are indeed very challenging ones. Telekom Malaysia has undergone a corporate
restructuring exercise that splits Telekom Malaysia into five new independent and focused
operating units concentrating on fixed line, cellular, multimedia, international ventures and facility
management and support services. Each strategic business unit functions independently, each
with their own financials and strategy, and aligned to the vision of Telekom Malaysia. Efforts are
being made to streamline the processes, right-size resources and putting in the necessary
governance to achieve operational excellence.
59
On our people change strategy, we have in 2001
implemented various initiatives with the objective
of focussing our human resource within a
highly competitive environment in support of
business goals. Ranked highly in our list of
priorities were the adoption of a new
compensation structure to put the executive
salary level comparatively closer to the
industry, the reformulation of our executive
development program which put emphasis on
knowledge management and increasing
intellectual capital and an intensive program
to manage our top talents in the company to
prepare them as future leaders. We have also
during the year entered into a new 3-year
collective agreement, with our three in-house
unions in recognition of the vast contribution
made by the non-executives. With these and
other human resource initiatives already in
place, we believe we have begun to put the
right foundation for the company to adopt a
performance based culture in driving its
business.
Positioning for the Future
| The fast paced
evolution and sophistication of communications
have broken down barriers between continents
and countries, creating seamless paths to
transact, share information and quite simply –
communicate. The liberalisation of Malaysia’s
telecommunications industry is a result of this
global trend and it has necessitated that
everything Telekom Malaysia does from now
on, evolves along with it.
The upcoming third generation (3G) licensing awards
process will see further consolidation in the
industry with only three licensed 3G operators
in the future. Telekom Malaysia is actively and
prudently participating in this licensing process
to fulfill our mission in acquiring one of three
licensed spectrum bands to offer value-added
3G services to our subscriber base. The
immediate challenge however, would be for
Telekom Malaysia to manage the mindset
evolution of our subscribers and the market,
in preparation for 3G.
Scepticism and limited success in commercial 3G rollouts
elsewhere in the world have cautioned us to
exercise prudence and practicality when rolling
out our 3G services. The real challenge will
come in the form of effective planning and
rollout of this technology for optimum impact.
In two years, 3G will be commercially available
in Malaysia and Telekom Malaysia intends to
take the lead by embarking on an initiative to
educate the majority of voice centric users on
the possibilities of 3G. We hope to give our
subscribers a first taste of the mobile Internet
and facilitate their migration onto 3G services.
Our corporate vision to be a customer centric
world-class communications company dictates
that customers’ needs will drive the technology
and services we deploy and not the other way
around.
Our pioneering involvement in high-technology digital
communications doesn’t just end with 3G, we
are also creating new values from the fixed
line business by creating new value added
services and position Telekom Malaysia to be
the main provider of broadband and Internet
services. These services will serve as the
platform for the development of new
multimedia applications and content for our
customers. The future of Telekom Malaysia’s
business will be a tightly integrated fixed line,
multimedia and mobile service provider.
The new millennium has seen the introduction of many
new technologies in the telecommunications
market. Users have been quick to embrace
them because they deliver value, convenience,
savings and provide an overall richer experience
to their everyday lives. As the nation’s premier
communications provider, Telekom Malaysia
will continue to drive towards being the catalyst
and medium that binds all these technologies
together for Malaysians into one seamless
and acceptable solution. A convergence of
these technologies is inevitable.
Our challenge is in meeting these changes head on by
positioning ourselves to be faster, more creative
and innovative than the competition. Only then
can we hope to not only maintain our foothold
in the present telecommunications industry
landscape but also to reach out and offer new
services for the future digital economy.
Chief Executive
No matter where you are,
we'll make sure the world...
... is never far.
Reaching Out, Everywhere
No one else has our infrastructure nationwide.
Indeed, no one has even come close
digital networks that criss-cross the nation
to the broadband infrastructure that links the continents.
From the
fibre optic network
to the latest wireless solutions.
From the country’s most extensive
We’re reaching out for you.
So you can reach out
Wherever you want to.
62
operations review
T E L E K O M
M A L A Y S I A
B E R H A D
Fixed Line
Services
Dr. Idris Ibrahim
chief operating officer
TM TelCo
chief executive officers of subsidiaries
Yusof Ampuan Kechil
ceo
VADS Bhd.
Haji Mohamed Padzil Md. Said
ceo
Fiberail Sdn. Bhd.
Mohd Noordin Mohamad
ceo
Meganet Communications
Sdn. Bhd.
Ahmad Ismail
ceo
Telekom Sales & Services Sdn. Bhd.
63
operations REVIEW
In Telekom Malaysia, fixed lines services are managed and operationalised by TM TelCo. However, telecommunications
today is a highly complex industry, shaped by open and fierce competition, increased Internet phones,
and expanding cellular needs. During the period under review, fixed line services also continued to be
challenged by the far-reaching effects of the worldwide economic downturn.
Telekom Malaysia stands committed towards building more advanced infrastructure and strong support systems.
To date, expenditure on assets for network development stood at RM1,272 million, with non-network
related projects being allocated RM254 million. Local network, switching, transmission and international
circuits account for the bulk of the capital expenditure. These major areas of development are necessary
to improve the provision of access to new subscribers, clearing of waiters and enhancing maintenance
support systems.
Through concerted efforts of the various divisions, fixed line services managed to sustain its performance favourably
with a growth of 2.1% or a total revenue of RM8,145 million, compared to RM7,981 million the previous year.
Total operating expenditure, increased by 3.6% to RM1,425 million. This increase was attributable to activities for
improving operational efficiency particularly in network quality, marketing tools and staff skills.
Direct Exchange Lines (DELs) had reached 4,598,564 connections, showing a net increase of 24,662 over the
previous year. Of this, residential lines accounted for 73.2% and business 26.8%. Total gross installation
recorded for the year was 617,573. However, growth in DELs was hampered by a large number of
disconnections which totalled 589,497. The net installation performance was largely affected by a strong
upward trend in demand for cellular telephony while the disconnections were largely due to non-payments.
64
Fixed Line Services
B E R H A D
1,252,352.0
1,228,601.0
3,406,655.0
3,405,744.0
3,258,044.0
3,226,879.0
3,052,203.0
1997 1998 1999 2000 2001
3,500,000
1,172,755.0
Business Telephone
Residential Telephone
1,157,269.0
M A L A Y S I A
1,170,839.0
operations review
T E L E K O M
1,500,000
2,800,000
1,200,000
2,100,000
900,000
1,400,000
600,000
700,000
300,000
0
1997 1998 1999 2000 2001
0
In areas of limited coverage, the total number of waiters has been reduced by 7.1% from 98,000 in 2000 to 91,000
in 2001. A new radio technology, Code Division Multiple Access (CDMA) was deployed to expand network
coverage throughout the country as part of our continued commitment to provide services in pockets of
unserved areas in rural areas.
As the number of customers requiring sophisticated business operations increased, Data Services witnessed greater
migration of customers from analog to digital circuits. The number of subscribers using digital circuits
increased to 2,422. In line with that development and to support the government’s incentive for the
k-economy, the leased circuits tariff was substantially reduced between 50% and 84% during the middle
of the year. The analog circuits would be phased out in the near future. The corporate sector is now
enjoying greater savings while the service has become more affordable to medium sized businesses.
The other digital service, Corporate Information SuperHighway or COINS, a network transport for data, saw an
increase of 1,866 net lines or a growth of 110.2% over the previous year.
ISDN and ADSL had also become increasingly popular as data and voice can be integrated and transported on the
same line. So far 58,228 channels have been installed using ISDN, while ADSL began to attract more
customers. TMnet Streamyx is the main product using ADSL.
A national operations centre for exchanges incorporating CCS7 Signalling Network Management Systems was
launched to provide centralised maintenance and diagnosis, thus maximising staff efficiency and reducing
costs.
Non-network capital was aimed at enhancing support systems for mission critical internal processes. This was a key
operational requirement as Telekom Malaysia could not tolerate customer service inefficiency and
dissatisfaction.
65
1997 1998 1999 2000 2001
18,089.0
120,528.0
24,000
8,000
12,000
4,000
0
1997 1998 1999 2000 2001
0
5,022.0
25.0
20.0
20.1
20.1
8,000
20.9
Total Access Lines
Per 100 Population
5,592.0
6,031.0
2,000
160,000
120,000
Other Services
7,148.0
1,658.0
1,573.0
1,295.0
1,102.0
1,780.0
Toll Free Customers
1997 1998 1999 2000 2001
200,000
36,000
20.4
0
6,910.0
1997 1998 1999 2000 2001
4,576.0
14,000
8,866.0
42,000
28,000
156,600.0
48,000
34,512.0
56,000
60,000
162,276.0
70,000
188,839.0
Public Payphones
172,465.0
ISDN Customers
52,202.0
62,134.0
63,527.0
61,280.0
50,636.0
46,269.0
Leased Circuits Customers
6,400
20.0
1,200
4,800
15.0
800
3,200
10.0
400
1,600
0.5
1,600
0
1997 1998 1999 2000 2001
0
1997 1998 1999 2000 2001
0
While towns and the urban environs enjoy the best telecommunication facilities, the rural areas were not neglected.
RM32 million was spent as part as the Company’s universal service obligation (USO) to increase
connectivity for the rural community.
Telekom Malaysia stands committed to the vision of transforming Malaysia into a regional telecommunications hub
by 2005. It has now opened overseas offices (TMOO) in the USA, UK, Hong Kong and Singapore.
Support function were used to improve and ensure the accuracy of bills and timely resolution of billing disputes.
This was made possible by effective and efficient operations to reduce billing errors, increase cash
collection, and automate processes for billing complaints.
To support the e-Government and e-Payment system, Telekom Malaysia launched EBPP (Electronic Bill Presentment
& Payment) in year 2001. The project was another initiative to provide additional payment outlets and
inquiry channels for customers. With the EBPP solution, customers are now able to make telephone bill
payments at kiosks or on Internet Personal Computers (IPC) via a web page hosted by service providers.
Through the joint efforts of Telekom Malaysia’s EBPP team and the Electronic Government Consortium to support
the Electronic Government project, the Company had successfully launched its e-Khidmat services in
December 2001.
The payment kiosks, named Eazyway are now in operation at selected locations and Kedai Telekoms.
The SMART (Sistem Maklumat Aduan dan Resolusi Telekom) solution was used to provide an automated end-toend customer complaints resolution system. It is a solution expandable to cover fixed line, multimedia and
cellular services for the management and restoration of lines and other general complaints. As a result of
the deployment of the SMART solution, there was a marked reduction in the complaint resolution cycle
time from one month to seven days.
66
operations review
T E L E K O M
M A L A Y S I A
Fixed Line Services
B E R H A D
Telekom Malaysia had also successfully commissioned a system for fraud detection and prevention known as IFPS
(Integrated Fraud Prevention System) in 2001. This state-of-the-art system is capable of detecting
fraudulent calls on the IDD, STD, calling card and premium services. With its continued commitment to
quality, 16 of Telekom Malaysia’s key business divisions have attained ISO 9001/9002 certification while
other major divisions are actively pursuing the same objective. These initiatives would serve to further
improve the level of quality and delivery of services to customers.
It is believed that as a direct result of the quality initiatives, complaints per 1000 lines has reduced from 8.28 to 6.
Telephone restoration within 24 hours had also increased from 51.7% to more than 84.5%.
In terms of network performance, the availability of lines had been very encouraging and had achieved world class
levels, registering an average of 99.9987%, and 99.9984% for the switching and the transmission system
respectively.
Major Business & Government (MBG)
| MBG as Telekom Malaysia’s core marketing arm classifies
its customers into corporate, major businesses, government, domestic operators, resellers and ISP
segments. It offers a choice of services and products ranging from basic to more advanced multimedia
products.
In 2001, strategic marketing undertaken by MBG served to achieve its four main objectives i.e. retention of
corporate, government and major customers; capture new market/business opportunities; increase
revenue; and continue to introduce new products and services to the market.
Despite the adverse global economic situation faced by all commercial organisations, MBG recorded an
improvement in its Gross Sales performance by RM33.6 million or 0.9% to RM3,661.2 million against
RM3,627.6 million recorded last year. MBG contributed 45% of TM TelCo’s Gross Sales of RM8,145
million for 2001. Customer retention saw an increase from 39,227 in 2000 to 39,557 customers in 2001.
This was attributable to effective customer loyalty strategies conducted throughout the year.
Marketing Activities and Product Performance | Throughout 2001, a ‘Customer Relationship Program’
which included customer visits, face-to-face selling, and fast response to customers’ problems as well as
Equal Access awareness briefings were successfully conducted to gain customers’ loyalty with Telekom
Malaysia. In addition to offering excellent service quality, a series of seminars were conducted. These
included nationwide business solutions and ‘Partnering TM For Your Communication Edge’ seminars.
These seminars were aimed at enlightening customers on the benefits of Telekom Malaysia’s existing and
new products.
To propel the data business, new products called COINS iOffice, Myloca and BIZsecure were launched during the
year. An initial offering of Wholesale COINS VPN and Wholesale DSL services was made to further capture
new data business opportunities. The data network was expanded to accommodate the growing needs
of data networking. A total of 130 new nodes in the Managed Leased Circuit Network (MLCN) were
commissioned in 2001 bringing a nationwide coverage of 811 nodes for Managed Digital Leased Services.
67
Satellite and submarine cables
– Malaysia’s gateway to the world
In terms of DDN, installation, a new broadband Digital Leased Services network capable of supporting
bandwidth speeds of up to 155 Mbps was implemented with the first phase in the Central Region
completed during the year. In line with Telekom Malaysia’s vision to be a major hub for international
communications in voice and data services, new Global OSS arrangements with international
telecommunications companies were signed. MBG had also revised the pricing for Very Small Aperture
Terminals (VSAT), Domestic and International Digital Leased lines and services under the MSC tariff
effective 1 May 2001 in order to stay competitive as well as to counter threats from competitors.
Telephony Services | As at December 2001, MBG DELs grew to 673,488 lines comprising 641,507 business
and 31,981 residential lines respectively. This accounted for a 14.6% contribution to the total 4.599 million
Telekom Malaysia DELs. The number of waiters was reduced to 1,381 against the same period last year
of 1,636 as a result of new network investment and the introduction of Code Division Multiple Access
(CDMA) services.
The total installation of 87,225 DELs in 2001 was more then the 83,227 DELs installed in 2000. However, the impact
of the global economic downturn had resulted in many business closures in the electronics and
manufacturing sectors and dotcom companies. The mergers in the banking and security industries had
also brought substantial change. The unfavourable impact had caused an increase in the direct
disconnection rate from 62,160 DELs in 2000 to 74,968 DELs in 2001.
Telephones remained the main revenue generator contributing RM1,850.1 million or 50.5% of MBG’s gross sales.
Telephone revenue increased by 4.1% in 2001 compared to year 2000.
ISDN | Total ISDN customers increased by 9,040 or 45% bringing the total customer base to 29,020 as at the
end of December 2001. The increase was the result of aggressive promotional campaigns undertaken
throughout the year, particularly the ‘go digital go TMISDN’, ‘I Save & Surf’ and ‘Eze N3’ package
promotions. International service coverage of up to 40 countries (inclusive of 2 new connections to
Germany (Deutsche Telecom) and Japan (NTT) also contributed to the excellent customer growth
performance.
68
operations review
T E L E K O M
M A L A Y S I A
Fixed Line Services
B E R H A D
Leased Services | The Leased Services customer base stood at 50,711 in 2001, with a negative net growth of
1,093 due to customers switching from analog to high speed digital leased circuits. Corporate customers
in particular, were encouraged to migrate from analog to better digital services. As at December 2001,
there were 13,984 digital leased circuits compared to 11,735 in 2000. It accounted for 81.6% of Telekom
Malaysia’s 62,133 total leased circuits. A variety of packages such as the ‘leased circuit migration
package’ and ‘leased circuit broadband package’ were introduced to compete against attractive service
offerings by competitors. Telekom Malaysia succeeded in retaining its leased circuit customers by being
competitive through the strategic move in reducing the leased circuit tariff particularly for the crucial MSC
area.
Corporate Information Superhighway (COINS) | COINS revenue increased by 57.4% from RM67 million in
2000 to RM105.5 million in 2001 following the increased demand for data networking especially from
corporate customers. This increase was attributable to the addition of 134 customers (installation of 2,889
circuits) compared to only 116 customers as at the end of 2000. Various COINS products and services
were provided to accommodate the growing needs and expectations in data network by corporate
customers. These included COINS VPN & DVPN, COINS ATM, COINS Global and COINS iOffice. COINS
iOffice which was introduced on 18 January 2001 allowed users access to various communication facilities
including PC telephony, unified messaging, directory etc. This product had won subscriptions from 45
customers. There was a significant increase in the number of COINS Resellers further improving its service
offerings to valued customers.
Myloca (Hosting Services) | In its move to tap into the fast growing e-business, Telekom Malaysia has created
business opportunities providing expertise and consultation services in data management through Myloca,
a hosting service for SMEs. Telekom Malaysia offered SME customers a choice of services and products
from the management of complex data, equipment requirement and building advice access to IT expertise.
Four types of Myloca services were available for customers including Telehousing Services, Managed
Services, Customized Services and BIZsecure.
Video Conferencing | Heightened concern for the safety of air travel in the latter half of 2001, witnessed a
substantial drop in airline travel particularly in the corporate sector. In this regard, Telekom Malaysia
helped customers avoid business shortfalls by offering video conferencing services particularly to the
educational and medical services sector. Management meetings could be conducted concurrently in up
to 200 different locations via TM Live Audio Conferencing. Besides being easy to manage, companies
using this service could save time and operational costs. The service contributed RM1 million in revenue
in 2001.
Increase in Data for Outgoing and Incoming Traffic | Telekom Malaysia had successfully increased the
use of its network infrastructure by maintaining its position as a service provider of first choice for
customers. As at December 2001, the Company had recorded 178.4 million in outgoing international traffic
minutes compared with 174.7 million for the same period last year. The increasing trend was also reflected
in incoming international traffic minutes of 229.5 million in 2001 against 209.1 million last year.
69
Consumer & Business (C&B)
| Telekom Malaysia’s consumer and business marketing arm had
introduced several new products during the year to stimulate sales and usage of DELs in order to achieve
higher sales in 2001. With the rapid expansion of the cellular market and the change in mindset of young
users, maintaining the existing customer base posed the greatest challenge.
C&B placed great emphasis on satisfying customer needs and reducing customer complaints and dissatisfaction. To
this end, it has embarked on several customer management initiatives which include ISO Quality Standard
Compliance Programs at call centres.
To face the challenges of a highly competitive environment and to increase the customer base as well as stimulate
greater usage of the rapidly growing services, several innovative programmes offering attractive discounts
and bundling with competitive products were introduced during the year. ‘TM Golden’ offers had six
packages comprising Pakej Mesra Cyber 2, Pakej Peniaga Jaya, Pakej ‘Business 3 in 1’, Pakej Keluarga
Ria, Pakej Rakan Niaga and Pakej Istimewa Hari Perayaan. To ensure that Internet users did not miss out
on incoming calls, a second DEL was offered at a bargain price. Apart from giving incentives to encourage
recruitment of new customers by staff under the ‘Staff Cari Pelanggan’ programme, the Company also
engaged a third party to sell DELs and other services at selected Klang Valley locations. These combined
activities had resulted in 508,675 new installations for the year.
Apart from the programme to increase DELs, programmes to strengthen bonds with existing customers were also
implemented. In 2001, Telekom Malaysia continued its annual contribution for pilgrims by giving gifts worth
RM615,000 to some 50,000 Pilgrims through the Lembaga Tabung Haji. This programme had helped to
strengthen the existing excellent rapport between Telekom Malaysia and the Lembaga Tabung Haji as well
as its very large member base. Telekom Malaysia also introduced the ‘Malaysia Direct’ service for the
convenience of pilgrims. This service would enable pilgrims to call home and the call charges would be
borne by the number dialled in Malaysia. The ‘Glorify DEL Campaign’ reminded and educated customers
to look at the fixed phone in a new perpective, hence stimulating usage at home and offices.
Customer Assistance Service (CAS) | The key focus for Customer Services. CAS includes Call Centre
businesses and Operator Assisted services.
More than 90% of incoming calls were responded to within 10 seconds for most services thus achieving the
predetermined targets as indicated in the table below. The Customer Service Index (CSI) for 2001 had
shown a slight improvement to 74 points compared with 71 points in 2000.
Response time within 10 seconds
Services
108
101
104
999
Telesiswa
1050
103
Achievement 2001
95.8%
95.3%
96.0%
98.0%
83.0%
89.1%
88.2%
Achievement 2000
92.4%
90.3%
96.2%
96.4%
—
86.6%
83.3%
70
operations review
T E L E K O M
M A L A Y S I A
Fixed Line Services
B E R H A D
Call Centre Business | To enhance total customer satisfaction and customer trust in Telekom Malaysia, CAS
particularly TM1050, is set to play a pivotal role as Telekom Malaysia’s One Stop Customer Service
Centre, focusing on inbound calls such as general inquiries, billing disputes, complaints, applications,
order processing and equal access processing. The Telemarketing Centre, on the other hand, played a
significant role as a phone-based marketing service to support internal and external customers in line with
present business demands.
Operator Assisted Services | The International and Domestic Assistance and Directory Information Services
under CAS remained as the main revenue contributor, where call connections were packaged to fit the
need of the customer. Other than normal call connection assistance, services such as Malaysia Direct for
those abroad, Conference Calls for corporations, Telesiswa for students, and the 999 National Emergency
Services were also provided. The demand for Telesiswa in particular had increased tremendously and to
cater for this need Telekom Malaysia will be installing 25,000 units of Telesiswa in year 2002.
Telegraph | Telegraph services, although conventional, remained a reliable and economical marketing and
correspondence tool for customers. It continued to be an essential service to specific sectors such as
government, banking and finance. In recent years, Telegraph services had been enhanced from being only
an emergency text service, to that of a festive greetings provider through the ‘Dial 104’ Telegreeting Card
Services.
Operator Assistance Automation | As competition intensified and to meet coming challenges, CAS as
Telekom Malaysia’s frontline service, placed greater emphasis on human resource development. This
would ensure that it continued to be the key element in enhancing quality of service and total customer
satisfaction, hence improving Telekom Malaysia’s corporate image while being a viable and profitable
business. With this in mind, several programmes were introduced to improve staff morale and deliverables.
Year 2001 featured ‘Kempen Mesra Pelanggan’ under the quick-fix programme which ran from January
2001 to July 2001. The exceptional ISO Quality Standards Compliance programme held in May 2001 saw
seven more new sites under CAS being awarded the ISO Compliance Certificate.
Over the years, CAS human resources had been significantly reduced due to the VSS exercise and retirement. Thus,
besides human resource development, system enhancements and automation were planned as the next
precursor to meet incoming challenges to address staff reduction and to reduce dependency.
Product Marketing | Throughout the year, several packages had been put in place, focusing on the retention
of existing customers, attracting new customers and increasing usage. This was made possible through
product positioning, cross product bundling and usage growth programmes. Among others, a new product
launched was the RealReward scheme. This scheme is a form of loyalty programme which awards points
based on amounts indicated in the bill which will then be exchanged for specific gift items. The scheme
was designed to stimulate more calls. The ‘Hello and Menang’ and the ‘Good2Talk’ programmes were
also well received by customers. The tremendous growth in ISDN due to increased demand from IT
related customers, and the success of Telesiswa (reverse charged) calls to residential students, presented
greater market potential to tap in the future. New products which will successfully put on trial, included
the Ezee Phone and CDMA, which will provide a positive impact in attracting new DELs to meet customer
requirements in the near future.
71
Payphones | With the increasing shift towards cellular phone usage, payphone usage had experienced a down
trend. To balance revenue and maintenance cost, some 21,097 payphones were dismantled last year. The
current business focus is on pure maintenance and improvement of current operations.
Network Services
| New network infrastructure has been high on the agenda of the Company to meet the
business objectives for the development of Internet, Cellular and Data related services. These business
objectives to support Telekom Malaysia’s mission were formulated to retain its dominant player status in
voice and data broadband markets, achieve a 40% revenue stream from data services, expand its
wholesale business as well as position Malaysia as the regional telecommunications hub.
Telekom Malaysia continues to be the main provider of basic telecommunication services in Malaysia. In fulfilling the
commitment to provide world class telecommunications and IT infrastructure, the Company has spent
RM1.272 billion on capital expenditure in year 2001.
Telekom Malaysia has installed an extensive fibre network particularly in the access network with physical VFC 1.94
million, ECP 7.17 million, RFC 73,703. The widespread availability of fibre in the access network provided
flexibility in the provisioning of future broadband services.
Network Services had been actively pursuing the centralisation of operational and maintenance activities to achieve
maximum efficiency and therefore, reduction in cost.
CCS No. 7 Signalling Network Management System was extensively used to monitor the health of the signalling network.
The same system was also used to centrally diagnose network faults thus saving on maintenance cost.
Keeping in touch through
Telekom Malaysia’s world
class network
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operations review
T E L E K O M
M A L A Y S I A
Fixed Line Services
B E R H A D
As part of the cost reduction measure, Network Services had implemented the Network Management System (NMS)
with the objective of centralising the operations and maintenance process. In conjunction with this, the
National Operations Centre (NOC) for NEAX exchanges was launched.
Network performance results especially on systems availability was very encouraging with an overall average of
99.998%.
Currently, Telekom Malaysia’s mostly fibre optic based international network has the capability to provide high
capacity and high quality global connections for Internet and other broadband services. The C7 links
established with most countries would provide faster and high quality call set-up.
To complement the above services, Telekom Malaysia had introduced VSAT services for both domestic and
international private network applications and international gateway projects. The new VSAT services
known as TM Dialaway, TM Skystar Advantage and TM Faraway were deployed to address the digital
divide in rural and remote areas. These new services would be suitable for private network set-ups
including telecommunication services for numerous data applications as well as Internet for underserved
and remote areas. TM VSAT complemented the existing terrestrial networks for applications, such as
COINS, and served as the main infrastructure for ad hoc requirements, such as disaster recovery. As at
end December 2001, Telekom Malaysia had commissioned 350 VSAT terminals for private applications,
rural telephony and special government projects.
In addition to the above, Telekom Malaysia also embarked on new submarine cable projects such as the
SAT3/WASC/SAFE cable system which was scheduled for completion in April 2002. This new cable
system would be the first cable system to link Malaysia and the African continent, and would cater for
the untapped African market while providing diversity of routes to Europe. These systems are poised to
further improve the overall resilience and accessibility of Telekom Malaysia’s international network.
As part of its support to the nation in hosting international sporting events, Telekom Malaysia was fully involved in
managing telecommunication networks that supported the communication needs of the XXI SEA Games
held in Kuala Lumpur in September 2001.
Telekom Malaysia would embark on an Integrated Network Management System (I-NMS) to achieve an end-to-end
management of the network to meet Telekom Malaysia’s business objective of providing world class
telecommunication and multimedia services at competitive rates to customers.
There is a need to optimise all network resources on an integrated basis to reduce manpower, cost and time. In
this regard, Telekom Malaysia planned to introduce the New Generation Network (NGN) the implementation
of which would involve migration towards a packet based network. NGN should be capable of handling
data, voice and video communications and should be flexible in offering value-added services. Next
Generation DLC or MSAN (Multi-Service Access Node) would be introduced in the Third Quarter of 2002
as a single access node for both narrowband and broadband services.
The CDMA network provides an alternative solution to fixed line demand and would be able to cater for about
100,000 subscribers in the first year of its rollout. IS95B CDMA was introduced under Business Plan 2001.
It could cater for up to 64 Kbps data services. The Business Plan 2002 had planned for an upgraded
version of the network called CDMA 1X, with a data capability of 144kbps maximum. Three CDMA
stations in Sarawak namely Asiajaya Station, Bukit Sigalang Station and Bau Station were made ready by
the Fourth Quarter 2001.
73
In its strategic move towards broadband, Telekom Malaysia has installed ADSL (Asymmetrical Digital Subscriber
Line) in the Critical Business Areas of the Klang Valley, Penang and Johor Bahru. This technology is
capable of delivering a downstream speed of up to 8 Mbps without disturbing the telephony service
already installed on the same line as both data and voice services could be used at the same time. Under
Business Plan 2002, Network Services would introduce ADSL to all states with a forecasted expenditure
of RM330 million for the project.
Several trials and pilot runs were conducted throughout the year which will be beneficial to Telekom Malaysia in
terms of understanding and enhancing future technologies and services platforms such as Broadband
Fixed Wireless Access (BFWA), Wireline Broadband Access Technology (WBAT) and Next Generation
Services for CDMA.
The Company continued to explore new and cost effective technologies in order to achieve the objective of 30%
CAPEX efficiency in 2 years.
Customer Network Operations
| Customer Network Operations is responsible for the operations and
maintenance of Telekom Malaysia’s access network and acts as a front-liner, interfacing with customers.
Its two main activities are installation and maintenance of customer products and services, comprising
telephony lines, leased circuits and broadband (XDSC).
Highlights of Service Quality
Service Reliability
i)
Fault Rate (KTT) – MCMC target is 0.5, TM TelCo Target is 0.25
Service reliability indicates the average fault rate experienced by customers each year in respect of
the telephone service subscribed. Under the MCMC framework, it is targeted to have less than, or
equal to 500 faults reported per 1000 lines per year. Achievement for KTT in the year 2001 is 0.26.
This is well above the 0.5 target set by the MCMC. TM TelCo’s target is 0.25.
ii)
Service Restoration
Service restoration is a measure of cycle time for fault restoration from the time the customer lodges
a complaint to the time the fault is cleared inclusive of weekends and public holidays. The target set
by CMC is 80% fault clearance within 24 hours whereas TM TelCo’s target was 85%. TM TelCo’s
YTD achievement for year 2001 is 81.6% which is slightly above the set target by the CMC.
Information Technology Services
| Information Technology Services’s major product is BIZsecure, that
provides complete IT and communications recovery services with the mission to deliver a diverse
spectrum of business continuity solutions, allowing free enterprises to embrace technology, while
maintaining an acceptable level of business availability.
In 2001, BIZsecure was awarded the premier EMC ‘Hot-Shots’ Award for best working partnership, and was among
the final contenders in the corporate sector for the prestigious ‘2001 Anugerah Perdana Teknologi
Maklumat’ jointly organized by MAMPU and PIKOM. BIZsecure has been promoted throughout the year
with a national roadshow to Telekom Malaysia corporate customers. The company has been active in the
development of partnership programmes with other technology providers. BIZsecure Centre IT and
environmental infrastructure are continuously upgraded to ensure all service level offerings are guaranteed
74
operations review
T E L E K O M
M A L A Y S I A
Fixed Line Services
B E R H A D
to customers. The year started off with BIZsecure having 2 customers while 8 more potential customers
are in the pipeline. Efforts are being undertaken to further enhance, upgrade and expand services offered,
based on changing trends in technology and the market place.
Two new services currently being developed are DIZsecure, a ‘Disk Storage-On-Demand’ service, and WIZsecure,
a ‘Bandwidth-On-Demand’ service based on the ‘Pay-As-You-Use’ concept.
Service Quality Initiatives
| Telekom Malaysia’s Service Quality Initiatives are closely related to the
Company’s effort to spearhead and implement the Quality Policy and Quality Improvement and Business
Excellence (QIBE) initiatives. Telekom Malaysia’s quality policy has served as the framework for all the
continuous quality activities in TM TelCo’s quality management programmes.
TM TelCo’s Quality Policy is made up of the following principles:
• To practice total customer satisfaction
• Total commitment to deliver full and best services end to end
• To continuously apply effective quality management systems
• To ensure all quality initiatives add value to Telekom Malaysia’s business, stakeholders and customers
• To do the right things right, the first time and all the time.
Telekom Malaysia Business Excellence Assessment (TMBEA)
•
Telekom Malaysia has developed its own Quality Management System, named Telekom Malaysia
Business Excellence Assessment (TMBEA). The TMBEA quality management system was derived from
the Motorola Quality System Review, Malcolm Baldrige National Quality Award criterions, and ISO 9000
requirements. TMBEA is a management tool which enables objective assessment of the continuing
health of the company towards world class standards for each of Telekom Malaysia’s major business
units.
•
The Customer Satisfaction Index (CSI) Survey conducted in the Company is one of the TMBEA
initiatives to gauge commercial and residential consumers’ perception and satisfaction levels on service
quality provided specifically by the fixed line services. The CSI performance for 2001 of 7.4 indicated
a significant improvement over that recorded the year before.
ISO 9000
•
In addition to TMBEA, Telekom Malaysia continued to focus on ISO 9000 certification for its critical
and frontline functions to meet customer satisfaction besides serving as a marketing strategy to win
customer confidence.
•
Since 1996, a total of 14 major divisions had successfully attained and maintained ISO 9001/9002
certification. In year 2001 the following divisions have successfully attained the ISO 9000 certification:
– TSSSB in 22 Locations
– Network Management Operations in 381 Locations
– Network Coordination & Management
Other major divisions in TM TelCo are also actively pursuing the ISO certification programme, based on cross
functional processes rather than on divisional functions.
75
ISO 9002 Certification
– commitment towards excellence
Quality Improvement Teams
| The Quality Initiative in Telekom Malaysia continues to encourage
teamwork, resulting in an increased number of Quality Improvement Teams (QIT) and Quality Control
Circles (QCC). Currently, there are 470 teams company wide. Most teams have successfully completed
their improvement projects. The Customer Satisfactions Index increased 3% to 74%, over the previous
score. Various efforts to sustain customer loyalty have been carried out throughout the year.
2001 was another year of success for Network Management & Operations in terms of quality improvement initiatives.
Network Management & Operations had undergone the re-assessment audit for its ISO9002:1994 Quality
System. The scope of coverage was extended to include the Transmission Management Division, all
Network Engineering units in the operating regions, Quality Management and New Services of International
Network Operations, as well as transmission stations and switching exchanges. The total number of
stations certified to date stood at 524.
TCS Convention | The TCS Convention is an annual event, which serves as a showcase for the Quality
Improvement Teams (QIT) and the Quality Control Circles (QCC) to present quality improvement project
findings. TCS Conventions have been organised at the state as well as national level.
Standardisation of Projects | A standardisation committee has been set up to identify and recommend viable
projects for standardisation 55 projects had been identified for standardisation in year 2001.
Customer Perception Management | An inter-divisional committee has been formed to address and rectify
issues relating to external customers which could influence customers’ perception of Telekom Malaysia’s
products and services. The committee’s finding had resulted in the successful implementation of the
following initiatives in 2001 to strengthen customer services:
• Opening of Kedai Telekom counters on non-working Saturdays
• Installation of customer care hot lines
• Enhancement of the image and professionalism of front line staff
• Upgrading of Kedai Telekoms
• Provision of better facilities for customers to make payment
• Improvement of processes for telephone installation and restoration.
76
Box Article
1
Background
Emerging Technologies:
MULTISERVICES
network
The current telephone network, which has been developed over
the decades, has not undergone any fundamental change. This legacy network is based
on a dedicated facility allocation, also known as ‘circuit switching’. Services are limited to
basic access or are ‘connections’ oriented.
Each of these services is served from a separate network platform for voice telephony,
mobile voice telephony and data traffic. These discrete networks require their own
network elements and provisioning systems and they have to be managed separately.
This technique has been proven inadequate for future services.
The new Multiservices Network offers a solution towards an integrated voice and data
communications system. It will enable Telekom Malaysia to meet current challenges and
tap into tomorrow’s opportunities in the most flexible, scalable and cost-effective manner
in order to maintain its market leadership.
77
WHAT IS MULTISERVICES NETWORK?
The Multiservices Network converges
fixed, mobile, video and data onto
a singular multiservice platform. It
covers all aspects of network facilities.
It is made of four distinct layers,
namely the access, core, control and
the service or application layers. A
typical Multiservices Network is
illustrated in Fig.1 below.
To facilitate the access layer some
new equipment has been introduced
recently. These include the Multi
Service Access Node (MSAN) and
Digital Subscriber Loop Access
Multiplexer (DSLAM). These new
network elements will enable the
offering of more economical high
bandwidth services to the customers.
In addition to the need for high-speed
connections, there are also urgent
requirements for mobility, roaming
and wireless in the access domain.
In supporting these needs, focus is
being given to 3G in mobile and
Code Division Multiple Access
(CDMA) technology.
The core layer is made up of a
packet/cell switching system which is
interconnected by a high speed
transmission system, namely the
Dense Wavelength Division Multiplexer
(DWDM). This single infrastructure is
able to switch all types of traffic,
including voice, video and data. The
gateway (GW) network element serves
as a mediator between packet based
switches and conventional media.
• Service/
Application
Layer
The service or application layer
provides the platform from which all
services are generated to serve the
customers. It basically consists of
servers able to cater for all applications
or dedicated to a few, depending on
the volume and complexity of the
service.
All these elements are then managed
by a single Network Management
System (NMS) platform for easy endto-end management of services from
provisioning to operations and
maintenance.
Application Servers
• Control
Layer
Softswitch
• Core/Backbone
Layer
(Media Layer)
• Access
Layer
The control layer serves to ensure
that the call setup is carried out
effectively. Soft-switches are used for
this purpose.
MGC
IP/ATM Network
GW
Wireline Broadband
& Narrowband
GW
Wireless (GSM/CD
MA/3G/B-FWA)
NMS : Network Management System
GW : Gateway
MGC : Media Gateway Control
IP : Internet Protocol
Figure 1: A Typical Multiservices Network Structure
N
M
S
ATM : Asynchronous Transfer Mode
78
Box Article
Emerging Technologies:
1
MULTISERVICES
network
SERVICE REQUIREMENTS
The Government of Malaysia aims to
move the nation into the information
age in its effort to improve the country’s
social and economic standing in the
world. In realising these aspirations,
Malaysia is looking at the dissemination
of knowledge to its populace by
positioning itself as the preferred hub
in telecommunications, business,
education and information in the Asia
Pacific region.
In supporting the Gover nment’s
aspiration to build a K-society,
Telekom Malaysia has invested
heavily in its move towards becoming
a leading regional telecommunications
provider. The Group promotes a
customer focused culture by
enhancing customer relationships
through innovative products and
services. This can be achieved by
creating groups within the Company,
specifically focusing on multimedia,
cellular and data services. The
Company currently supports a host
of services required by customers
within its present infrastructure.
The future opens up opportunities for
the introduction of new and enriching
value-added services capable of
catering for the needs of customers
on a more personalised level. New
customer requirements will include
fast service provisioning, Internet
capability, newly enhanced services
and unlimited bandwidth capacity.
Other future multiservices offerings
include the following:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Unified Messaging Services
Televoting
Calling Card (enhanced)
Network Call Centre
Voice Mail (option IP)
Prepaid (enhanced)
Sponsored Call
Internet Call Waiting
Internet Call Diversion (ICD)
Short Messaging
Wide Area Centrex
Universal Access Number
Split Charging
Personal Number Services
Converged Virtual Private Network
Virtual PBX
Home Zone Billing
Location Based Services
Enhanced 994/991
Figure 2: Future Multiservices
Network Offerings
In addition to the communicationbased services described above,
the drive towards the K-economy
also encompasses content and
transactional services. These
services offer customers extra
convenience in an array of
interesting new services such as ecommerce, financial and stock
transactions, which are accessible
via both fixed and mobile Internet.
THE FUTURE MULTISERVICES
NETWORK
Existing infrastructure requires service
activation to be done distributively
at every network facility. It is, however,
not adequately versatile to provide
all the required services of the future.
It would be inefficient and resource
prohibitive to provide these services
to all customers.
The Multiservices Network will address
these limitations by having a single
consolidated network, through the
integrated management systems,
where resources are shared and
handled more efficiently. Overall
cost reduction is anticipated and
the savings can then be transferred
to the customers. Figure 2 shows
the migration from the existing
network to the new Multiservices
network.
79
Network
Management
Network
Management
Switching
Switching
Network
Management
Application
Servers
(Media Gateway Control)
MGC
Transmission
Transmission
Packet Core IP/ATM
Migration
MG
Wireline
Access
Wireless
Access
(Media Gateway)
Wireline
Access
Multiple, Single Service Network
MG
Wireless
Access
Single, Multiservices Network
Figure 3: Migration from Current Network to Multiservices Network
The ‘open’ nature of the Multiservices
Network allows ease of third party
application development and speedy
service deployment.
IMPLEMENTATION OF
MULTISERVICES NETWORK
Telekom Malaysia supports the above
initiatives through the creation of a
Multiservices Network, capable of
conveying all types of communication
services. It will provide convenient and
hassle-free access at the customer
end irrespective of the type of service
requested. This network allows rapid
service creation and is able to reach
customers within a short period from
conception.
Thus, the motivation for creating a
Multiservices Network is to have a
highly efficient single network capable
of providing exciting new services in a
timely manner. What is most important
is that this can be achieved in a most
cost-effective way.
Telekom Malaysia will deploy a
Multiservices Network by procuring
the relevant network elements.
Implementation of Media Gateways
will commerce at the end of 2002.
The development of the Multiservices
Network and its migration will be
The Multiservices Network operates
on a service centric principle, which
effectively supports growth in valueadded services and does so
expeditiously. It is a single network
infrastructure with a greatly simplified
architecture, which translates into
reduced operational costs.
staggered through several calculated
and carefully planned phases.
Selective services will be offered by
the 2nd Quarter of 2003 and will be
followed in stages by other services.
Finally, it is anticipated that the overall
Multiservices Network structure will
mature to the extent that it will enable
the integration of multimedia-based
services. When that occurs, the
customer will be able to enjoy a myriad
of services with short provisioning
time and at minimum cost.
80
subsidiaries
T E L E K O M
M A L A Y S I A
B E R H A D
vads
berhad
VADS Berhad (VADS), a wholly owned subsidiary of Telekom Malaysia since 1997, provides networking services,
electronic commerce solutions and applications for commercial enterprises operating in the field of ebusiness, thus ensuring vital communications at a global level. In supporting managed networking services
and addressing growing customer demand, VADS also provides managed e-Services and e-Solutions
through its two subsidiaries, VADS Solutions Sdn. Bhd. (formerly known as The Network Connections Sdn.
Bhd.) and VADS e-Services Sdn. Bhd. (formerly known as Electronic Commerce Sdn. Bhd.).
Year 2001 marked a particularly significant milestone in the Company’s history.
In August 2001, the Securities Commission approved VADS’s application to be listed on the Second Board of the
Kuala Lumpur Stock Exchange. Details are currently being finalised for public listing, scheduled for 2002.
On completion of the process, VADS will become the first subsidiary of Telekom Malaysia to be listed on
the local bourse.
Despite operating in a sluggish economic environment, VADS has once again demonstrated resilience and
improvement, recording a sales turnover of RM123.9 million in 2001, a 54% increase from the previous
year's performance. 2001 is its best performance year to date.
Since its inception ten years ago, VADS has concentrated on the implementation of a carefully planned strategy.
The hiring of highly skilled personnel to operate its autonomous business units has created a human
resource ethos of dedication and expertise with planned career development paths and skill building
programmes for employees. A schedule of aggressive marketing in the corporate arena, building on
strategic alliances with reputable global players, has helped carve a niche for VADS as a leading ebusiness solutions provider in
the country. The Company has
long operated a policy of
education in the corporate
world with the two-fold benefit
of creating a more efficient and
knowledgeable
business
environment in Malaysia, better
understanding of the products
on offer, while realising greater
commercial opportunity and
better returns. VADS believes
its ongoing campaign to
educate enterprises on the
economies-of-scale that can
be derived from outsourcing
data networking needs. The
subsequent acceptance of this
proposition has contributed significantly to its business growth in 2001.
The outstanding achievements recorded here can be attributed to the VADS team of committed professionals who
have worked hard to ensure the solutions and services offered are customer-centric and cost-effective.
While VADS is cautiously optimistic that there will be an economic turnaround in 2002, the Company will continue
to focus on its core business of providing managed network services to enterprises and to further move
up the value chain in the provision of auxiliary products and services to customers. These products and
services include the provision of e-commerce applications, customer relationship management and call
centre management software applications.
Furthermore, VADS’s strategic alliances with world-class solution providers will continue to strengthen the Company’s
presence and capabilities. VADS’s strategic partners include AT&T, MCI WorldCom, Sun Microsystems,
Cisco Systems, Microsoft and Onyx Software Corporation.
Ever prudent, VADS will continue to implement cost-efficiency measures as well as maximise resources to ensure a
continued growth path. As a result, VADS will be able to offer better value to customers and maintain its
competitive edge in an ever more challenging marketplace.
81
Fiberail
fiberail
sdn. bhd.
Fiberail Sdn. Bhd. (Fiberail) is a joint venture company between Telekom Malaysia and Keretapi Tanah Melayu
Berhad (KTMB). Anticipating a huge demand for telecommunications services, the Ministry of Energy,
Communications and Multimedia has awarded Fiberail the licence to provide telecommunication network
related services. Fiberail has also been granted the exclusive right by KTMB to use their railway corridor
for a fibre optic cable network.
Fiberail has a 1,600 km fibre optic cable network connecting all major towns in Peninsular Malaysia. With that,
Fiberail has been able to offer cost effective and high quality network solutions to meet the demands of
the fast growing information, communications and entertainment industry. With the Network Facilities
Provider (NFP) and Network Service Provider (NSP) individual licences, Fiberail offers flexible leased fibre
optic packages, broadband services and total business solutions. To complement its core products,
Fiberail also offers ancillary services such as telecommunications tower space and equipment cabin
space. These products will meet the requirements of telecommunication operators, financial institutions,
broadcasting organisations, multinational corporations and the ever-expanding and fast growing IT industry
as well as multimedia service providers. Fiberail has also introduced numerous value-added services such
as Consultancy services and Co-Location services to cater for customer demand in diversified services.
Fiberail has been appointed as the consultant to the Double Track Project for the relocation of the fibre
optic cables from Rawang to Ipoh.
The 100% fibre optic network helps customers in reducing network set-up time and cost. The Integrated Network
Management System (NMS) and the National Control Centre (NCC) in Kuala Lumpur monitor the systems
for performance quality, usage and access security. Regional Control Centres and Operation Centres are
strategically placed to watch over the network from regional sites and they communicate with the NCC
on technical situations to ensure smooth functioning. With the support of a professional and highly
committed marketing and technical team, Fiberail will ensure high quality and reliability of network service,
particularly for high volume, high speed data and mission critical applications to customers who require
total solutions for their telecommunication needs.
Being the first licensed telecommunications operator to achieve ISO 9002 certification, Fiberail never compromises
on the quality of products and services to customers. Moving forward in meeting new challenges, Fiberail
will focus on further improving the quality of service and the enhancement of products and services
according to customer demands and expectations.
Staff training and empowerment is paramount in contributing to the success of any company, and in line with the
national aspiration, it remains a high priority to Fiberail. With a staff strength of 138, this dynamic
company has recorded a healthy growth in profit, and satisfactory revenue per employee figures, in what
has been a demanding year in economic terms.
Providing quality products and services to its customers is the main reason for Fiberail’s success. In the near future,
Fiberail will embark on the Network Diversity project. This second cable network project will be
implemented in stages and Fiberail will be able to enhance its services to the level of ‘fine nines’
equivalent to international standards.
Future demand for a fibre optic telecommunications system is deemed huge as the need for high-speed audio, video
and data transmission increases at national and international level. With constant review and upgrading
of technology for its network planning, equipment and engineering support, Fiberail is confident in
ensuring superior quality products for a full range of service packages for customers. Fiberail is also
identifying the value of international market demand and the credibility of foreign investors.
Even though year 2001 has been a very challenging year, Fiberail has benefited from the rapid growth of the
telecommunications industry. Fiberail will continue to be committed to its customers and aims to be
recognised as a Company that can provide the necessary support for the growth of their businesses.
82
subsidiaries
T E L E K O M
M A L A Y S I A
B E R H A D
meganet
communications sdn. bhd.
Meganet Communications Sdn. Bhd. is a joint venture company between
Telekom Malaysia and Nippon Telephone and Telegraph (NTT),
Japan. Meganet is licensed to provide Intelligent Building
Systems (IBS), Integrated Telecommunications and Information
Technology Solutions including multimedia applications to both the
Government and private sectors.
Meganet offers a wide range of IBS Services including Integrated Building
Management System (IBMS), Structured Cabling System, Network/
Telecommunication System, Local Area Network (LAN) and Wide
Area Network (WAN) System, Building Access and Security
Management System, Car Parking System, Audio Visual System,
Smart Card Application Solutions and Intelligent Building
Electrical System (IBES).
The year 2001 demonstrated continued strong performance of Meganet with
the completion of several high profile projects, such as the Putrajaya
and Wisma Telekom Jalan Semarak Building infrastructure. Meganet
is on track in achieving its short and long-term goals by focusing
on repeat businesses from the same and potential clients.
As part of the Group’s initiative to further strategise its business in year
2001, Meganet added Intelligent Building Electrical System (IBES)
to its existing list of products and services. With this expansion
and diversity in products and services offered, Meganet is better
positioned at meeting customer needs.
Year 2001 saw management changes at Meganet, with Encik Mohd Noordin
Mohamed leading the Company as the new Chief Executive Officer
and Dr. Idris Ibrahim as a new member of the BOD.
The year also witnessed Meganet entering a new business on Security
Management Systems. This venture introduces the Company to
a new and challenging horizon, with the exploration and potential
expansion of its capabilities in security operations, thus ensuring
a high intrinsic long term value for Meganet.
In line with Meganet’s mission and vision of becoming one of the top IBS
service providers, it continues to work with Telekom Malaysia as
a turnkey contractor for Telekom Malaysia National Operation Centre
particularly in developing Intelligent Building concept. Meganet is
deeply involved in the design and build stage of the project.
Although 2001 had been a challenging year, Meganet showed a healthy
growth in the period under review. Excellent solutions and
services are the key contributing factors for the significant increase
in the number of clients and projects undertaken. The Company
is confident in forecasting a healthy growth trend in future years.
83
TELEKOM SALES & SERVICES
SENDIRIAN BERHAD
(190662 - X)
telekom
sales & services sdn. bhd.
Telekom Sales & Services Sdn. Bhd. (TSSSB) is a customer service
organisation that focuses on providing one-stop solution for
Telekom Malaysia Group’s products and services. With its 93
Kedai Telekom outlets nationwide, TSSSB serves to act as the
prime channel to market an array of Telekom Malaysia’s
products to its consumers and business customers.
To complement its customer service function, TSSSB also provides a host of Information and Communication
Technology (ICT) products and Customer Premises Equipment (CPE) to its customers through its Kedai
Telekom outlets, corporate sales division, and its network of dealers and agents.
The Company also works very closely with Telekom Malaysia’s product marketing division, TM Multimedia, vendors,
suppliers, manufacturers and business partners in providing certain key products and services such as
prepaid phone cards, TM Rented Payphone, TMnet services, ISDN special promotions to individuals and
business customers.
For customised services and solutions, the Company, through its corporate sales division provides customers with
professional advice and consultancy services ranging from feasibility study and proposal stage to actual
procurement, delivery, installation and projects commissioning of various sized projects.
As part of its continuous effort to enhance quality, 25 Kedai Telekom outlets were awarded ISO accreditation in
August 2001. As manifestation of the premium placed on quality, the remaining 68 Kedai Telekom and the
Company as a whole will be pursuing ISO certification in the coming year.
With a total workforce of 1,290, TSSSB continues to serve the 4.6 million Telekom Malaysia direct exchange line
(DEL) customers, comprising more than 200 corporations, government departments, major businesses and
SOHO ICT/CPE customers.
TSSSB’s objective is to enable its business and residential customers to communicate using an extensive product
and service portfolio covering voice, data, internet and multimedia being made available by the Company
and Telekom Malaysia Group as a whole.
The clarity of
our future is guided by
one crucial factor...
... you.
Reaching Out, To Tomorrow
You want to
work faster.
You want to
That's what
work easier.
technology does.
An enabler enhancing everything we do.
We're constantly
evolving our technology solutions.
So that you'll never notice how it works for you.
We're reaching out with the right technology.
So you can
play, work and learn more,
in less time than ever.
Just reap the benefits.
86
operations review
T E L E K O M
M A L A Y S I A
B E R H A D
Cellular
Dato’ Dr. Ir. Mohd Khir Harun
chief executive officer
TM Cellular Sdn. Bhd.
TMTOUCH is the digital cellular telephone service provided by TM Cellular Sdn. Bhd. (TMCSB) formerly
known as Telekom Cellular Sdn. Bhd., a wholly owned subsidiary of Telekom Malaysia
Berhad. TMTOUCH is based on the Global System for Mobile Communication (GSM)
technology, operating on the 1800 MHz frequency spectrum, which offers high quality service
to customers. GSM provides greater security, better coverage both indoors and outdoors,
superior speech quality, clearer transmission and improved capacity for data transmission
capabilities.
As a result of the implementation of various programmes to encourage usage and achieve good revenue
generation, the period under review saw TMCSB moving closer towards realising its aim of
becoming a leading cellular provider in Malaysia with improvements made in customer
service, coverage, capacity and quality. TMTOUCH operates 34 customer service centres
nationwide, with 8 in the Central, 6 in the Northern, 4 in the Southern and 3 in the Eastern
region of Peninsular Malaysia, 8 in Sabah and 5 in Sarawak.
TMTOUCH is dedicated to the continuous improvement of services on offer. It gives top priority to customers and
is taking appropriate measures to meet the demands of an increasing subscriber base by offering an
increasing range of products and services. The company has seen considerable growth in its customer
base increasing from just 9,000 subscribers in September 1996 to a current registered 1.2 million
subscribers at the end of 2001. This number is expected to touch 2.5 million by 2003.
TMCSB is constantly improving and upgrading TMTOUCH’s network coverage throughout Malaysia. Our main focus
is to introduce the latest technology to customers and create a platform for the provision of future
services such as 3G. Accordingly, several agreements have been sealed between TMCSB and various
87
vendors to develop the TMTOUCH Network Management System (NMS), and to upgrade the Voice
Compression Equipment (VCE) as well as the General Packet Radio Services (GPRS) capability. By
installing these various equipment, our subscribers will be able to enjoy better network quality and
capability, as well as faster, smoother and clearer incoming and outgoing calls.
The international roaming service provided by TMTOUCH has been substantially increased from 45 roaming partners
in 2000 to 57 countries through 79 networks worldwide. TMTOUCH offers a variety of value added
services such as Caller Line Identification Presentation (CLIP), Call Holding, Call Waiting, Voice Messaging
(TOUCH Link), Call Forwarding, Itemised Billing and International Direct Dialling Access (IDD). Wireless
Application Protocol (WAP) services which were available since October 2000 offer the latest news, stock
prices, business information, entertainment updates and traffic information. TMTOUCH operates a
operations REVIEW
corporate homepage http://www.tmtouch.com.my which is divided into 3 segments: informative (information
based contents), interactive (a mediator between customer and company, a one stop centre) and
transactional (a business centre via the web).
In order to catch up with the fast paced growth of the telecommunications industry today, TMSCB has decided to
re-position the TMTOUCH brand in order to reinforce awareness of it in relevant markets. This new master
brand positioning will project TMTOUCH as ‘Making Everyday Life Better’. In other words TMTOUCH is
the choice for people wanting to make their everyday lives better. The new brand will convey the message
that TMTOUCH not only provides the best of communication technologies but also offers value for money,
innovative and versatile products and solutions in a caring way.
88
operations review
T E L E K O M
M A L A Y S I A
Cellular
B E R H A D
A major area of growth in the cellular market worldwide has been the massive rise in the use of Short Messaging
Services (SMS), allowing customers telecommunication contact at a fraction of the price of a voice call. SMS
is particularly popular in the TMCSB young market segment. To that end, TMTOUCH has launched several
SMS based products to further attract new customers and now offers a suite of eight SMS services.
Touch Messaging enables subscribers to send messages from one handset to another, while Touch Stock allows
subscribers to request instant stock information. The TMTOUCH SMS Summons Checkpoint allows
subscribers to check on the possibility of summons for traffic infringements. This new infotainment service
gives TMSCB the distinction of being the first cellular operator in the country to offer subscribers such a
service. This effort has been recognised and acknowledged by the country’s Official Record Keeper and
will be listed in the next publication of The Malaysia Book of Records, as the ‘First Summons Check Via
Cellular Phone’. Besides that, TMTOUCH is also offering its subscribers instant access to entertainment,
communication and information via the Zed Mobile Value Added Service. This is yet another SMS-based
service, a collaboration between TMSCB and Sonera Zed Philippines Inc. Zed offers various forms of
unique ringtones and graphics to personalise users’ handsets,
new games to captivate its users and other new services like
mobile chat, sports and news information for people on the
move. TMTOUCH subscribers can use the ZED Mobile Value
Added Service immediately without having to register. All they
need to do is to be a postpaid subscriber and posses a
handphone, supporting text messaging. The access code for
Zed is 1234 and the cost for enjoying the service ranges from
RM0.20 to RM1.50.
The TMTOUCH Yahoo Messenger service enables the sending of
messages through a mobile phone instead of via personal
computers. TMTOUCH subscribers who enjoy its Touch
Messaging facility will be able to use this service to send,
receive and reply to instant messages with their acquaintances
online. The service also doubles up as a presence awareness
application. The TMTOUCH Mood Swingers facilitate the
download of a variety of ringtones and logo graphics from the TMTOUCH’s website. Ringtones dedication,
picture messaging, flash messaging, blinking messaging, greeting package and TMTOUCH Soccer Alert
are also available on this service. During Ops Sikap, TMTOUCH subscribers received SMS messages with
details of accident blackspots and numbers of fatal accidents a week before and after the Hari Raya
period. The TMTOUCH Cool Chat service supports conversation between more than 2 parties at one time.
Each party will be able to listen and talk to multiparties simultaneously. The party invoking the
conferencing service must be a subscriber of TMTOUCH while the call recipients could be 013 peers
themselves, other mobile operators or PSTN subscribers, both local and overseas.
Our customers’ convenience is our top priority. Bearing that in mind, TMTOUCH will always try to create ease for
our subscribers especially in eliminating unnecessary stress or problems. To cater for service excellence
to its customers, the TMTOUCH Telecare Centre is available anytime between 8.00 a.m. to 12.00 midnight,
seven days a week. This Centre can be contacted at 013-1111 or 03-2687 8888 for postpaid and prepaid
subscribers. All call-in complaints/enquiries will be answered by our Customer Service Consultants
whereas written complaints will be attended to by the Customer Correspondence Consultants. All our
Consultants will provide information to potential users and escalate problems to the relevant departments
for speedy resolution. The Telecare Centre is well-equipped with the latest technology such as the
Customer Contact Management (CCM) system which enables our Consultants to respond to each enquiry
as fast as possible. The Centre is not only established for the benefit of our customers but also for
89
TMTOUCH to gather feedback from customers regarding our services. This will help us to improve our
services and fulfill the requirements in the Customer Satisfaction Index (CSI) survey conducted by the
Malaysian Communications and Multimedia Commission (MCMC).
The cellular market has witnessed increasing demand and a growing customer base in the prepaid segment.
TMTOUCH offers a choice of two services, Touch Advance or Prepaid intm.
Touch Advance has been in the market since December 1998 and as of 31 December 2001, it has a total of 285,030
net subscribers. It offers two flexible and innovative rate plans. The ValueCall-Local package offers lower
local rates for all off-peak calls at RM0.39 sen per minute with a cost saving of 33%, while the ValueCallNation comes with a lower long distance rate for all off-peak calls at RM0.67 sen per minute, over 40%
lower than the current charge. Starter packs for Touch Advance retail at RM178 with recharge cards in
denominations of RM50 and RM100.
TMTOUCH recently introduced a second prepaid service, intm, which by 31 December 2001, had registered a total of
102,557 subscribers. Targeted at
teenagers and the early twenties
market, intm was fittingly launched
with a hip-hop commercial, and
offers a 20% discount on airtime for
calls made after midnight until 11.59
a.m.. The intm starter packs retail at
RM168 with recharge cards available
at RM50 or RM100.
TMTOUCH serves an extensive market
comprising corporate, government
and individual sectors. Although its
major focus is on the 18-25 year
age group, for which it launched its
Touch Advance prepaid services, the
Company has also lined up several
packages for its post paid market
segment, including the Millennium
Plus Package (Public Package) and
Super Saving Promotions (Super Touch
and Super Off-Peak) until March 2002. The packages offer a
variety of attractive rebates and discounts.
TOUCH Extreme, TOUCH Premium and the new Millennium Plus packages are
especially designed to attract market attention, thereby inducing subscription
to TMTOUCH. TOUCH Extreme is designed for heavy users, offering consumers
the flat rate of RM0.20 sen per minute, nationwide. The service also provides a credit
limit of RM500, with no connection fee or monthly fee for value added services. TOUCH
Premium, designed for those who receive but rarely make calls, offers a reduced monthly tariff of only
RM20, and the new Millennium Plus package, while retaining its tariff, offers subscribers airtime rebates,
free connection fee and monthly fee for value added services.
TMTOUCH was the Official Cellular Provider for the prestigious XXI SEA GAMES, held in Malaysia in September
2001 as well as for the Telekom Malaysia Le Tour de Langkawi 2001.
90
Box Article
2
Democratising Technology:
Telekom Malaysia
as a
BRIDGE
to the
digital divide
The term ‘Information Economy’ brings to our minds the tools and assets of a prosperous society: peer-topeer computing, mobile devices and enterprise resource planning systems. Malaysia has a lot to gain from
being ‘connected’. A small-scale farmer and those in the cottage industry may have little use for supplychain management tools but they would benefit considerably if they could pick up a mobile phone and find
out a buyer who can offer him the best price for his products.
Like many other developing countries, Malaysia also suffers from the lack of a comprehensive telecommunications
infrastructure particularly within certain areas of its rural communities. The problem is large enough for it to
have its own terminology: Digital Divide. The concern here is, how do we bridge this divide? How do we
make technology available to everyone? How do we achieve the democratisation of technology?
CONCEPTS AND DEFINITIONS –
reliable telephone service and the
opportunities that are available on-line.
GENERAL
fastest or most convenient Internet
In general, those who are poor and
In just about every country, a certain
connection. The gap in accessibility
live in the rural areas are likely to run
percentage of people have the best
between these two groups of people
the risk of being left behind than
information technology that society
is the phenomenon commonly called
wealthier residents of urban areas.
has to offer. These are the people who
the Digital Divide.
have the most powerful computers,
Low-income groups, the less educated,
the best telephone service, fastest
To be on the less fortunate side of
and children of single-parent households,
Internet service as well as a wealth of
the divide means that there is less
particularly those who reside in rural
content and training relevant to their
opportunity to take part in the new
areas, are among the groups likely to
lives.
information-based economy, in which
be deprived of access to information
many jobs are related to computers
resources.
On the other hand there is another
and computer-related advantages.
infrastructure and income appear to
group of people, who, for one reason
There is less opportunity to take part
be among the leading elements driving
or another, do not have access to the
in education, training, shopping,
the digital divide today.
newest or best computers, the most
entertainment and communication
Education,
national
91
Bridging the Digital Divide means
or it won’t be in business at all”, then
regulators in Malaysia have put in
bridging the gap between individuals
we should bring the issue into focus.
place facilitating and transparent
or groups – the elderly, people with
governance. This will ensure that
disabilities, those who live in rural
markets are open and competitive,
areas, and so forth – who are in
THE “PHYSICAL” BRIDGE OF THE
where issues are addressed and
danger of being excluded from the
DIGITAL DIVIDE: ACHIEVING ACCESS
made
Information Age economy.
AND INTERCONNECTION
competitors, domestic and foreign,
It is obvious that infrastructure is a
can set up businesses quickly and
high priority need for Malaysia and a
make money.
equitable,
where
new
DEFINING THE DIGITAL DIVIDE FROM
huge impediment to access. For
A PRIVATE SECTOR PERSPECTIVE
example, the tele-density rate for
A country’s most important resource
Malaysia or the number of telephone
SOFT BRIDGE OF THE DIGITAL
is its people. Companies are only as
lines per 100 people is about 19.8%.
DIVIDE: DEVELOPING THE HUMAN
good as their workers. Highly skilled,
The comparable density for both
CAPITAL
well-educated workers make for
Canada and the United States is
The second element in addressing
stellar businesses and create superior
more than 60% (Ovum, 2002). Imagine
the Digital Divide is developing the
products. In a society that increasingly
the market potential for Malaysian
human capital. The government has
relies on computers and the Internet
companies if our economy were to
traditionally been the major provider
to deliver information and enhance
enjoy that level of infrastructure.
of education and training. It is expected
communication, we need to make
that the public sector will continue to
sure that everyone has access. Thus
In this aspect, the burden of developing
play a major role in preparing a skilled
ensuring access to the fundamental
infrastructure still lies with the
labour force for the IT-intensive
tools of the digital economy is one of
incumbent
economy of the 21st century.
the most significant investments our
companies. Only the private sector
nation can make. Our domestic and
has
global economies will demand it.
knowledge,
the
telecommunication
resources,
technical
Concurrently, the private sector, in
sense
of
collaboration with non-profit groups
Ready access to telecommunications
innovation and bottom-line interest
and educational institutions, has
will help produce the technology-
that are essential to developing quality
assumed increasing responsibility in
literate work force that will enable
fibre optic networks and other systems
developing high technology skills
Malaysia to become a force to be
that form the backbone of the digital
for business workforces in selected
reckoned with in the global economy.
economy.
industries
and
the
and
communities.
Government and businesses must join
The reverse of the Digital Divide,
The
infrastructure
forces to enhance access to computer
Digital Inclusion, not only advances
development in Malaysia can and will
technology and the Internet for specific
the good of society, but the bottom
make progress in bridging this digital
groups who are in danger of being
line interests of businesses.
divide is a matter of particular concern.
excluded from the Digital Revolution.
vision
that
This is because one cannot even
These partnerships are central to our
Alternatively, failure to address the
think about access to the information
efforts to achieve digital equality and
problem of digital inequality could
highway when you have no highway.
hence
have grim implications for individual
the
technology.
companies. If we believe in what
In this regard, the Government’s role
business leaders like Intel Corporation’s
is clear. Federal mandates need to exist
Andy Grove said just over two years
and be enforced. To create the legal,
ago that: “in five years, a company
regulatory and business environment
will either be an Internet company –
that encourages private investment,
democratisation
of
92
Box Article
Democratising Technology:
2
Telekom Malaysia
as a
BRIDGE to the
digital divide
Dozens of projects, sponsored by
gover nments and by non-profit
organisations and supported by the
private sector, are under way to reverse
this trend. But the problem is too
big to be solved by them alone. To
build an all-encompassing
telecommunication infrastructure
significant amounts of capital
investments will be needed.
TELEKOM MALAYSIA IS REACHING
OUT TO THE MASSES
That goal may not be all that
impossible. The initiatives will rely on
the cellular and wireless technologies
because it is faster to deploy and far
less costly than the wire line versions.
The target population are often very
large and underserved, which helps
make up for the low per capita ability
to pay.
A solution that is now being offered
to allow telecommunications access
to remote Malaysian communities is
through the use of fixed access
wireless technologies. Since 1994,
Telekom Malaysia has deployed a
technology known as RiLL (Radio in
Local Loop) throughout Malaysia,
which offers voice telecommunication
services for those in rural and remote
areas. A newer technology known as
WiLL (Wireless in Local Loop) has
also been deployed since 1999
allowing access to even data
communication services, like the
Internet. Currently, the state-of-the-art
CDMA (Code Division Multiple Access)
technologies are deployed around
the country to allow those in remote
areas to have access to digital
telecommunication services.
Another potential solution is through
the use of no frills mobile services.
The key here is collaboration between
mobile operators and companies eager
to communicate with low-income
subscribers. Business information
providers, for instance, would probably
jump at the chance to sell price
forecasts to small-scale farmers, and
would likely pay operators for the
privilege.
Other emerging technologies with
potentials are digital satellite services,
xDSL, wireless LAN and Broadband
Fixed Wireless Access (BFWA).
In addition to developing physical
infrastructures, human capital and the
ample supply of knowledge workers
are also critical elements of the digital
economy. Telekom Malaysia has taken
important steps in addressing issues
of primary to tertiary education as
well as creating the right environment
to stimulate the development of human
capital.
Telekom Malaysia’s Smart School
project started in 1999 is now coming
into its third year. The project will
involve development of 90 schools into
fully fledged Smart Schools, which
will serve as a Connected Learning
Community. It will provide Individualised
and Continuous Learning, Learning
Anytime Any Place and Dynamic
Learning Environments; Home to
School Portals; and a comprehensive
and integrated School Management
System.
9,000 more schools throughout Malaysia
are expected to be incorporated into
the project. The Smart School project
has given invaluable experience to
Telekom Malaysia.
At the tertiary level, the private sector
is playing an important role equal to
that of the Gover nment. The
Multimedia University, for example, is
a wholly-owned subsidiary of and
fully funded by Telekom Malaysia.
With an approximate 12,000 student
population, MMU is playing a catalytic
role in rolling out the ICT workforce
required by the country.
93
Telekom Malaysia has also set up a
chain of training centres known as
Telekom Training Colleges in Kuala
Lumpur and other locations. These
centres have trained more than 24,000
students to date, including over 300
foreign students. The training colleges
offer more than 1,400 courses and
through these colleges, Telekom
Malaysia aims to produce k-economy
workers with the best ICT skills. The
colleges’ mission is to be learning
centres of excellence by developing
people to become the best in their
class.
The most challenging issues are still
those where high cost is required
to develop new human capital and
the effort in trying to retain them.
The number of institutions of higher
learning today is still inadequate to
meet requirements. At the same time,
Malaysia is experiencing a serious
brain-drain to more developed countries
that offer much more to attract specific
skill sets.
Council (NITC), plans are underway for Telekom Malaysia to set up broadband
and multimedia services and applications to be made accessible to everyone
in the Subang Jaya municipal council. This is an e-community showcase in
Malaysia.
BRIDGING THE DIGITAL DIVIDE THROUGH TECHNOLOGY
Dramatic progress has been gained through Telekom Malaysia’s past initiatives
in bridging the Digital Divide. Since 1992, fixed telephony service penetration
has grown from just over 11% to 19.8% today, and is forecast to reach 24%
by 2007 (Ovum, 2002). In fact, the number of Internet users will be more than
8.9 million by the year 2007, up from 3.5 million today (Ovum, 2002). Telekom
Malaysia has been the catalyst in and instrumental to this Internet growth by
providing more and more people access to the Internet through its TMnet
service. From its humble beginnings in 1996, TMnet has acquired more than
1.3 million Internet subscribers today. All these have contributed, and will
continue to contribute, towards the progress of the economy and country; shift
towards an ‘Information Economy’.
TMnet Subscribers
1,400,000
1996
1997
1998
1999
2000
2001
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
Another community level project is
the Subang Jaya 2005 initiative
(SJ2005). Here, in collaboration with
the National Information Technology
10
Internet Users
2001
2002
2003
2004
2005
2006
2007
8
Million
At the community level, Telekom
Malaysia has embarked on wideranging initiatives. With VSATs (Very
Small Aperture Terminal), Telekom
Malaysia has set up a pilot e-community
in the remote northeastern town of
Bario in Sarawak. This initiative, called
e-Bario, offers members of the Bario
community, voice, data and multimedia
services on par with modern cities
and other urban areas. More initiatives
like this are underway and will serve
as a model for the rest of the world.
6
4
2
0
Information technology, far from widening the digital divide, will someday
narrow it. When farmers can acquire the knowledge to improve crop yields,
and cottage industries can reliably sell goods to the highest potential buyer,
untapped human talent should start yielding significant returns.
Reaching Out, Staying Connected
You need to
communicate.
To tell stories. To give advice. To Seek help.
How we do it doesn’t matter.
telephone,
mobile to mobile or across the worldwideweb.
Be it through the
We will be there to make sure
your
message always gets through.
With absolute clarity.
Connecting you to
him, her and them.
That's what we're all about.
96
operations review
T E L E K O M
M A L A Y S I A
B E R H A D
Multimedia
Services
Baharum Salleh
TM Multimedia
Anuar Alias
ceo
Telekom Applied
Business Sdn. Bhd.
Shahruddin Sallehudin
ceo
Telekom Publications
Sdn. Bhd.
Haji Ir. Zakaria Husin
ceo
Telekom Technology
Sdn. Bhd.
97
Year 2001 provided a greater challenge to TM Multimedia as the global economy
experienced a downturn. Even so, TM Multimedia continued its growth
carrying on where it left in year 2000. By year-end, TM Multimedia recorded
a subscriber base of 1,271,038 for its TMnet services, reflecting a growth
of 48.5%. In addition, TM Multimedia also developed its online business
with the introduction of new services under the brand name of Netmyne.
This service serves as the key enabler for businesses especially to move
into e-commerce and the k-economy. While promoting access and online
services, TM Multimedia introduced yet another service known as
BlueHyppo.com. This new service is a lifestyle portal aggregating local
content for both narrowband and broadband.
The combination of access, online and content services has placed TM Multimedia in
the forefront of the value chain of multimedia services. As more customers
get online via the access service, the availability of applications and
content makes it more attractive for people to increase the Internet usage.
The tripartite synergy of its three major brands: TMnet for access, Netmyne
for online services and BlueHyppo.com for portal, TM Multimedia has
attained the market leader status for Internet-related services.
Year 2001 saw Netmyne expanding its services by creating yet another breakthrough
in web application services. This new service allows customers to interact
privately with others within a given group through a very affordable
package. This service complements the other services of Netmyne and
strives to bring customers to new heights in Internet usage.
Although 2001 was the year of the now famous dot-com fiasco, TM Multimedia
continued with its plan of having its very own portal. The portal business
would open up new revenue streams for TM Multimedia while at the same
time complementing its access business. Public acceptance was
tremendous when the portal, known as ‘Bluehyppo’ at www.bluehyppo.com
was averaging a hit rate of 32 million hits per month contributing to a 10%
increase in average revenue per user (ARPU) within 6 months of its
introduction. Not only did TM Multimedia make a breakthrough in providing
a multi-lingual portal providing content in Bahasa Malaysia, English and
Mandarin, it did even better by introducing broadband content when it
activated its broadband channel I-Choose.
Products and Services
| While maintaining focus on its core services, TM
Multimedia has begun its quest to bring the nation onto another plane of
Internet services with the introduction of new and exciting services in 2001.
Internet Service Provider (ISP) | TMnet is currently the leading brand for
Internet access services in Malaysia. It continues to serve a dial-up service
over PSTN (TMnet 1515) and ISDN (TMnet 1525) for the mass market.
Acting on market demand, TMnet introduced some new services namely,
TMnet Pre-paid and TMnet Streamyx. TMnet Pre-paid, launched in
September 2001 provides convenience and a hassle free Internet access
service with no monthly bills, targeted at students, travellers and budget
conscious users. TMnet Streamyx is the broadband Internet access service
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operations review
T E L E K O M
M A L A Y S I A
Multimedia Services
B E R H A D
targeted at users who demand high speed Internet connections. The service is made available to
individuals as well as to the business segment, complementing the normal service of digital dial-ups and
TMnet Direct. For business customers, the service was made available in April 2001 and for consumers
in September 2001.
TMnet Streamyx has attracted a high level of interest and this will be the precursor to the broadband drive in the
coming year. With this service, Internet users will be able to enjoy a different level of experience, that in
turn would cause a shift in the nature and usage of the Internet.
For corporate customers, TMnet Direct, a service using the managed leased networks began offering a new premium
value added service with a dedicated ISDN back-up. Another product is the TMnet EastGate,
a premium service for corporate users to provide shared connectivity over a dedicated service bandwidth.
Coupled with Netmyne, it provides a means for corporate users to migrate cost-efficiently into the Internet
space. In addition to the offering, TMnet EastGate is also in line with the Government’s effort to make
Malaysia an Internet hub through a planned effort of setting up an ASEAN Regional Internet Exchange;
an e-ASEAN endorsed project.
2001 also saw TMnet offering a version of the mobile Internet through a WAP service operated by TMTOUCH. While
the uptake had been slow initially, increasing acceptance now sees an opportunity for a higher breed of
mobile Internet services to be offered upon the rollout of GPRS services by TMTOUCH.
While catering to the local needs of customers, TMnet Global Roaming offers the customer access to the Internet
during their travels without having to open any Internet foreign account.
Commerce and Application Service Provider (CASP) | Netmyne, an online service, began by offering a
range of services from web hosting to server and commerce hosting. The services continued to attract
new customers who wanted to outsource the services to TM Multimedia. While consolidating its current
offering, Netmyne continued to explore new ways to make online services more attractive. The
introduction of the Netmyne WASP service was a breakthrough for web-based applications as it was a
prime mover in making online interactive collaboration possible. It also enabled customers to stream
videos through the Internet. The annual Thaipusam celebration and the XXI SEA Games were the key
events to be streamed live over the Internet.
The Netmyne WASP (Web Application Service Provider) introduced the ‘plug and play’ concept for applications
through the web. The service is targeted at a broad range of customers, in particular the business and
Small Office Home Office (SOHO) segments where collaboration is a key business activity.
99
In attracting specific market segments, Netmyne has embarked on an ingenious packaging of services like the NGO
package for non-governmental organisations, SpidyEd for students and the SMI package. Each package
varies in accordance with market demand. With Netmyne, the access service of TMnet stands to gain, by
being a complementary partner to it.
In catalysing the e-commerce initiative, Netmyne has developed payment mechanisms to cater for both the Business
to Consumer (B2C) and Business to Business (B2B) transactions through collaboration with strategic
partners. Payments can be made by individuals and corporations thus further diversifying the revenue
potential for Netmyne.
The expanding range of Netmyne services provides the nexus for diversification of the revenue matrix for TM
Multimedia, thus helping to position itself strongly in the Internet market and increasing the opportunities
for Telekom Malaysia to tap into this expanding market.
For customers, the service is available online through www.netmyne.com.my or a link from www.bluehyppo.com.
Portal | While building value offerings for the business segment, TM Multimedia has also developed a local portal
– Bluehyppo.com – with the aim of being the main local content and consumer application aggregator.
The portal leverages on the large subscription base of TMnet to kick-start its foray into the portal arena.
The key difference of the portal is its multi-lingual offering and multiple content offerings. This home grown portal
is available both in narrowband and broadband. The high level of hits achieved is testimony to market
acceptance of the portal.
The broadband content was first made public in September 2001, making it the first local portal with broadband
content. This effort was a result of Interactive Multimedia Services development in year 2000. This offering
is made available through the channel I-Choose on www.bluehyppo.com.
By developing the portal, TM Multimedia began its journey into making content as its new revenue earner. To date
earnings from revenue delivered indirectly through the increase in access revenue. With the strength
gained over the last 6 months of 2001, the portal is now able to initiate a new approach towards content
aggregation, very much seen to be successful in more mature markets.
The portal business complements and strengthens the potential revenue of the other services of TM Multimedia.
Customer Relationship Management (CRM) | In an environment of fierce competition, interacting with
customers is a very important facet of the business of TM Multimedia. In this respect, TM Multimedia has
developed a comprehensive CRM centre to handle its large and sophisticated customer base. The CRM
centre not only caters for the customers of TM Multimedia, but also provides a service to Telekom Smart
School, catering for the smart schools pilot project in the country.
Apart from receiving calls, the centre has also developed the capability to make outbound calls that will complement
the marketing efforts of TM Multimedia. This has resulted in better customer relations where customers
serve as the key initiator for improvement of services.
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operations review
T E L E K O M
M A L A Y S I A
Multimedia Services
B E R H A D
Broadband Market | The interplay between Netmyne, Bluehyppo and TMnet directs the focus of multimedia
towards broadband. While still very much in its infancy, TM Multimedia has strived to make the service
available to as wide a geographical area as possible. To date, it is available in four States, namely
Selangor, Melaka, Penang, Johor as well as Wilayah Persekutuan.
Targeted towards high end users of the Internet, TM Multimedia has also introduced an ‘always-on’ service for the
business segment through its TMnet Streamyx Business and TMnet Corporate packages. This new
offering reflects the positive approach taken by TM Multimedia in addressing customer needs.
Financial Operating Statement | For the financial year ending 31 December 2001, TM Multimedia recorded
an increase of 43.8% in revenue amounting to RM302.038 million with access (a value-added service for
PSTN) contributing 96.8%. The major contributor for ISP was TMnet Direct and dial-up services with the
broadband service growing rapidly in the last quarter.
Given the unfavourable economic climate of 2001, Netmyne and Bluehyppo have contributed to the revenue stream,
albeit minimally.
Operating Expenditure (OPEX) | The operating expenditure for 2001 stood at RM151.125 million as compared
to RM116.575 million in 2000, showing a growth of 29.6% as against a revenue growth of 41.1%. This
highlighted an increase in productivity with an increase in cost containment efforts. TM Multimedia has
improved its productivity summary level in 2001 as the ratio showed that each Ringgit of revenue
generated was complemented with RM0.51 of OPEX, compared to RM0.55 of OPEX incurred per Ringgit
of revenue generated in year 2000.
Consequently, TM Multimedia’s productivity has improved as its revenue per staff has shown an increase in 2001
to RM827,501.
Capital Expenditure (CAPEX) | Of the RM280 million annual CAPEX budget for 2001, RM180 million
representing 64.3% of CAPEX was spent. This was lower than the YTD performance of 74% against the
budget in 2000. However, TM Multimedia had a better performance for CAPEX spending in the second
half of 2001 compared to the first half.
Landmark Events | TM Multimedia’s 2001 calendar was marked by a series of momentous events, which had
significantly changed the outlook of the country’s Internet industry. Its position as a formidable Internet
Service Provider had given an impetus for TM Multimedia to push several new products and services into
the market. In keeping up with the growth of the ICT industry and the proliferation of Internet usage
globally, TM Multimedia has played a significant role in pioneering the introduction of several key Internet
enablers in the country.
101
As broadband was seen as a key enabler of a digital and multimedia future, TM Multimedia took the lead in rolling
out broadband-related services in April 2001, thus allowing more Malaysian businesses and households
to enjoy the benefits of broadband connectivity. TMnet Streamyx became the prime mover of broadband
services in the country reaching out to more than 33 sites nationwide, notably in key business areas and
major cities in the Klang Valley, Penang, Johor Bahru, Malacca and Ipoh.
In the area of Web Application Services (WASP), TM Multimedia through its Netmyne product had commercialised
WASP for the business market, which included the launch of the Exchange 2000 (E2K) solution, the
backbone of TM Multimedia’s Application Service Provider (ASP) offerings. Divided into three broad
categories, namely Office Online, E-Business and Enterprise Resource Planning, Netmyne’s WASP
solutions were introduced to meet the demand for quality IT resources and the rising popularity of ASP
solutions.
In conjunction with its fifth Anniversary, TM Multimedia unveiled the country’s first Internet prepaid cards. The
prepaid card was developed to provide convenient and instant access to the Net from any computer
terminal or location, thus sparing users the hassle of queuing for registration and payment of monthly bills
besides helping them to plan their spending for Internet usage. With attractive images of top celebrities
on the cards, TMnet’s prepaid cards will be a desirable purchase not only for Internet use but also as
collector’s items.
As a responsible corporate citizen, Telekom Malaysia through TM Multimedia has always been supportive of the
Government’s effort in creating a balanced development for the country. In showing its support for the
conservation of the environment, Telekom Malaysia through TM Multimedia had announced its
sponsorship for the upkeep and maintenance of four hippopotami brought in from Botswana, Africa and
placed at the Paya Indah Wetlands sanctuary in Dengkil. The announcement was made during the launch
of the Wetlands by the Prime Minister Dato Seri Dr. Mahathir Mohamad in October.
The adoption of the four hippos is reflective of Telekom Malaysia’s contribution in supporting the world’s wildlife and
the eco-systems. In addition, the hippo is also the mascot of its lifestyle portal – www.bluehyppo.com
TM Multimedia today is regarded as the key player in the development of Internet-related technology in the country.
Its position as the largest ISP has reserved TM Multimedia some important seats in several regulatory
bodies, among which is the Communications and Multimedia Forum. TM Multimedia played a leading role
in the formation of the Forum, a regulatory body formed to formulate and uphold the content code for
the Communications and Multimedia Industry of Malaysia.
With this mandate, TM Multimedia would be seen as the key enabler, to help steer ICT growth for the nation. To
date, TM Multimedia has successfully completed the Online Code for final endorsement by the Malaysian
Communication and Multimedia Commission (MCMC).
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Box Article
3
Broadband
opportunities in the
CONVERGING
market place
The past half-decade has seen a lot of talk revolving two topics namely: convergence and broadband. In
simple term, broadband means accessing the Internet at a higher bandwidth, preferably above 256kbps, as
opposed to the current level of 56kbps. Convergence takes place when the traditional media of publications,
broadcasting and voice are all delivered through a single platform. The Internet is presently touted as the
platform for convergence. Both convergence and broadband would eventually be integral to each other. The
critical questions to ask are:
• What are the opportunities for broadband in this convergence?
• What do we need to do to capitalise on these opportunities?
Although it has been much heralded
Meanwhile, convergence is steaming
(GPRS) and Third Generation Mobile
over the past few years, broadband
along at a steady pace. Mobile,
(3G) hold even bigger promise for
has in fact seen less-than-expected
which remains a high-growth area, is
mobile broadband and convergence
returns in most global markets. In the
gradually gravitating towards more
opportunities.
United States, for example, utilisation
and more data-related value added
of broadband networks is running at
services. Cellular companies are
While the Malaysian broadcast
between 5% and 35%. This trend
becoming more pragmatic in their
entertainment industry continues to
holds true in most of the developed
approach towards mobile data. For
remain in the doldrums of profitability
world. The situation in countries like
example, the more innovative SMS
and cash flows, innovative leaders
South Korea gave some indication
applications are proving much more
are starting to recognise the value of
why usage of broadband has, thus
effective (and lucrative) than past
converging technologies. Due to the
far, been below expectations. It is
initiatives such as Wireless Application
nature of broadcast content, this may
attributed to the lack of relevant
Protocol (WAP). Progressive services
well point towards multi-platform
content and applications which do not
such as Enhanced Messaging Services
broadband opportunities.
justify the cost of using broadband.
(EMS), Multimedia Messaging Services
(MMS), General Packet Radio Services
103
The global trend towards outsourcing
For most of the world, 75% of
It is anticipated that the demand for
more and more business support
broadband usage revolves around
broadband will differ in accordance
systems, and even the entire functions,
online interactive games, with the
with the customer segment. Consumer
also point towards greater opportunities,
remaining
on
needs vary greatly compared to that
for broadband. Indeed, some experts
entertainment related content and
of the corporate world. In breaking
say this trend may be a signal for the
applications. The main concern here
down the broadband market into its
eventual demise of existing Enterprise
is that the usage is too heavily skewed
component segments, we can identify
Resource Planning (ERP) system
towards one or two niche areas.
the types of benefits, activity and
25%
is
mainly
models, and eventual migration
usage that the segments demand.
towards Application Service Provider
In contrast, the usage patterns in
(ASP)-like models.
South Korea, which has a successful
Please see Figure 1 below.
broadband market, tell a different
In Figure 1, the phases described are
Meanwhile, major consumer appliance
story. While online games are still an
only relative within each segment.
manufacturers are preparing for
important activity, it is only half as
The Phase 2 for consumers may not
networked communities. Conceptualised
important as data retrieval, which
necessarily take place simultaneously
in the late 90’s, networked communities
makes up 42% of Korean broadband
as Phase 2 for corporate.
are not just about PC, phone and
usage. It is a clear signal that
mobile connectivity, but it also
customers may want more out of
In the context of convergence, Phase
involves the connectivity of home
broadband than just games and
2 would see the beginning of exciting
appliances. Over the long-term,
entertainment.
new broadband-related opportunities
realisation of even part of this ideal
and business in the converging fields,
may hold opportunities for the
while Phase 3 signifying the proliferation
“always-on services”.
WHAT DO PEOPLE WANT?
stage.
The key principle here is that people
are willing to pay for value. In the
THE BROADBAND CHALLENGE
broadband context, this value is
The availability of broadband provides
equivalent to answering the question:
the possibilities of accessing data at
“what can broadband do for me?”
a faster speed, interacting with speed,
communicating data easily with
minimal limitations and enjoying
interactive media with no interruptions.
These are some of the reasons for
the demand for broadband.
Segment
Demand
Phase 1
Demand
Phase 2
Demand
Phase 3
Consumer
Speed, availability
Substitution
Paid services
Always on
Business
solutions
Business
solutions
may in fact hold the answer to the
SME (Small
Medium
Enterprise)
greatest challenge facing broadband
Corporate
Speed,
connectivity
Vertical solutions
Integrated
solutions
The trends and uses of broadband
described above are interrelated, and
up-take, namely “relevant content”.
Figure 1: Segments of Broadband Market and Phased Demands
The key question is what content and
applications are of value to the
broadband end-users?
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Box Article
3
Broadband
opportunities in the
CONVERGING
market place
In Phase 2, consumers may want to
& advertising, financial services
way back in 1996, albeit only to
substitute traditional products and
content, video-conferencing, Virtual
corporate customers. Year 2001 was
services with broadband-enabled
Private Networks over the Internet
a watershed year for Telekom Malaysia
versions. Examples would be video-
(IP-VPNs) and business TV.
as it introduced to the market a
on-demand, video telephony, visual
broadband Internet service for the
monitoring applications and related
In Phase 3, consumers would move
masses. Known as TMnet Streamyx
services.
towards completely new applications,
the service was made available to the
delivered over multiple broadband
public in September 2001 with a
In the case of the Small Medium
platforms, including mobile and hybrid
minimum speed of 384 kpbs.
Enterprises (SMEs), the demand in
platforms such as IP over TV. SMEs
this phase would revolve around
would still largely be in the business
The service is being rolled out in
business solutions that would enable
solutions mode, albeit over multiple
phases both geographically and
them to expand market reach, improve
platforms. The corporate segment would
technologically. The latter is in relation
efficiency and save costs. This may
move to fully integrated enterprise
to the right technology adoption to
include Wide Area Network (WAN) or
solutions that improve effectiveness
ensure that services be made available
extranet supply chain solutions as well
of business process and minimise
at high speed.
as Business to Business (B2B) and
supply chain and internal costs.
Business to Consumer (B2C) platforms.
Multiple broadband platforms are
In order to boost content and
expected for this phase.
application relevance, Telekom Malaysia
The corporate demand in Phase 2
has made provison in a variety of
would centres around solutions that
ways. Broadband Internet users can
provide supply chain platforms to
TELEKOM MALAYSIA RISING TO
now access entertainment content
serve the entire industry segments.
THE CHALLENGE
via the Telekom Malaysia portal
These solutions are expected to be
With broadband still very much in its
BlueHyppo.com (www.bluehyppo.com).
highly interactive, as well as bandwidth
infancy in Malaysia, Telekom Malaysia
The content is not limited to
and storage hungry. Early adopters
can play the role key of the catalyst.
entertainment but also includes online
in this phase would likely come from
Technological
allow
games. To further increase the
broadcasting, financial services,
broadband to be delivered at lesser
experience of content over broadband
banking and the ICT industry. Solutions
cost, Telekom Malaysia had embarked
Internet, Telekom Malaysia has from
would include syndicated programming
on making broadband Internet available
time to time over the past year provided
advances
105
content through video streaming, such
For the long term, the Company
Though it may not be an easy task
as the Thaipusam and SEA Games
3.
will identify B2B and B2C
but taking on the broadband challenge
2001 coverage, best viewed with
broadband-dependent solutions.
successfully in a converging world
broadband Internet.
will see the realisation of what are
These broad steps are long term
now age-old ideals of what the future
Beyond content, Telekom Malaysia
strategies to stay ahead in the
community will be. Indeed, we may
also provides applications that are
broadband field over the long-term.
eventually see radical changes in the
best used with broadband Internet.
It is important to recognise that
way people work, learn, play and live,
Examples are web messaging, unified
each step described above must
which may be reflective of the way
messaging, online ordering and online
be broken down into smaller steps,
traditional telcos respond to the
procurement. Though it may be largely
thus maximising the chances for
market demands which focus on key
corporate centric, the coming year will
success and minimising risks.
growth sectors. All these may not be
see more consumer based applications
too far off in the foreseeable future.
being made available following the
In making the broadband foray
The operations of TM Multimedia
increase in the availability of broadband
meaningful, the positioning of partners
reflect the values of a new way of
Internet. Made available in March 2001,
within the traditional value-chain may
doing business for a company like
and as part of a suite of services known
not be good enough anymore. With
Telekom Malaysia.
as Netmyne (www.netmyne.com.my),
convergence becoming a reality, linear
Telekom Malaysia has extended the
value chains are essentially an obsolete
range of online services previously
notion, especially in the context of
offered to serve as the platform for
positioning broadband as an essential
convergence and provide an easy
platform in convergence. Instead, multi-
means for businesses to enter the
dimensional value webs would be
Internet world.
able to paint a more accurate picture
of where we and our partners, stand
While Telekom Malaysia strives to
in both domestic and global the
create a new experience on the
market place. This pre-determines the
Internet, year 2001 was very much a
outlook for serious players such as
year to understand and gauge the
TM Multimedia in the broadband
needs of customers in line with the
market, which introduced a new way
key principle of fostering customers
for Internet Access and new types of
relationship.
content
and
applications
best
deployed over broadband.
To further capitalise on the expected
demand, Telekom Malaysia will
Content and applications will need to
intensify efforts to:
be nurtured to develop a paradigm
1.
identify more broadband solutions
required by customers.
2.
shift amongst customers who need
broadband Internet solely for speed.
The experience curve of customers
It will also identify the solution
will not be logarithmic but instead will
partners to provide speedier
be gradual, reflecting the need for
solutions and to operate with
serious providers. This role fits
new business models deviating
Telekom Malaysia well, as it intends
away from traditional Telco based
to be in part, a catalyst and driver for
business models.
the realisation of the national
aspiration of becoming a K-economy.
106
subsidiaries
T E L E K O M
M A L A Y S I A
B E R H A D
telekom applied
business sdn. bhd.
TELEKOM APPLIED BUSINESS
SENDIRIAN BERHAD
Telekom Applied Business Sdn. Bhd. (TAB), an MSC status company, was incorporated in 1998. The Company
specialises in building Information and Communication Technology (ICT) solutions in the areas of
E-Solutions, Telecommunications Operating Support System (OSS) and Computer Telephony Integration (CTI).
TAB has been aggressively building its core competencies, which in return enables the company to develop several
world-class product portfolios. TAB’s products fall into 2 categories: TelCo OSS and Computer Telephony.
Products such as Eeze Phone System, Centrex Console, Virtual Messaging Service, Virtual Customer
Service, Virtual Group Service, and SMS Summons Checkpoint are some of the products effectively
developed under Computer Telephony Scopes. In the TelCo OSS category, TAB has already several
products in hand. Among them are the Integrated Payphone Management System (IPMS), Integrated
Customer Access Network Management System (ICANMS), Network Fault Management System (NFMS)
and Network Integrated Inventory Planning and Provisioning System (NIPS). In February 2001, Prism
Holdings Limited of South Africa (PRISM) has entered into a Joint Venture Agreement with Telekom
Malaysia (TM) to acquire 30 per cent of TM’s stake in TAB. The partnership with PRISM Ltd. enables TAB
to venture into new areas such as Smart Card and secured payment solutions.
Providing multi secured payment solutions to Telekom Technology Sdn. Bhd. (TTSB), another Telekom Malaysia
subsidiary, is TAB’s recent initiatives. With the transfer of technology from the South African company that
specialises in providing Secured Electronic Financial System, TAB has been able to provide solution in
Secured Electronic Financial Transaction, Smart Card, mobile commerce and other value added services.
The implementation of this system will eventually satisfy the multi-channel, multi-bank, and multi-service
107
operations. Eventually a beginning for the convenient cashless society will emerge where facility
applications such as transaction kiosk, bill payment, prepaid airtime or card payment services and
electronic wallet will be adopted.
TAB leverages on Telekom Malaysia to build several product portfolios and reference sites. The Company believes
that it is capable of creating and diversifying its own customer base. Through intensified and strategic
marketing plans, TAB aims to venture further into the local and global market. Products such as Eeze
Phone System and Virtual Communications Services have particular prospects in overseas markets. TAB
is looking seriously at any possible deployment of its products in developing countries such as Telekom
Malaysia's overseas subsidiaries.
Virtual Communications Services has been identified as the most innovative in-house developed product that
combines Public Switched Trunk Network (PSTN), mobile and Internet technologies by providing various
modes of connectivity. The services is expected to be an appealing application to greatly boost TM traffic.
Being the solution platform that converges these communication technologies, Virtual Communications
Services provide multi-services through shared resources and enhanced connectivity (call completion,
virtual services, SMS, e-mail, phone, fax, and fixed line SMS). These multi-services will add value to
Telekom Malaysia’s current services and boost the PSTN, Mobile, and Internet traffic while providing
convenience to users. A new product range, comprising Virtual Messaging, Virtual Group and Virtual
Customer Services has been developed on the platform. TAB’s latest initiative which utilise the solution
platform, is fixed line SMS, which is expected to be available for commercial rollout by the second quarter
of 2002.
TAB intends to develop and deploy more revenue streams in the areas of content aggregation and to stay ahead
in technology trends to deliver solutions that are of world-class quality and innovation.
In line with the Company’s business
objective to be a global ICT
player, exporting world-class
ICT solutions, TAB strives to
innovate and to turn great ideas
into products and solutions of
world-class quality to meet the
Malaysian and global ICT
demands.
Building information and communications
technology through telephony support systems
and computer telephony integration
108
subsidiaries
T E L E K O M
M A L A Y S I A
B E R H A D
T P S B
telekom
publications sdn. bhd.
Yellow Pages TM
Incorporated in August 1989, Telekom Publications Sdn. Bhd. (TPSB) is the official publisher of the Malaysian
Telephone Directories (White Pages and Yellow Pages) in both print and multimedia formats.
Cybermall Sdn. Bhd., incorporated on 1 January 2000 and with full MSC status, is a wholly owned subsidiary of
TPSB. Its objective is towards intensifying the pace of multimedia business and accelerating Malaysian
progress in the information age.
In all, TPSB produces 36 different directories covering products, businesses, telecommunication services and
equipment, fax and telex and tourism. The Malaysian Yellow Pages, TPSB’s core product, is a directional
medium based on classifications of products and services. The Malaysian White Pages contains
alphabetical listings which comprises two volumes segregating the residential and business segments.
Both Yellow Pages and White Pages are segmented into ten different regions covering Peninsular
Malaysia, Sabah and Sarawak. The Malaysian Chinese Yellow Pages, another directional medium, caters
for the Mandarin-speaking community. It covers two market segments, namely Peninsular Malaysia and
Sabah/Sarawak.
Niche directories are specialised in both content and target markets. For instance, the Malaysia Information Industry
Directory is industry specific, providing information on telecommunications, related services and
equipment, as well as Web and e-mail addresses. The Malaysia Tourist Pages focuses on tourism-related
information and a guide for the entire country.
The Neighbourhood Directory is an exclusive publication targeting a specific area thus offering businesses additional
opportunities to capture their local markets. Already introduced in two market segments in the Klang
Valley, the service will be expanded in accordance with demand.
The Malaysia Internet Yellow Pages (MIYP) will be upgraded to include searches for locations and directions within
major towns in Malaysia. MIYP was officially launched in October 2000, offering value added and chain
management services through its user friendly and interactive search engine. Users are now able to search
easily for information on companies, products and services, and telephone subscribers with just the click
of a mouse. Geographical Information System (GIS) Services offers assistance to domestic companies or
organisations in managing physical information such as locating their chain stores, branches, stations and
distribution points. GIS acts as an interface, allowing an organisation to acquire information, conduct
analyses and help provide effective business planning.
As a member of the Asian Directory Publishers Association Inc. (ADPAI), Telekom Publications Sdn. Bhd. has
embarked on cross-selling arrangements with all members of ADPAI. The company is actively involved in
cross-selling through the Yellow Pages of the Philippines, Indonesia, Brunei
and Myanmar.
TPSB entered into an agreement in early November 2001 with a locally registered
international directory solution provider for the new IDMS (Integrated
Directory Management Systems).
When completely in place by mid-2002, the IDMS will enable TPSB to better
satisfy directory users and consumers with quick, accurate and timely
directory information. Customers and advertisers will enjoy better
quality outputs and services. This comprehensive system, which
covers the whole value chain in the directory business, will help
TPSB to efficiently manage the increasing volume of database
and be in a better position to garner more opportunities in the
market.
109
Telekom Technology Sdn. Bhd.’s (TTSB) business philosophy is
to provide convenience and value-added services for
consumers and businesses.
telekom
technology sdn. bhd.
TTSB, a joint-venture company between Telekom Malaysia and
Prism Holdings Limited of South Africa, is the provider
of Eazyway services, which operate and manage a
secure network of electronic payment and transaction
services for e-commerce. In short, the Company
provides an array of convenient and cost-effective
information transaction switch services for e-payments,
providing the vital security necessary for the peace of
mind of both the customer and vendor. The Company
is attentive to its customers needs by providing
customer-oriented technology applications and extensive
reach.
TTSB offers an array of services – a bill collection and payment service, prepaid uploading, ticket purchase and
electronic bill payment and presentment. In accordance with its mission statement to provide convenience
via its customer-oriented technology applications, TTSB extends its services to the public through two
main distribution channels namely Eazyway Kiosk – a self-service kiosk that enables users to make
transactions without having to queue at service counters, and Eazyway Net – an additional channel for
users to settle bill payments or make other transactions via the Internet.
After the Internet, the next generation will be making use of Eazyway Agents, who are appointed merchants
providing eazyway services via Electronic Data Capture (EDC) or Point-of-Sale (POS) devices. The
Eazyway Agent provides extra convenience to users, allowing customers to carry out transactions for a
range of services at a variety of retail outlets. TTSB aims at providing better services to the public,
consumers and bill issuers as well as merchants.
Year 2001 marked the inaugural milestone for TTSB whereby it’s premier
product, namely the Bill Payment services via the Eazyway Kiosk was
launched to offer bill issuers an alternative way of collecting bills, while
at the same time, providing a value-added service to consumers with
a convenient method for bill payments.
Currently Telekom Malaysia’s fixed line, TMTOUCH and TMnet bills can be paid
via the Eazyway Kiosk. TTSB is looking at expanding the service to
allow other utility or municipality bills to be settled at Eazyway Kiosks
in the future. Users may conduct transactions by using local bank
cards (with MEPS Debit ePOS), Debit cards (Debit Maestro and Visa
Electron) as well as credit cards (Visa and Master). TTSB has
strategically positioned the Eazyway Kiosks at various locations in
phases, beginning with the Klang Valley. The success of the postlaunch period is an indication that TTSB is on its way to achieving its
goals. The Company is looking at receiving more bill issuers and
channel partners onboard.
Gearing itself towards achieving its number one goal of providing the public with
a one-stop service centre for multiple transactions, the Company will
be introducing more solutions and services for users. TTSB will help
to enhance the quality of life for the public and further promote the
use of e-commerce in Malaysia. The Company is confident in
forecasting significant growth in the future.
Our vision is a world
where everyone benefits
from the power of...
... communication.
Reaching Out, Across The Globe
We’re looking beyond our shores.
Lending a
helping hand where we can.
concept of
“prosper thy neighbour.”
subscribing to the
Connecting people in South Africa.
Introducing pre-paid mobile access to Cambodia.
Delivering the
Internet to Bangladesh.
Bringing GSM technology to Sri Lanka.
developed countries.
We’re building partnerships with emerging nations.
We’re operating in
We’re reaching out to the world.
We’re making a difference.
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operations review
T E L E K O M
M A L A Y S I A
B E R H A D
International
Operations
Nor Hizam Hashim
TM International
Dr. Hans
Wijayasuriya
Dato’ Hj. Ezanee
Abdul Aziz
chief executive officer/
managing director
managing director
chief executive officer/
managing director
TM International
(Bangladesh)
Limited
Bangladesh
Telekom
Networks
Malawi Limited
Malawi
MTN Networks
(PVT) Ltd.,
Sri Lanka
Md. Nasir Baharom
Hj. Marzuki
Abdullah
Somchai
Lertwisettheerakul
director general
chief executive officer
Sotelgui s.a.
Guinea
Cambodia Samart
Communications
Co. Ltd., Cambodia
chief executive officers or
Telekom Malaysia’s
representatives in affiliated
companies
Dato’ Abdul Malek
Mohamed
managing director
Ramlan Ahmad
Joe Rajaratnam
chief finance officer
head of training
Samart
Ghana
Corporation PLC.
Telecommunications Thailand
Co. Ltd., Ghana
Telkom SA
Limited
South Africa
113
TM International Sdn. Bhd. (TMI)
|
TMI, previously known as Telekom Malaysia International Sdn.
Bhd., is a wholly owned company of Telekom Malaysia. TMI’s core business mission is to manage TM’s
overseas investments and enhance shareholders’ value. In the past, international ventures obtained
administrative services from the International Venture Division of Telekom Malaysia. The primary intent of
the company will be on the effective management of strategic economic resources and management
processes toward the creation of shareholders’ value for the Group. TMI envisages a meaningful corporate
presence in the countries where the investments are made through significant contributions toward the
development of reliable and efficient telecommunication networks as well as sustaining effective management
of the telecommunication services in the host countries. As an investment holding company, TMI also
aims to provide strategic management support services to its overseas operations rendering valuable
assistance in generating desired net earnings from the investments consistent with their business plans.
A major focus for TMI in the year 2001 was to also ensure a successful migration of the International Venture
Division to the Company as provided by the Change Management programme. 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 were formed to
provide the required strategic support services for the overseas investments. TMI has its own Board of
Directors and a Management Committee has been formed to ensure sound operational management of
the company. As at the end of 2001, the migration processes were still in progress.
Performance and Operational Review
| Telekom Malaysia Group currently has investments in eight
countries namely South Africa, Malawi, Guinea, Ghana, Bangladesh, Sri Lanka, Thailand and Cambodia.
These investments are located in emerging markets with high potential for growth in the future. The main
thrusts of the international investments are in the cellular services including GSM 900, GSM 1800, data
networks and value added services. As at the end of the financial year ending 2001, Telekom Malaysia’s
offshore investments provided telecommunication services to a cumulative customer base in excess of 7
million subscribers.
The year under review constitutes a year of strategic consolidation of the company’s international or offshore
investments which resulted in strengthening the core businesses. The strategic consolidation allowed for
economic expansion of network and focused on key drivers of economic return from each investment.
As at the end of 2001, the net earnings from the international investments contributed approximately 8%
of the Group’s net profit after tax. It is anticipated that net earnings from offshore investments will provide
a significant contribution to the Group’s earnings in the near future.
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operations review
T E L E K O M
M A L A Y S I A
International Operations
B E R H A D
MTN Networks (PVT) Limited (MTN) | MTN which commenced operations in 1995, is a wholly owned
subsidiary of Telekom Malaysia. The Company has a licence to provide and operate GSM cellular services
on the 900 MHz frequency band until the year 2013. The cellular or mobile business in Sri Lanka is
subject to intense competition. Currently, MTN is the leader in the competitive market having a customer
base of 268,000 subscribers. In the year under review, the management continue to strengthen the
company’s competitive advantages by placing emphasis on product and service enhancement as well as
adopting effective marketing strategies in creating value for its customers. The continued improvement in
the performance of the company is attributed to mainly the increase in inbound roaming revenue, prepaid
revenue and ISP revenue. The Company will continue to invest in aggressive network expansion and new
product innovation programmes to position itself as the network of choice for cellular communications in
Sri Lanka.
TM International (Bangladesh) Limited (TMIB) | TMIB is a joint-venture company between AK Khan & Co.
Ltd. (a leading Bangladesh business group) and Telekom Malaysia. Telekom Malaysia holds a 70% equity
in TMIB. In October 1996, TMIB was granted a licence to develop and operate GSM cellular phone
services in Bangladesh and the Company commenced commercial operations in November 1997. The
licence is initially valid for 15 years and is renewable annually thereafter.
Since operations, the Company has adopted a conservative management approach by placing emphasis on
economic network expansion and the early generation of internal cash flow towards funding capital
investments.
In the year under review, the financial performance of TMIB has indicated a positive growth in comparison to the
previous financial year. This is mainly attributed to continued economic expansion of its cellular networks
which allowed the Company to gain customer reach and market depth. At the end of 2001, the Company
recorded a customer base in excess of 80,000 which was 7% higher than the targeted forecast. TMIB
will embark on an aggressive network expansion and significantly improve market share in order to
leverage greater value offered by a robust growth for cellular services in Bangladesh.
Telekom Networks Malawi Limited (TNM) | TNM is a joint-venture company between Telekom Malaysia and
the Malawi Telecommunications Ltd. (MTL). Telekom Malaysia holds an equity of 60% in TNM. The
Company was granted a 15 year licence to operate GSM cellular phone services in Malawi. The cellular
operation was launched on 15 December 1996.
115
TNM is currently the leading cellular company in Malawi enjoying a subscriber base exceeding 29,000 subscribers
of which 18,000 are prepaid customers. The management of TNM continued to enhance the marketing
capability of the Company as well as embarking on a programme of network expansion to meet the
growth in the demand for cellular services in Malawi. In the year 2001, the strengthening of the Malawi
Kwacha (the official currency for Malawi) also resulted in an exchange gain for TNM on its USD
denominated loans.
Societe Des Telecommunications De Guinee (Sotelgui s.a.) | Telekom Malaysia holds a 60% equity in
Sotelgui, the incumbent telephone company in Guinea, Africa. The remaining equity of 40% is held by the
Government of Guinea. Sotelgui, currently, is the sole provider of fixed line services in Guinea with a
subscriber base of 22,000. Sotelgui is also a leading company in the cellular business commanding 62%
of the market share with a subscriber base of 35,000.
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operations review
T E L E K O M
M A L A Y S I A
International Operations
B E R H A D
In the year under review, Sotelgui continued to improve management processes and business controls in its effort
to inculcate effective management practices in the Company. The Company is also embarking on an
expansion programme aimed at increasing telephone coverage which will provide a positive impact on the
performance of the company in the future.
Cambodia Samart Communications Co. Ltd. (CASACOM) | CASACOM commenced operations in 1999
and the Company has a 35 year licence to provide and operate GSM NMT 900 cellular services. Telekom
Malaysia holds a 51% equity in CASACOM whilst the remaining equity of 49% is held by SAMART. The
Company is currently the second largest cellular operator in Cambodia and commands a 28% share of
the market.
In the period under review, the financial performance of the Company was affected by a provision for asset
impairment. This resulted in the Company not realising the targeted net earning for the year 2001.
Ghana Telecommunications Company Limited (GT) | G-Com, a consortium led by Telekom Malaysia,
acquired a 30% equity in GT for USD 38 million in 1997 governed by a Stock Purchase and Sale
Agreement. The remaining equity of 70% in GT is held by the Government of Ghana. GT was granted a
licence to provide telephony services for 20 years. The licence stipulates specific installation and service
quality targets.
In the year under review, GT has realised most of the targets expressed in the licence and the management is
undertaking the necessary management action to increase the provision of telecommunication services in
Ghana. As at December 2001, the Company registered a customer base of 223,043 fixed line subscribers
and 45,000 cellular subscribers.
Samart Corporation Public Company Limited (SAMART) | SAMART is currently a public listed company
in Thailand having diversified businesses in providing value added telecommunication services,
manufacturing TV antennas and satellite dishes as well as distributing telecommunications equipment.
Telekom Malaysia has a 19.73% equity in SAMART.
In the year under review, SAMART undertook a Second Debt Restructuring Programme reducing its debt to a
sustainable level. As a result of the debt restructuring exercise and a favourable currency rate movement,
the Company recorded a turnaround in earnings. The management is currently taking appropriate
measures to improve the performances of underlying businesses in the Group.
117
Telkom SA Limited (TSA) | TSA is currently the largest international investment of Telekom Malaysia. In May
1997, TM and US-based South Western Bell Corp (SBC Communications Inc.) through Thintana
Communications Ltd. acquired a 30% stake in TSA. TSA was given a licence granting the company an
exclusive right to provide public switched telecommunication services (PSTS) for a period of 5 years. In
return for the period of exclusivity, TSA is required to meet stringent rollout and service obligations to
improve teledensity and accessibility in South Africa. To date, TSA has met or exceeded all line rollout
plans by embarking on extensive expansion and modernization programmes to realize service quality and
installation performance targets. The telecommunication system in South Africa is considered to be the
most developed and most modern in Africa. As at December 2001, TSA provided telecommunication
services to a subscriber base of 5 million customers.
TSA owns a 50% interest in VODACOM, South Africa’s leading cellular operator. In the year under review,
VODACOM provided cellular services to 5.6 million subscribers, 79% of whom are prepaid.
The management of TSA continued to undertake management initiatives to prepare the Company for competition
following the end of the exclusivity period. The company continues to invest capital in the expansion and
modernization of its network, enhance peoples’ skills and management processes as well as embarking
on new value added services in its effort to reinforce its industry position in the future.
Conclusion
|
In general, the year 2001 witnessed significant improvements in net earnings from Telekom
Malaysia’s international investments in comparison to the previous year. The net earnings contributed by
the offshore investments was RM79 million representing approximately 8% of the group’s net profit after
tax excluding the exceptional gain on disposal of DPC. In the year under review, Telekom Malaysia
disposed its investment in DPC (a cellular company in Thailand) for a price of USD 245 million resulting
in an exceptional gain of RM827.8 million for the Group. The management of TMI will continue to focus
on further unlocking latent shareholders’ value from current offshore investments and create additional
growth in value through the acquisition of selected investments with strong growth prospects.
We're in the business
of improving lives.
Namely yours.
Reaching Out, Touching Lives
Advancing your way of life. That’s what we’re all about.
We’re reaching out to every
To
Malaysian man, woman and child.
our people across the length and breadth of the nation.
Because they
power the country forward.
For without them, we would not be.
That’s why
people will always be our number one priority.
That is our solemn promise to the nation.
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operations review
T E L E K O M
M A L A Y S I A
B E R H A D
Facilities
Management
Datuk Ibrahim Md. Nassir
TM ServiceCo
chief executive officer of subsidiary
Shahidah Ridwan
ceo
Menara Kuala Lumpur Sdn. Bhd.
TM Facilities (formerly known as ServiceCo) consists of a group of Strategic Business Units (SBUs) that provide
‘non-core’ support services to Telekom Malaysia. The Company consists of five distinct business entities,
namely Malaysian Logistics, Fleet Management, Malaysian Security, Property Development and Property
Operations. Each of these business units has its own area of responsibilities and expertise. The SBU’s
primary goal is to provide quality and cost effective services to Telekom Malaysia, its main customer, and
to contribute to corporate profitability. Over the longer term, TM Facilities’s mission is to divest itself into
full-fledged individual business entities to further enhance shareholder value.
121
In year 2001, with the adoption of the new McKinsey Review report, ServiceCo’s preparatory efforts towards a full
subsidiary status moved into full swing, culminating in the establishment of ServiceCo as an Independent
Strategic Business Unit (ISBU) in November. The target was to launch ServiceCo as a subsidiary company
in January 2002 under a new name – TM Facilities Sdn. Bhd.
Malaysian Security
| The primary responsibility of Malaysian Security is to safeguard Telekom Malaysia’s
assets and personnel. The services include the provision of unarmed and armed guards particularly where
operations REVIEW
security threats and risks are high such as the business outlets. In addition to normal guard services,
other services include security audit services, investigation on fraud and theft and the development and
implementation of security awareness and preventive programs.
The main focus in 2001 was on managing the cost of security, particularly where outsourcing is involved. In order
to manage and minimize overheads, Malaysian Security will introduce electronic systems that can be
controlled and managed from a Central Monitoring station.
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operations review
T E L E K O M
M A L A Y S I A
Facilities Management
B E R H A D
Integrated support and
security systems at the
Corporate Headquarters
Malaysian Logistics
| The core business of Malaysian Logistics is the provision of logistics and related
services and solutions to Telekom Malaysia. This includes warehousing, materials handling, transportation
and distribution, freight forwarding management and scrap management and sales. The Company
currently operates 35 warehouses throughout Malaysia.
In addition to providing in-house logistics services, Malaysian Logistics also provides services to external customers,
thus contributing to cash revenue. Its strategic alliance with Shell Gas achieved success with the
commissioning of another Shell depot in Semambu (Kuantan). Talks are also underway to develop depots
in Kuching and Miri. Fruitful discussions have also been held with Petronas Gas, which has expressed
keen interest in our facilities, particularly in the northern region.
Malaysian Logistics is also in the final stages of offering document storage and retrieval services to other operating
units in Telekom Malaysia. It is envisaged that this service offering will eventually be a lucrative revenue
stream for Malaysian Logistics. Other initiatives that are in the initial stages of development include the
provisioning of e-fulfillment logistics.
Fleet Management
| The primary business of Fleet Management is to manage the Group’s fleet of vehicles,
including the purchase of new vehicles. The package includes the management of licences and permits,
maintenance and repair, inspection, insurance and claims. The focus in 2001 has been to improve the
quality and effectiveness of workshop services.
123
Fleet Management has been actively involved with Telekom Malaysia’s ‘Quick-Fix’
programme to enhance the Group’s image. As part of the programme,
a total of 2,090 vehicles, representing 30% of the Group’s fleet of
vehicles, have been repainted. This is an ongoing effort and in 2002,
more vehicles will be re-sprayed under the same programme.
Property Development
| As the name suggests, Property Development
is responsible for the development of Telekom Malaysia’s land assets.
A wide range of products and services are provided by Property
Development. These include landed property development for the Public
Switched Telephone Network (PSTN), Trunk and Junction Transmission
facilities (communication towers and carrier equipment buildings),
Internet Data Center facilities, Customer Center premises, high rise
office complexes and land development.
Year 2001 was a very exciting year for Property Development. Efforts were
focused on marketing the 22 storey Wisma Telekom Semarak at Jalan
Raja Muda Kuala Lumpur and Telekom Malaysia’s flagship, Menara
Telekom at Jalan Pantai Baru. Property Development has also been
responsible for managing the development of the Research &
Development complex in Cyberjaya.
Property Operations
| The primary purpose of Property Operations is to
provide facility management services to Telekom Malaysia. The unit
provides mechanical, civil, electrical, general engineering and building
maintenance services. Another unique service is estate management,
including the procurement of property and land for the Group’s use.
In 2002, Property Operations will continue to enhance and improve the service
level of its service offerings. Initial ‘teething’ problems that were encountered
with the introduction of its ‘One Stop’ customer service centers have
been minimized through its continuous quality improvement programmes.
TM Facilities has held events to mark the completion of the prestigious
RM572 million, 55 storey Menara Telekom office block in Jalan Pantai
Baru, Kuala Lumpur. The complex comprises 960,000 square feet of
office and commercial space available for let. Other launches were held
at the PSTN buildings in Permas Jaya and Skudai in Johor Baru.
In line with McKinsey’s recommendations, ServiceCo, including the strategic
business units, will be spun off as subsidiary companies in 2002/2003.
A migration taskforce has been formed to spearhead this transformation
and to ensure all key deliverables are delivered on time.
Our fleet of vehicles
124
subsidiaries
T E L E K O M
M A L A Y S I A
B E R H A D
menara
kuala lumpur
sdn. bhd.
A shining jewel on the capital city’s skyline, Menara Kuala Lumpur (MKL) was originally conceived in 1991 as a
solution to the need for improved quality telecommunications and broadcasting in the country. This
instantly recognisable piece of national heritage opened its doors to the public in October 1996. Within
just 5 years it has become one of the premier tourist attractions in Malaysia.
As the world’s fourth tallest telecommunications tower, Menara Kuala Lumpur continued to receive an encouraging
stream of visitors despite the decline in international tourist arrivals during the fourth quarter of the year.
It has successfully maintained its annual target of one million visitors each year by registering 1,022,680
visitors in 2001. MKL welcomed its five millionth visitor one month ahead of schedule in early September
2001.
Renowned for its exclusive panoramic views of the city and beyond, Menara Kuala Lumpur recorded an increase in
the number of international tourists in 2001. It has recorded an impresive increase of 31.5% over the 2000
figure, for a total of 530,000 international visitors in 2001 compared to 399,000 in year 2000. This is a
clear indication that international visitors have placed MKL as a must visit tourist attraction in Kuala
Lumpur.
The sustained high number of visitors have further strengthened Menara Kuala Lumpur’s strategy to position itself
as a preferred tourist destination amongst visitors from all facets of the social spectrum in both the
domestic and international markets. Every aspect of service and provision of facilities is under constant
scrutiny and review by a highly skilled workforce. Special attention is given to security by ensuring visitor
safety and convenience at all times.
Menara Kuala Lumpur also received a number of VIP visitors during the year. In March 2001, MKL played host to
a Royal Visit by the late Seri Paduka Baginda Yang di-Pertuan Agong Almarhum Sultan Salahuddin Abdul
Aziz Shah and Seri Paduka Baginda Raja Permaisuri Agong Tuanku Siti Aishah at the Launch of
TeleKanser by the Majlis Kanser Nasional (MAKNA). In October 2001, the tower received another
distinguished visitor namely T.Y.T. Yang di-Pertua Negeri Pulau Pinang Tun Dato’ Seri Haji Abdul Rahman
Haji Abbas who graciously officiated the Launch of Menara Kuala Lumpur’s new product “SCENE TO
BELIEVE”.
Menara Kuala Lumpur continued to embark on strategies to increase the number of domestic tourists by organising
various activities and promotions to encourage more Malaysians to visit this national landmark. 2001
witnessed several exciting highlights attracting much media coverage. The promotional efforts undertaken
encompassed extreme sporting activities, most notably the BASE Jump where jumpers, using parachutes,
executed their jumps from a height of 300 metres. This breathtaking event was held in conjunction with
the Federal Territory Day. MKL also organised a Tower Hunt from the tower to Menara Alor Setar in Kedah.
125
The reputable Kuala Lumpur International Towerthon, now in its fourth year, and
recognised as the world’s best and most lucrative tower run, has broadened
its scope of participation to include not only international professional
marathon and mountain runners, but also people from all walks of life. With
Telekom Malaysia as the Title Sponsor and the introduction of two new
stair runs, the event was renamed Telekom Malaysia International Towerthon
in 2001. In line with the Government’s call for national integration, this
international event was a platform to encourage participation of school
students in the JUNIOR TOWERTHON and other casual runners in the
CHARITY TOWERTHON. Menara Kuala Lumpur also organised a nationwide
roadshow to Alor Setar, Pulau Pinang, Ipoh, Petaling Jaya, Melaka, Seremban,
and Johor Bahru to create greater awareness amongst Malaysians and
encourage participation in the two new events.
In recognition of the fact that children have the ability to draw their parents and families
to Menara Kuala Lumpur, various exciting activities, especially targeted at
children were organised. These included a colouring and drawing contest,
Tower Camp, Tower Recycling Quest and a birthday celebration for the
Tower Kidz.
In the year under review, Menara Kuala Lumpur also supported tourism promotion
programmes organised by the Ministry of Culture, Arts and Tourism
(MOCAT) and the Tourism Council of Dewan Bandaraya Kuala Lumpur such
as the Merdeka Month celebration, Citrawarna Malaysia, Mega Sale
Carnival and Federal Territory Day celebration.
Menara Kuala Lumpur also played host to a series of monthly Cultural Performances,
the ‘Mari Beli Batik Malaysia’ campaign by Kraftangan Malaysia and the
Malaysian International Arts Festival organised by MOCAT.
With the tourism industry at the forefront of the nation’s economic growth, MOCAT
has called on all tourist spots to be innovative in enhancing services that
visitors experience while in Malaysia. With that in mind, Menara Kuala Lumpur
introduced the “SCENE TO BELIEVE” in early 2001. It is a digital photography
kiosk featuring a filmless photography system that captures images with a
high-resolution camera. These images are then instantly superimposed onto
specially created backgrounds. The introduction of this value-added service
at the tower has received very good response from visitors, to the extent
that it contributed to the increase in MKL’s revenue for year 2001.
The Mega View Banquet Deck which is MKL’s private function room situated at 288
metres, continues to be a popular venue for special closed door events
ranging from dinner and cocktail receptions, weddings, product launches
and press conferences, to Board Meetings with video conferencing facilities.
The sales turnover for the Mega View Banquet Deck in the year under
review had more than doubled compared to the year before. The tower will
continue to position the Mega View Banquet Deck as the preferred
exclusive private function venue in the city.
The introduction of “SCENE TO BELIEVE” and an increase in business at the Mega
View Banquet Deck had contributed positively towards the revenue growth
of Menara Kuala Lumpur, although revenue from sales of tickets to the
Observation Deck declined slightly in the period under review.
Social activities for staff of Menara Kuala Lumpur are organised every quarter of the
year and run in tandem with a continuous motivational curriculum named
“World Wellness Network”. It provides a well-balanced programme aimed
at developing the individual mentally, physically and spiritually. Through
these activities, the staff of MKL are engaged in various community and
charity projects such as visits to the Pediatrics Ward of HUKM-MAKNA and
Malaysian Association of the Blind, a Charity Car Wash and voluntary
chores or “gotong-royong” at a local orphanage.
With the dedication of committed staff, strong support from its business partners in
the tourism industry as well as its parent company (Telekom Malaysia) and
the endorsement of the Ministry of Culture, Arts and Tourism, Menara Kuala
Lumpur continues to chart a course to be positioned as the premier tourist
destination of choice in Malaysia.
Reaching Out, For Knowledge
present.
Our children are our future.
We are the
schools, colleges and universities.
We’re reaching out to connect parents, children and educators.
We’re reaching out to connect
With
care. With skill.
With
technology.
Smart School initiatives.
And our very own Multimedia University.
Through our
Helping our children reach out,
beyond tomorrow.
The education of
our children is our
social investment...
... for the future.
128
operations review
T E L E K O M
M A L A Y S I A
B E R H A D
Corporate
Centre
chief executive officers of subsidiaries and divisions
Prof. Ghauth Jasmon
Ahmad Tarmidi Mohamad
Haji Mustopha Ahmed
Ahmad Sobri Ismail
president
Universiti Telekom
Sdn. Bhd.
ceo
Telekom Research
& Development
Sdn. Bhd.
ceo
Telekom Smart
School Sdn. Bhd.
ceo
Telekom Training
College
The Corporate Centre, comprising of seven divisions, was created as part of the overall Telekom Malaysia
restructuring exercise undertaken in 2001 to respond to the ever increasing competitive environment.
Another objective of the exercise is to ensure that the various activities of the Operating Companies are
well coordinated and optimised in our effort to propel Telekom Malaysia towards becoming a next
generation communications company. The Divisions created under the Corporate Centre are Corporate
Strategy and Planning, Group Finance, Group Marketing, Corporate Regulatory, Group Human Resource
Management and Corporate Affairs.
Corporate Strategy and Planning
| Corporate Strategy and Planning (CSP) was established with the
key responsibility to provide strategic direction to the Group while promoting the advancement of Telekom
Malaysia’s business policies and plans, governed under the following specific roles:
• Group strategic controller
• Development of corporate strategies, masterplans and blueprints
• Mergers, acquisitions, investment and corporate development
• Strategic management control
• Group business planning
129
Against the backdrop of increasing globalisation, the entry of additional local and overseas players and other key
micro-environmental trends, CSP has embarked on a long-term framework that will provide strategic focus
and direction for the Group. This process is expected to create the momentum for ongoing incremental
improvements to all aspects of Telekom Malaysia’s business.
The Division also provides strategic fit between customers, strategy, business culture and leadership with intention
to create and maintain competitive advantage to Telekom Malaysia. Based on the identified strategic
imperatives to the Group, the CSP division will continue to address the following short-term and longterm agendas:
Short-Term Agenda
• Develop or adjust detailed strategy development and consolidation processes.
• Support independent companies in establishing strategy functions.
• Support the Key Performance Indicators setting process and define the performance monitoring
processes.
Long-Term Agenda
• Increase shareholders’ value by focused strategy development and executive support.
• Clarify and streamline strategy of growth businesses i.e. Multimedia and Mobile.
• Establish effective performance evaluation and corrective action initiation.
• Develop consistent and value added business portfolio management.
Group Marketing
| The strategic role of Group Marketing is to establish clear marketing direction, strategies
and policies for the Group. It is also charged with the responsibility to upgrade the overall marketing
talents for Telekom Malaysia that will enable it to defend and strengthen its leadership position in a
competitive market environment.
The functions include building strong brands that will become the first choice for the customers by marketing
products that have clear differentiated benefits and supported by outstanding customer service. To
achieve this, Telekom Malaysia has intensified initiatives to significantly improve its understanding of its
consumers and their needs so that the Company’s resources and focus can be directed at satisfying these
needs better than its competitors. The advertising and promotion approaches have been improved to
target the right consumer groups and key unique selling points are communicated effectively. Parallel
action has been taken to further enhance sales capabilities. The support services have been geared
towards delivering outstanding services, so that customers’ experiences with Telekom Malaysia will be
very pleasant and memorable.
Corporate Regulatory
| The strategic role of Corporate Regulatory is to dynamically lead and direct the
Company to respond pre-emptively to regulatory challenges. The Division is also responsible for seeking
development opportunities that would maximise returns to the Company while mitigating the adverse
regulatory risk in the short, medium and long term that may threaten the Company’s business. The key
factors likely to impact the Company include changes to the prevailing Malaysian Laws, licensing
conditions, competition rules, interconnection, universal service obligations and tariffs.
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operations review
T E L E K O M
M A L A Y S I A
Corporate Centre
B E R H A D
In playing its strategic role, Corporate Regulatory would integrate the diverse regulatory responses of the Operating
Companies into a coherent unified position that meets the strategic interests of the Group. This involves
the following key initiatives:
• Collaborate and consult the technical, marketing, finance and legal functions of the Operating
Companies and Corporate Groups in evaluating national industry reforms and strategise prompt
responses to the regulatory body.
• Provide information and create awareness to key management personnel on regulatory developments,
regulatory risk and compliance that may impact Telekom Malaysia’s core and ancillary businesses.
• Conduct research and tracking of the evolving national and international industry environment as a
basis to guide Operating Companies in the development of strategies to minimize medium and long
term regulatory risks and to remain competitive.
• Provide and maintain an effective communication channel with the regulatory authorities and the
Ministry, as a platform to present the Company’s perspective on regulatory issues.
Group Human Resource Management
| The role of the Group Human Resource Management is to
formulate and establish effective human resource strategies, policies and practices across Telekom
Malaysia Group to be in line with the Company’s business plans and direction.
The functions include the development of policies and strategies in organisation structure, manpower planning,
compensation, human resource development, talent management, performance & consequence
management, employee relations and industrial relations for the Group.
Group Human Resource is also responsible for formulating policies and guidelines relating to human resource to
facilitate the establishment of independent companies or subsidiaries by Telekom Malaysia. It also acts as
a consultant to the Operating Companies towards developing their own human resource strategies,
policies and practices to meet their respective business needs.
Corporate Affairs
| A respected and professional image and reputation is a vital cog in any company’s
success. Telekom Malaysia needs to personify this professional image and reputation. In this respect, the
Corporate Affairs Division plays a strategic and critical role in building, enhancing and protecting the
corporate image and reputation of Telekom Malaysia. This is achieved by aligning the public relations,
media relations, as well as event management function of Telekom Malaysia’s Group and its subsidiaries
to a prescribed standard with a view to uphold a positive corporate image via-a-vis its employees,
shareholders, customers, the government, the public and the media. Corporate Affairs plays the crucial
role of projecting a favourable public face of the Company more so when Telekom Malaysia is the leading
communication services provider and a premier public listed company.
There is a constant need to project, uphold and strengthen the positive corporate image of Telekom Malaysia as a
customer-oriented and customer friendly Company committed to providing total customer satisfaction, and
to continuously enhance its role as a leading, dynamic, yet caring corporate citizen.
131
In this regard, the Corporate Affairs Division plays the strategic roles of:
• Strategising and managing Telekom Malaysia’s communications and public relations programme and
activities with the objective of upholding and enhancing its positive corporate image with stakeholders
and the public.
• Strategising, managing and building media relations in order to strengthen the existing positive and
friendly rapport between the Company and the media.
• Providing strategic guidance to Telekom Malaysia’s sponsorship programmes with the objective of
projecting the Company as a responsible corporate citizen committed to fulfilling its responsibilities in
support of the nation’s aspirations and social obligations.
• Overseeing the conceptualisation, planning and proper execution of the Company’s events in order to
derive positive publicity and commercial mileage.
• Interfacing with the customers to help resolve their complaints and problems relating to the Company’s
products and services.
Group Finance
| Group Finance’s strategic role involves the creation and maximisation of shareholders’ value
through the formulation and implementation of prudent financial policies, procedures and processes in
accordance with the Company’s strategic direction.
Group Finance is directly responsible in the setting-up of the Group’s strategic financial targets and directions and
to support all Operating Companies and Subsidiaries of Telekom Malaysia in achieving their strategic
direction.
The key responsibilities of Group Finance includes the following:
• Provide financial advice/input for all key management decisions and assist in developing corporate
goals, strategies and plans in achieving objectives that result in maximizing shareholders’ value.
• Direct and implement financial and accounting systems, policies and procedures that contribute to
good commercial management of the Company’s business.
• Direct and implement financial processes (tax management, accounting, risk management, corporate
finance management, financial administration, debtor management, billing etc) that will contribute to
maintaining good cash flows and returns as well as ensure timely and accurate reporting and
measurement of the Company’s operations.
• Direct, control and co-ordinate the development of an effective management and financial information
system to provide effective managerial decision support.
• Represent the company in negotiations and liaison with government authorities and financial institutions.
• Ensure compliance with stock exchange disclosure requirements.
• Direct and control timely production of audited annual accounts and maintain liaison with external
auditors as well as direct effective management of investor relations.
• Ensure prudent development and management of the Company’s international investments as well as
subsidiaries through value based management in maximizing the Group’s value to shareholders.
• Develop and direct strong internal controls (business controls) in the Company and ensure practice of
good corporate governance.
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subsidiaries
T E L E K O M
M A L A Y S I A
B E R H A D
universiti
telekom sdn. bhd.
Universiti Telekom Sdn. Bhd. was incorporated in June 1997 to manage Multimedia 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. Both campuses are now known as Multimedia University.
Envisioned to be a world class university, MMU, being the first government approved private university in Malaysia,
has since achieved significant milestones. It is particularly proud of its close relations with various key
industry players, high quality research activities, ultra modern laboratories and instruction facilities,
innovative teaching techniques and its active role in supporting the Multimedia Super Corridor (MSC).
MMU offers more than 70 academic programmes in various IT and Multimedia related courses at the Diploma,
Bachelor, Masters and Doctorate levels. The Cyberjaya Campus of MMU houses the Faculty of Creative
Multimedia, Faculty of Engineering, Faculty of Management and Faculty of Information Technology,
designed to produce a highly skilled workforce necessary to serve the MSC and the global community in
the information and knowledge age. The campus was officially launched by the Prime Minister of Malaysia
on 9 July 1999. It currently has a student population in excess of 6,000.
The Melaka campus houses the Centre for Foundation Studies and Extension Education and three faculties namely
the Faculty of Information Science and Technology, Faculty of Engineering and Technology and the Faculty
of Business and Law. It is currently catering for some 6,000 undergraduate and postgraduate students.
Year 2001 recorded a strong growth in the University’s student population increasing from 9,000 in year 2000 to
more than 12,000 in year 2001. With this increase, the 12,000 students population targeted for year 2003
was met in 2001. There are some 500 academics staff serving the University. Of the current population,
about 700 are postgraduate students at Masters and Doctorate levels, out of which 300 are foreign
students from 36 countries.
The university recorded a revenue growth of RM19 million or 22% in 2001 against that of year 2000. This increase
is attributed to several initiatives taken by the University such as offering short courses, professional
consultancy to industries and external collaboration programmes.
In addition to new sources of income, the University continues its policy of prudent expenditure. Year 2001
witnessed a moderate increase in expenditure amounting to RM13.67 million or 21.49% compared to that
of year 2000. The University had registered net profits for the financial year in 2000 and 2001, three years
after it commenced operations.
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MMU celebrated a new batch of graduates in its second convocation held
on 10 February 2001. In all, one Ph.D. student, 59 Masters and
434 Bachelors graduates from the Faculty of Engineering, Faculty
of Information Technology, Faculty of Creative Multimedia and
Faculty of Management were conferred degrees by the Chancellor,
Y.A.Bhg. Dato’ Seri Dr. Siti Hasmah Haji Mohd Ali.
In its effort to become a world class institution, the university places great
emphasis on active collaboration in research and development
with key global players. In April 2001, MMU sealed an agreement
with Matsushita Electric Industrial Co. Ltd., of Japan which
provides for a Visiting Lecturer Programme sponsored by
Matsushita. It will be conducted over a period of five years and
includes an allocation for the setting up of a Matsushita
Laboratory in MMU. Matsushita will collaborate with MMU
academic members on several R&D projects for a period of five
years. In April, MMU and Alcatel jointly launched the Alcatel
Multimedia Laboratory, which further enhance the collaboration
between the two organisations. The company awarded Alcatel
scholarships to six MMU students during the ceremony.
MMU graduands – leading the way
towards an Informed Society
Other exciting highlights were the signing of a Memorandum of Understanding
(MoU) with BTexact Technologies to explore, develop and promote
learning and extensive research for undergraduate and postgraduate students. Multimedia University, in a joint collaboration
with the Japan International Cooperation Agency (JICA) also
signed an agreement for the establishment of the first satellitebased tele-education system in Malaysia. With this system, six
sites will be connected via satellite which would enable
academic programmes to be offered to a wider spectrum of the
local populace. The RM100,000 MSC Endowment Fund will be
used for scholarship purposes.
MMU once again successfully hosted the Multimedia University International
Symposium on Information and Communications 2001, better
known as M2USIC’2001. The 2001 symposium, themed “Bridging
the Digital Divide” was held from 16 to 18 October 2001. It was
co-organised by the ATM Forum and jointly sponsored by Telekom
Malaysia, NTT Communications, Alcatel, IBM, National Panasonic
and Microsoft. The symposium provides a platform for R&D activities
and a forum for discussion and intellectual exchange among
academics, leading technologists and engineers on multimedia
technology in the Asia Pacific region.
Many awards were won by staff of the University in recognition of excellence
in R&D and innovation. At the institution level, the most significant
was the Asia-Pacific ICT Award for the best in Smart Learning
Systems.
Diversity in Education at MMU
134
subsidiaries
T E L E K O M
M A L A Y S I A
B E R H A D
telekom research &
development sdn. bhd.
Telekom Research & Development Sdn. Bhd.
| TM R&D was established in January 2001 as a
fully owned subsidiary of Telekom Malaysia with the objective of providing the technology impetus for
Telekom Malaysia to become a world class and multiservice company. It became fully operational in July
the same year. TM R&D aspires to be a leading provider of innovative products and services in the
information and communications industry. It has geared itself towards becoming a leading R&D company
by functioning as a reference centre, providing product-oriented research work and quality services that
exceed the expectation of customers and shareholders. In line with the objective of its establishment, TM
R&D will be at the forefront of its business activities, delivering products and services which will contribute
significantly towards generating new revenue streams for Telekom Malaysia as the Company forges ahead
in data services, network and infrastructure development, multimedia and cellular services.
Intellectual Property Rights
| New technologies are invaluable assets to an organisation and hence need
to be given due protection as Intellectual Property Rights.
In this regard, the Company has set up “TM Intellectual Property” policies, procedures and processes designed to
manage its intellectual assets, covering patent, copyright, trademark and industrial design.
R&D
135
In year 2001, TM R&D has submitted applications for Intellectual Property Rights registrations for its products
namely, patent (24), copyright (8), trademark (6) and industrial design (2). These applications are at various
stages of processing. Some examples of proposals for patents, trademarks and copyrights currently
pending are projects on “Surge Arrestor”, “Alarm Display Panel”, “Smartcard System”, and “Mobile
Forecasting Software”.
Joint Research Collaboration
| TM R&D has also established joint research collaboration programmes
with various domestic and international universities and other research institutions and organisations
through MOUs and collaboration agreements.
A joint research collaboration with University Malaya has resulted in the establishment of the TM-UM Photonic
Research Centre Unit, which is one of the best equipped photonic labs in the country.
As a result of our research collaboration with Universiti Kebangsaan Malaysia, the TM-UKM Micro Electronic
Research Centre was established.
Research collaborations have also been established with other universities namely, Universiti Sains Malaysia,
Universiti Teknologi Malaysia, Universiti Putra Malaysia and the Royal Melbourne Institute of Technology,
Australia.
In addition to research collaborations, TM R&D has also signed several research oriented MoUs for example
The Royal Malaysian Navy, the Australian Telecommunication Consultation & Training and Excelpoint
Systems (Pte) Ltd.
We expect many more patents, trademarks, etc to emerge as a result of these collaborative efforts which will further
propel us towards achieving and being recognised for research excellence.
136
subsidiaries
T E L E K O M
M A L A Y S I A
B E R H A D
telekom smart school
sdn. bhd.
Introduction
| Technology advances are revolutionising the world’s education and Malaysia is not spared the
impact of this development. The Malaysian Government, via the Ministry of Education, has developed the
Malaysian Smart School Concept for the country’s future education based on the direction to move
Malaysians into the Information Age. Its value was recognised and it became one of the seven MSC
flagship applications.
Reinventing the Malaysian education system will have to begin with systemic change at all levels. This complex
metamorphosis will encompass policies, teaching-learning practices, management, faculty, parents and
community while preparing our future generation for the challenging Information Age. Hence, the Smart
School concept will form the veritable base which will help develop independent thinking Malaysians of
the future – a brand new generation that utilizes the profound strength of the mind to produce coveted
achievements for the nation.
A Smart School student is a student for life, a person who constantly seek to improve himself or herself. These are
the students who will be living, working and leading Malaysia into the Information Age by the year 2020.
Profile
| Since the commencement of its operations in 1999, Telekom Smart School Sdn. Bhd. (TSS) has been
entrusted with the challenging project of transforming the Malaysian education system into a highly
advanced technology-based process that will revolutionise the way the students learn, think and act.
Together with the support of seven local partners and three multinationals, TSS is pooling the Company’s
resources towards ensuring the success of the Malaysian Smart School Pilot Project. Its primary mission
is to develop and implement a Pilot Project involving 90 Smart Schools nationwide. Based on the Smart
School Conceptual Blueprint, by year 2010, all the 10,000 Malaysia’s primary and secondary schools will
eventually become Smart Schools.
TSS is currently actively preparing itself for the next phase of the Smart School Project and is pursuing with the
Government on the rollout plans. The rollout is expected to commence upon completion of the Pilot
Project although the actual plan rests entirely with the Government.
Smart School –
Malaysia’s vision for
education
137
Smart School –
New technologies, new concepts,
new thinking in education
Products & Services
| Envisioned to be Malaysia’s foremost Multimedia Education Solutions Provider, TSS
offers a wide range of services specific to its expertise in reinventing education. From the knowledge and
experience gained from the pilot project, TSS has subsequently developed and is concurrently enhancing
its products and services offering encompassing the Smart School Solution and beyond. The Smart
School solution can be repackaged and marketed to secondary target markets ranging from private
institutions, community and the government/private sector as well as to other countries having similar
requirements.
Backed by a team of skilled IT professionals, TSS also provides Consultancy, Project Management, Technology
Infrastructure Management, Systems Management, Operations Management and Change Management
Services.
At the same time, the Company is actively repackaging the existing Smart School products in the form of standalone CDs branded as “BestariEd Multimedia Education Series” to be marketed throughout the country.
The Management expects the BestariEd Multimedia Education Series to be ready by May 2002. With this,
the Company will see the introduction of new revenue streams after the Pilot Project. TSS is also offering
the TSS Smart Education Training Programme, a comprehensive multi-delivery training programme that will
enable, enrich and enhance the teacher’s ability and confidence to integrate Information and
Communication Technology (ICT) into teaching and learning.
Event Highlights
| Numerous community initiatives were initiated by TSS. Among the most significant was
the launch of Jejak Siber 2001 competition for secondary and primary schools in the Federal Territory of
Kuala Lumpur. Jejak Siber was designed to cultivate creativity amongst students and to encourage
appreciation and the usage of IT through research. The initiative, which is into its second year, also hopes
to encourage childrens’ natural inquisitiveness and the spirit of teamwork. Eighty schools within Kuala
Lumpur participated in this annual event. TSS is planning to embark on a nationwide Jejak Siber
competition in 2002.
In September 2001, TSS introduced getCyberEd.com, an educational portal that encompasses comprehensive
educational processes. From reference materials to online discussions, multimedia guides, resource center,
community tools to e-commerce, getCyberEd.com complements the Smart School initiatives and is the
ultimate educational portal for students, parents, educators and related business corporations.
On the international front, the Company has actively participated in major international exhibitions in close
collaboration with the Multimedia Development Corporation (MDC). Among the exhibitions TSS
participated in 2001, were the annual MSC IAP expo held in Kuala Lumpur, the South East Asia Minister
of Education Organisation (SEAMEO) meetings and expo in Bangkok and Jakarta. It is hoped that these
exhibitions will open new business opportunities for the Company especially in international markets.
138
telekom
training
college
Background
| Telekom Training College (TTC) was established in 1948 with the primary objective of
providing staff training for the then Jabatan Telekom. In 1966, Telekom Training College moved
from its premises at Jalan Ipoh to its present premises in Jalan Gurney. In 1980, five branch
campuses of TTC were established to cover all regions of the country. A branch campus was
established in Taiping to cover the Northern Region, in Melaka to cover the Southern Region, in
Kuala Terengganu to cover the Eastern Region, in Kuching, Sarawak and in Kota Kinabalu,
Sabah. The driving vision of TTC to be a centre of educational excellence has led to the
establishment of five learning Schools, namely the School of Telecommunications, School of
Multimedia, School of Information Technology, School of Business Management and the
‘Management & Leadership’ Institute. Currently, TTC has a staff strength of 394 personnel out
of whom 130 are at the Executive level.
Products & Services
Training | As an organisation whose main responsibility is to provide training services at various staff
levels for staff of Telekom Malaysia and its subsidiaries, Telekom Training College conducted
2,309 courses for over 42,257 trainees in year 2001. Besides providing training for employees
of the Group, TTC also offers its courses to external parties such as its suppliers, contractors,
armed forces and police personnel as well as other corporate customers. In year 2001, TTC
posted a 19% increase in trainee attendance as well as a 7% increase in the number of courses
conducted over the preceding year.
TTC also offers specialised training programmes for selected staff as well as for Top Management of the
company through its Management Leadership Institute.
Educational Programmes | TTC has also ventured ahead into the education arena by offering several
programmes in conjunction with several leading local and overseas institutions. In Year 2000,
TTC was accorded the status as an Institusi Pendidikan Tinggi Swasta (IPTS).
The following are the academic programmes currently offered at TTC:
• Diploma in Multimedia Technology - UNIMAS
• Diploma in Multimedia (Business Computing) - UNIMAS
• Diploma in Electrical Engineering (Information Technology) - UTM
• Diploma in Computer Science (Information Technology) - UTM
• Diploma in Technology (Telecommunications Engineering) - MMU
• Diploma in Marketing & Strategic Management - The Open Polytechnics of New Zealand
(TOPNZ)
From these programmes so far, TTC has passed out 331 graduates in 2001. There are currently 352
students pursuing the various programmes mentioned above.
139
Assessment Centre | An assessment centre has been set-up at TTC to aid in the
Group’s Human Resource Development effort. This assessment centre is used to
assess and monitor Telekom Malaysia’s employees’ skill and competency levels so
that they are in line with the company, industry and nation-building needs.
‘E-Learning’ | In line with the Multimedia era that is currently gaining ground in Malaysia,
TTC has introduced several 'e-learning' programmes. These programmes are
conducted and administered via the use of several modes of technology such as:
•
Campus Administration System
•
Digital Library
•
Video-Conferencing
•
The Learning Manager System
Programmes that are currently offered via the 'e-learning' mode are Information Technology
courses, Desktop Computing, Management, Technical and Telecommunication
courses.
Other Services & Activities | In addition to providing training and educational
programmes, TTC offers the use of its extensive and well equipped physical
facilities for a fee to anyone wanting to use them. TTC offers classrooms equipped
with the latest audio-visual aids, hostel facilities, a modern and well equipped hall
to hold seminars and conventions, air-conditioned dining facilities, catering
facilities, library and sports facilities as well as a mosque.
TTC also carries out various community and welfare related activities every year such as
organising educational and learning camps for school children during school
holidays as well as contributions to welfare and orphanage homes.
140
regional heads
T E L E K O M
M A L A Y S I A
B E R H A D
PENANG
NEGERI SEMBILAN
Dato’ Sharif Zaimi
Abu Hashim
General Manager
Business Operations
Sales Outlet
• Jalan Burmah • Bayan Baru
• Butterworth • Bukit Mertajam
• Sungai Bakap
• Lebuh Downing
Mohd Ali Nordin
General Manager
Business Operations
General Manager
Business Operations
Sales Outlet
• Seremban • Port Dickson
• Kuala Pilah • Tampin
Primatel Business Centre
• Seremban
• Jalan Burmah
Sales Outlet
• Ipoh • Tasek • Kampar
• Batu Gajah • Taiping
• Parit Buntar • Sungai Siput
• Grik • Kuala Kangsar • Tapah
• Sitiawan • Tanjong Malim
• Teluk Intan
PAHANG
Zulkiffli Abdul Aziz
• Ipoh
Mahzan Moin
General Manager
Business Operations
Sales Outlet
• Alor Setar • Jitra • Langkawi
• Kangar • Sungai Petani
• Kulim
MELAKA
Wan Danial
Wan Ibrahim
KELANTAN
• Alor Setar
PERAK
General Manager
Business Operations
Sales Outlet
• Kuantan • Bentong
• Kuala Lipis • Raub
• Mentakab
Salmah Mohd Taufek
Ahmad Zakaria
General Manager
Business Operations
General Manager
Business Operations
Sales Outlet
• Melaka • Alor Gajah
• Bangunan Peringgit Point,
Melaka
KEDAH/PERLIS
Sales Outlet
• Kota Bharu • Pasir Mas
• Tanah Merah • Kuala Krai
• Pasir Puteh
regional
141
Datuk Haji Mohd
Taib Hassan
General Manager
Business Operations
Sales Outlet
• Setapak • Ampang • Kepong
• Rawang • Shah Alam
• Banting • Sabak Bernam
• Bukit Raja • Kuala Selangor
• Kuala Kubu Baru • Damansara
Utama • Petaling Jaya
• Subang Jaya • Kajang
• Wisma Telekom Shah Alam
• Menara PKNS, Petaling Jaya
SELANGOR
Abd Razak Abu
Samah
General Manager
Business Operations
Tengku Abdul
Rahman Tengku
Ngah
General Manager
Business Operations
Sales Outlet
• Batu Pahat • Yong Peng
• Muar • Kluang • Mersing
• Segamat • Johor Bahru
• Pelangi • Skudai
• Pasir Gudang • Kota Tinggi
• Pontian • Kulai
JOHOR
KUALA LUMPUR
Sales Outlet
• Bukit Mahkamah
• Kompleks Maluri
• Kompleks Damai
• Bangunan Menara Weld
TERENGGANU
Rafaai Samsi
General Manager
Business Operations
Sales Outlet
• Kuala Terengganu • Dungun
• Kemaman
Haji Omar
Zaki Mustafa
General Manager
Business Operations
Sales Outlet
• Kota Kinabalu • Airport Kota
Kinabalu • Sandakan • Tawau
• Lahad Datu • Keningau
• Beaufort • Kudat • WP Labuan
• Kota Kinabalu • WP Labuan
Haji Ali Man
General Manager
Business Operations
Sales Outlet
• Batu Lintang, Kuching
• Pending, Kuching • Sibu • Miri
• Bintulu • Sri Aman • Sarikei
• Limbang • Kapit • Lawas
HEADS
• Kuching • Miri
SARAWAK
SABAH
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human resource development
T E L E K O M
M A L A Y S I A
B E R H A D
Introduction
Never before has human resource played such
a key role in business. Globalisation which brings forth the new
phenomenon of mega mergers and strategic alliances at all
levels of businesses, demands an increasing and intensified
degree of corporate interaction and relationship skills.
Communications have been revolutionised by the explosion in
Information and Communications Technology (ICT) and continues
to undergo massive technological advancement, with great impact
on businesses. It mandates a new
orientation and thinking within the
organisation, new specialities and
higher levels of skills and thinking
capabilities. The change goes
beyond mere competence building,
but mindset change in nurturing the ability of our human
resources to adapt to the transformation of the business
environment.
human
143
A Strategic Approach to Staffing
| In response
to the dynamic changes in the business
environment, there is a critical need for Telekom
Malaysia to optimise its human resource through
proactive human resource strategies, policies
and practices. One such critical strategy is
enhancing and improving employee productivity
through right-sizing, right-skilling and re-skilling,
contributing to the Company’s knowledge capital
base. With a group staff strength of about
30,000, encompassing both local and overseas
operations, Telekom Malaysia has a major role
in protecting the high ‘intellectual and experiential
value’ of its human resource assets, in ensuring
that employees are capable of keeping the
Company continuously in high gear.
resource
development
Investment in Human Resource Development
| Human assets have become a crucial and
decisive factor for corporate success. In year 2001, Telekom Malaysia spent approximately RM45 million
on Human Resource Development, encompassing leadership development, training, in-house educational
programmes and scholarship awards.
One major emphasis of our human resource development strategy is the building of strategic leadership. Enhancing
the knowledge and skills of top management is an important objective of Telekom Malaysia. In preparing
future leaders for top and key management positions, the Company has developed its own customised
leadership training and development programmes for the top 200 Key Talents in Telekom Malaysia. This
planned leadership development is targeted at specific groups, including top and key managers, managers
with high potential and fast track executives. The Management Leadership Development Programme
(MLDP) and Senior Management Development Programme (SMDP) are designed to prepare Executives,
Managers and Senior Managers for promotion to the upper echelons of management.
144
human resource development
T E L E K O M
M A L A Y S I A
B E R H A D
Continuous training and education programmes are ongoing to enhance the knowledge and competencies of our
employees. Re-skilling and Up-Skilling programmes in the area of Marketing and Sales, Multimedia, ICT
and Management have been introduced to cope with the rapid changes in the ICT industry. Training is an
important element for Telekom Malaysia to keep pace with an increasingly competitive marketplace. It is
a key business strategy in developing new work culture and practices. Our Human Resource policies and
practices strive for best practices against world standards, dictated by the need to be competitive in the
local and overseas markets. The Company provides in-house educational programmes at Certificate,
Diploma and Postgraduate levels in collaboration with recognised local and foreign universities to assist
employees in their career advancement. The Company also offers scholarships to eligible and qualified
employees to upgrade their knowledge and skills in areas relevant to our business by pursuing
undergraduate and postgraduate studies, either full-time or part-time, and also through an “actionoriented” learning or experiential learning approach.
As part of the nation’s vision, Telekom Malaysia has established the Multimedia University in Cyberjaya and Melaka
to help increase the number of ICT knowledge workers in the country. Telekom Malaysia has also
established the Yayasan Telekom Malaysia (Telekom Malaysia Foundation), to provide scholarships and
educational assistance and opportunities to eligible students throughout Malaysia to study at our
Multimedia University or other established universities both locally and overseas.
Rewarding Employees
| Compensation for employees is a vital part of the management of human
resource. The Company continuously conducts research, benchmarking and surveys in its effort to provide
a competitive compensation and benefits package for employees. Salary Review, Annual Increments,
Bonuses, Merit Awards, Staff Loans Revision and the Employee Share Option Scheme (ESOS) have been
significant contributions in year 2001.
145
Telekom Malaysia’s
commitment towards meeting
the nation’s workforce
requirements
The Company also sought to recognise high achievers amongst its staff. This includes those who are deemed to
have significantly contributed towards meeting management objectives and who have enhanced quality in
the Company. The staff will benefit from Human Resource Rewards and Recognition Programmes with the
establishment of an Employee Of The Month Award, The Excellent Employee Award, The Divisional Award,
Special Awards and various Quality Awards.
As part of the Company’s effort to ensure productivity and to safeguard the welfare of employees, Telekom Malaysia
has enhanced its innovative Employee Assistance Programme (EAP) to tackle a host of employee related
problems such as personal, marital, workplace, career and financial that could affect their performances.
In attending to staff welfare, we have continuously built upon our existing programmes throughout the
year. Educational Assistance for employees’ children, Medical Support Equipment Assistance, Disaster
Assistance, Funeral Expenses Assistance, Childcare Centre and Retirees Assistance programmes have
been implemented and are ongoing. Telekom Malaysia has also provided financial support to internal
Telekom Malaysia clubs and societies that organise welfare activities for staff and dependents.
Building Value Based Leadership Through Work Culture Transformation
| A major
human resource initiative supporting the Telekom Malaysia Change initiative is building value leadership
through its three core values of uncompromising integrity, total commitment to customers and respect and
care. The absorption of these core values, at all levels, will promote a performance driven culture of
teamwork and innovation, ultimately fulfilling Telekom Malaysia’s corporate objectives of profitability,
ownership of customers, operational and employee excellence.
With its Human Resource policies, Telekom Malaysia always strives to strike a proper balance between technical
proficiency and personal welfare, seeking to ensure job satisfaction and commitment, and thereby
optimising employee productivity.
146
customer relationship management
T E L E K O M
M A L A Y S I A
B E R H A D
Working together for Success
Customer Relationship
Management (CRM) is a widely adopted key strategy in today’s competitive
business landscape. It calls for companies to focus directly on the needs
of the customers and, as a result, is revolutionising markets and reshaping
business models throughout the world.
Customer RELATIONSHIP
Management
Customers today face multitudes of choices regarding delivery channels, product packaging, loyalty rewards, service
level guarantees and pricing. In such environments, service and customer loyalty have become the
predominant factors influencing customer decision-making.
CRM is the process of acquiring, satisfying, retaining and growing profitable customers. CRM today, is about
understanding, delivering and exceeding customer expectations.
Core Values of CRM
| CRM requires a customer-centric business philosophy and culture to support
effective markets, sales and service processes.
The goal of CRM solutions is to seamlessly integrate IT and business objectives into every area of the company
that affects customers.
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.
147
CRM in Telekom Malaysia
| In order to unlock the value of CRM, Telekom Malaysia has adopted an
implementation framework based on the interaction of cross-functional business processes drawn from
strategy development, value creation, multi-channel integration, information management and performance
assessment.
The Change Management process implemented in Telekom Malaysia since early 2001, started off with a comprehensive
review of business practices with a view to provide general improvement and to create a platform for a
more comprehensive CRM strategy.
A revised Customer Segmentation Policy has also been introduced. Customer selection and segmentation is now
based on the following customer related issues:
• Customer profiling and status according to Telekom Malaysia’s customer strategy
• Long term relationships
• Knowledge and value of the customer base
• Product/service involvement and complexity of usage behaviours
Telekom Malaysia launched its key CRM project for residential customers with the introduction of the Loyalty Card
program in January 2001. To seek a better understanding of our customers and to reward their loyalty
towards the Company, over 2 million Telekom Malaysia customers have been offered free membership to
RealRewards – a program that allows members to earn points every time he/she uses the telephone. The
program has proven to be very effective in building long term relationships with our customers.
The real value of good customer service will be the
integration of quality customer relationship activities...
Value
Retain
Develop
Increase the
Speed and
Flexibility of
Analysis
Foundation for
Enterprise wide
Data Interaction
and Access
Improve or
Reinvent
Business
Processes
Gain Clear
Understanding
of customer
Customer
Attract
Time
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customer relationship management
T E L E K O M
M A L A Y S I A
B E R H A D
Always at your service
The strengthening of account management, as a result of the company wide restructuring exercise, has placed
Telekom Malaysia in a much better position to create and deliver value for customers.
Customers are provided with ready access to the Company through State Account Management teams and the 150
Telekom Malaysia outlets nationwide. The Sales and Service Call Centre (1050) increased its console
position capacity by 40% in 2001. TM 1050 is equipped with state-of-the art front-end application solutions,
enabling Customer Service Representatives to perform their duties effectively and efficiently. Service at all
3 centres (Johor Bahru, Kuching and Taiping) is similar to that in Kedai Telekom and other Telekom
Malaysia outlets.
2001 saw the introduction of the TM Multimedia Customer Interaction Centre (MCICS) during the relocation of the
Company’s call centre to Wisma Telekom Semarak. Featuring a Customer Relationship Management
System, MCICS is able to provide information on customer profiles, complaint status, account status and
products and services to the customer service representative in a matter of seconds while attending to
customer complaints and queries. The introduction of MCICS has drastically reduced the volume of
customer complaints by 60%. The MCICS centre operates 24 hours a day, 7 days a week.
149
Customer Service with a smile
at Kedai Telekom
In the mobile market, The TMTOUCH Telecare Centre has been established to respond to all call-in complaints and
enquiries from cellular customers and the general public. These calls are attended to by Customer Service
Consultants while written complaints are addressed by Customer Correspondence Consultants, all of
whom have undergone intensive training to provide a professional response.
The Centre is equipped with the latest technology, such as the Customer Contact Management (CCM) System which
enables the Consultants to respond to each enquiry promptly and effectively.
To ensure that technology solutions support CRM, the Customer Value Chain Taskforce, established under the
Telekom Malaysia ICT Master Plan Implementation Framework, has conducted an extensive audit on current
applications. It is now embarking on a long term planning process to provide seamless customer service.
Telekom Malaysia is currently developing its own Data-warehouse, featuring intelligence modules known as BISTARI
(Business Information System and Repository). It provides the core of its many CRM initiatives.
The successful implementation of BISTARI, together with other IT initiatives such as CPC (Customer Profile
Consolidation), EAI (Enterprise Application Integration) etc., will enable Telekom Malaysia to lead in this
new ICT competitive market place.
Market
Identification
Product
Management
Marketing
Sales
Service
Delivery
Service
Assurance
Billing
Customer
Contact
Management
Customer Value Chain
Transforming Telekom Malaysia
| As Telekom Malaysia goes through the transformation process
towards becoming the next generation communications company, two of its main thrusts are maintaining
customer loyalty and ensuring business profitability. Competitive advantage stems from the creation of
value for the customer and is key to the success of Telekom Malaysia. Accordingly, Telekom Malaysia’s
initiatives will address and improve the customer value chain as depicted in the diagram above,
encompassing the Organisation, Processes and Systems aspects of CRM.
CRM requires the commitment of the entire workforce and all business partners throughout the Customer Value
Chain. Although CRM is a complex task, but when supported by a strong framework and strategy, it can
lead to the realisation of considerable benefits for customers and the Company.
150
research & development
T E L E K O M
M A L A Y S I A
B E R H A D
research
development
&
Research and Development
Telekom Malaysia established
its Research & Development Division as one of its priority initiatives. For the
last three years, investment in research and development had shown a
dramatic increase from RM14 million in 1999 to RM24.3 million in 2001.
Introduction
| The changing business environment dictates that the Company should be more competitive in
providing services to customers. In line with this, Telekom Malaysia has drawn up business strategies and
direction which would require research and development to play a lead role in the introduction of
technologies that would give the Company a leading edge.
151
R&D activities gave focus on the various new Telekom Malaysia business initiatives of TM TelCo, (data services,
network and infrastructure), TM Multimedia (Internet and Multimedia) and TM Cellular (cellular services).
In this regard, the Group has defined and drawn up technology direction and roadmap for R&D activities. It has
identified the research needs that must be fulfilled to realise the required technology advancements that
will place Telekom Malaysia at par with other leading Telcos. In line with global industry trends, and to
accommodate Telekom Malaysia’s current and future needs, R&D activities will be focused on four main
industry groups, namely:
• Transport
• Services
• Products
• Content
Skill Gaps
| Most world class Telcos have state-of-the-art telecommunication technologies
at their disposal. They also have the capacity to develop and utilise technology while
enjoying extensive market penetration and global presence.
For Telekom Malaysia to be in the same league, a strong R&D outfit with skilled research teams
are one of the key prerequisites. As part of our efforts to beef up R&D capabilities,
researchers have been recruited from within the Company and externally. Programmes
have been laid out so that researchers will have every opportunity to consistently
improve their skills and knowledge.
Telekom Malaysia aspires to be not just a user of R&D technologies but to master these
technologies sufficiently in its effort to become a global reference point for research
activities. This aspiration will be achieved through the support of R&D objectives as
outlined below:
•
•
•
To lead Telekom Malaysia’s technological direction through the development and enhancement of new
products, systems, network and service quality.
To support Telekom Malaysia management with strategic technological input/information for effective
decision making.
To coordinate and manage technology standards and facilitate the transfer of technology internally and
externally.
•
To generate additional revenue, reduce cost and improve quality through new technology initiatives,
•
To develop linkages with local and international expert groups to promote transfer of information,
pilot projects and design and enhancement of new products and solutions from investigative studies.
technology and shared knowledge.
Inspection of optical fibres
through a Fibre Microscope
during the Optical Time
Domain Reflectormeter
calibration process.
152
caring for the environment
T E L E K O M
M A L A Y S I A
B E R H A D
Building Environmental Awareness through
Socially Responsible Business Practices
Telekom Malaysia has a long and well-established record in social responsibility
and commitment towards national interest. Environmental conservation, one
of the goals of Vision 2020 is high on our list of contribution towards a
caring society. The Company has taken a proactive stance in pursuing a
policy of environmental management at several levels.
caring
This begins with a rigorously complied legal obligation, in the disposal of equipment, particularly that which may
pose a threat to the environment. At the same time, we are in the process of examining the scope for
recycling and resulting cost savings, where appropriate. For several years, the Company has observed a
recycling policy on all paper products, using both sides of a document, with minimum waste, aiming
towards a paperless operation and cost reduction of 5% per year in this area. After use, cable is returned
to the store for recycling and recouping of investment. Since 1997, Telekom Malaysia, in association with
local authorities, has spearheaded efforts to reduce road digging by introducing common trenching for use
by all telco operators. In the same period, wet batteries have been withdrawn from use and replaced with
sealed dry cell units. Despite initial substantial investment, this shift has resulted in low maintenance cost
and posed minimal threat to the environment.
Regular assessments are carried out on environmental risks and are to key to policy planning and implementation.
Our philosophy encompasses a concern for the landscape and the need to preserve and protect the
natural beauty and wildlife of our country for future generations.
Lush green surroundings and cascading
pools set the stage for a conducive working
environment at Telekom Malaysia’s Corporate
Headquarters
for the
environment
Our relationship with the environment is symbolised in the design of the new 55 storey Menara Telekom which
represents a sprouting bamboo shoot. It is one of the latest intelligent buildings that make up the face of
the new Kuala Lumpur. We preserve the individuality of the building which is the hallmark of our key
landmark buildings which contributes to the visual appeal of this city. We did not want the anonymous
uniformity of a modern high rise, but preferred a design that was intrinsically Malaysian and therefore,
original. The choice of a bamboo shoot suggests a building rising from the Malaysian earth, expressing
the richness of our tropical origins, and the strength and versatility of our homegrown products. A total
of twenty one skygardens, each being featured on every third floor, provide a conducive working
environment for employees. The Intelligent Building System which provides infrastructure for multimedia
services with high speed connectivity features an energy efficient facilities management system. Menara
Telekom is CFC free. It utilise centralised district cooling system which pumped chilled water to all floors
and operated by an underfloor supply unit to provide air conditioning. Although somewhat more expensive
to operate, it demonstrates our commitment and objective of providing a healthy, pollution free environment.
Whilst keeping pace with technological advances, particularly in extending the telecommunications infrastructure
throughout the country, we have been careful and sensitive by doing it in an environmentally friendly way.
In the construction of Menara Kuala Lumpur, for example, we were careful to preserve a hundred year old
Jelutong tree in the vicinity of the tower.
154
caring for the environment
T E L E K O M
M A L A Y S I A
B E R H A D
Significant initiatives have included notably Telekom Malaysia’s contribution to environmental awareness at the Paya
Indah Wetlands in Dengkil. Our sponsorship programme there for the care of four hippopotami
demonstrates the leadership role we wish to take in raising the awareness of Malaysians towards not only
their own natural heritage but to the environment in general.
2001 is the Year of the Hippo for Telekom Malaysia
| Prime Minister Y.A.B. Dato Seri Dr.
Mahathir Mohamad, at the official opening of the Paya Indah Wetlands, which is a 45 minute drive away
from Kuala Lumpur, said that preservation of the environment is an important guideline in the national
development blueprint. In describing the Wetlands as the Government’s gift to the nation, the Prime
Minister hoped the younger generation would benefit by learning about the valuable eco-system and learn
to care for its preservation.
Moving in tandem with its role in nation-building through environmental awareness, Telekom Malaysia has provided
a sponsorship of RM750,000 for the management and maintenance upkeep of four hippopotami donated
by the Government of Botswana. The sponsorship includes food, manpower, maintenance of enclosure,
A bird’s eye view of the city’s skyline from
amongst lush green surroundings at
Telekom Malaysia’s Corporate Headquarters
healthcare, preparation of educational materials for visitors and care of the four hippopotami for a period
of three years.
Chief Executive of Telekom Malaysia, Y.Bhg. Dato’ Dr. Md Khir Abdul Rahman, elaborated that the hippo had been
adopted as the mascot of Bluehyppo.com, the lifestyle portal launched by TM Multimedia in 2001. As one
of the largest animals in the world, it represents a capacity for mass, growth and variety. Just like
BlueHyppo.com entered the ICT scene as the first local lifestyle portal, the four new arrivals are the first
hippos to live in natural surroundings in Malaysia.
The four Nile Hippopotami, was flown from Botswana on a 27-hour flight. They had to undergo a two-week
quarantine before being released at the Wetlands. Their home is a 1.2 hectare lake with a depth of about
five metres and enclosed by a low wall with electric wiring. This is because the hippos are able to scale
low obstacles and can be dangerous. In contributing to the upkeep of the hippopotami, Telekom Malaysia
hopes that they will prove a valuable tool in making the Wetlands a premier centre of environmental
education. The hippopotami add a live dimension to the rehabilitation of the ex-tin mining land at Paya
Indah, which also houses peat swamp forests and a myriad of lakes.
155
As animals well known for their love of muddy areas, it is hoped the hippopotami will make the Wetlands their
natural habitat, and in years to come propagate and populate the area and contribute to the overall ecosystem. The culmination of a six-year effort, the Paya Indah Wetlands stands as Malaysia’s testimony to
being able to manage its own environment. By sponsoring the hippopotami, Telekom Malaysia has
become part of an overall Malaysian effort to recreate, for the benefit of future generations, an eco-system
that might otherwise be lost.
Telekom Malaysia Preserves a 100 Year Old Jelutong Tree at Menara Kuala Lumpur
|
While Menara Kuala Lumpur stands tall as one of Malaysia’s most impressive landmarks, many do not
know the story behind the preservation of the 100 year old Jelutong Tree (Dyara Costulata) adjacent to
the tower.
Perched atop Bukit Nanas and rising to a height of 421 metres, Menara Kuala Lumpur is the fourth tallest
communications tower in the world. In the course of building the tower, Telekom Malaysia undertook to
preserve the 100-year old tree at a cost of RM430,000. The tree is now recognised as part of the natural
heritage of Kuala Lumpur and it is almost as old as the city itself.
The architects of Kumpulan Senireka Sdn. Bhd. paid great care in building the wall separating the Tower from the
100-year old tree. These efforts have paid off as today’s trekkers and visitors to Menara Kuala Lumpur
have the benefit of walking through the forest reserve surrounding the tower, experiencing a sense of the
Malaysian jungle that has now become a thriving city metropolis. By preserving the Jelutong Tree, Telekom
Malaysia is in the vanguard of corporates that prove development and the natural environment can coexist side by side.
Connecting Malaysia to The Rest of The World
| Telekom Malaysia is no novice to environmental
conservation. In the construction of its many hill stations located throughout the country, efforts are
consistently made not to damage the eco-systems already in existence. Protection of the natural tropical
countryside throughout the nation is high on the list of priorities in any work undertaken by the company.
This policy also covers submarine work carried out at the ocean bed. In positioning its many undersea
cables for telecommunication purposes, Telekom Malaysia undertook a number of commissioned reports
on the best way of preserving the sea bed while laying cables. Over the last twenty years, Telekom
Malaysia has worked steadfastly to extend communication lines throughout Malaysia through its hill top
towers and submarine cables. In doing so, the reef and undersea eco-systems remain untouched, and
the natural beauty of the rural landscape protected, while connecting Malaysia to the rest of the world.
Telekom Malaysia aims to become one of the top corporate ‘green’ entities in the country.
We want to be the
spark when you dream,
when you aspire.
When you achieve your goals.
Reaching Out, Raising Excellence
Run, jump, play. Push the limits.
Exceed your goal. Break that record.
We need
heroes to believe in.
We need
champions to cheer for.
We’re reaching out to bring you
world-class events.
We’re reaching out to develop
world-class talent.
To inspire you.
158
inspiring achievements – our contributions to the nation
T E L E K O M
M A L A Y S I A
Our
B E R H A D
CONTRIBUTIONS
to the nation
Telekom Malaysia: Connecting with Our Community
and Contributing to National Excellence Since its
inception, Telekom Malaysia has been at the forefront of the national
ICT infrastructure development which keeps the community in touch.
A significant aspect of our proud tradition is towards charity and
community support. Being a good corporate citizen is one of Telekom
Malaysia’s key priorities, with the goal of building and maintaining
positive relationships, while improving the quality of life for everyone,
now and for generations to come. Committed to the communities
within which we operate, our charity and community programmes are
designed to support projects which are innovative and sustainable,
that produce tangible results and promote national excellence. The
Company will continue to build on these foundations, reflecting our
position as a telecommunications leader with a heart.
Just as our products touch people’s everyday lives and add value to consumers, shareholders, employees and
business partners, our philosophy of a caring corporate citizen is carried through our contribution ethic,
ensuring a high return for the community. Throughout the year, our Company supported many
philanthropic causes, ranging from conferences, charities to fund-rising dinner for good causes. Most
projects supported by Telekom Malaysia are not mere one off, but are sustained contributions to the
chosen priorities of national level. Each in its own way, is seeking to drive Malaysia towards of a
developed country status as envisaged by Vision 2020. Two particular areas are worthy of special mention.
159
Contribution to Intellectual Discourse
| This contribution is of vital necessity specially in periods of
strategic change. We need to examine new directions and priorities, the implications of a new globalised
world and the impact of crisis and uncertainty. Companies and societies have to reinvent themselves with
new thinking, essentially strategic thinking. In this regards Telekom Malaysia has helped to provide the
forum for some of this analysis and creativity.
Since 1995, the company has supported the Langkawi International Dialogue (LID), contributing a total of
RM5,080,000 in cash and providing technical and telecommunications facilities in kind. LID seeks to
promote and nurture smart partnerships and alliances within the English speaking community worldwide
where Malaysia offers an economic role model to other developing continents like Africa. It promotes
globalisation, international relations across cultures and mutual business opportunities. LID embodies part
of one national credo – to support constructive engagement amongst nations. It also gives recognition to,
and showcases Malaysia’s achievements. LID champions community initiatives such as medical care in
rural areas, as well as women’s affairs and education. It helps the Commonwealth as live up to its name.
Additional side benefits are tourism and the opportunities made available for Malaysian entrepreneurs and
businessmen for cross border investments.
Telekom Malaysia is fully committed to help businesses make the necessary transition to keep ahead in a
competitive arena. Our Deputy Chief Executive, Y.Bhg. Dato’ Dr Abdul Rahim bin Haji Daud, is Chairman
of the Commonwealth Telecommunications Organisation (CTO) since 1999, and has spearheaded
workshops and seminars to develop new thinking in the global community. Telekom Malaysia hosts these
events in recognition of the benefits obtained with the exchange of experience and expertise.
Another key business event namely the “Venture 2001 Malaysia” was a business plan competition based on similar
events in Germany, Switzerland, Netherlands, South Africa, India and Singapore. Held in November 2000,
it generated 447 business ideas in Malaysia from budding technopreneurs. As an Information
Communications Technology leader, Telekom Malaysia was proud to sponsor this programme, which make
it mandatory for participants to deliver rigorous planning in areas of finance, strategy, implementation and
management. Top teams received coaching from some of the leading corporates in the country, with the
final winner receiving RM30,000. Y.A.B. Dato Seri Dr. Mahathir Mohamad, the Prime Minister gave away
prize to the winner. Recognition and reward of entrepreneurship is vital to national growth. The Company’s
contribution to this initiative was RM200,000.
160
inspiring achievements – our contribution to the nation
T E L E K O M
M A L A Y S I A
B E R H A D
Communication in Sport
| Malaysia is raising its
profile in the international sports world. Recognition of
this is evident from the choice of Malaysia as a
favoured venue for international events like the
Commonwealth Games, Formula 1, The SEA Games
and World Cup Hockey. Our reputation is well
established for organising these events to world
standards and the provision of facilities second to
none. A good demonstration of “Malaysia Boleh”. The
performance of our Malaysian contenders contributes
to national pride and puts Malaysia on the world map,
especially given the exposure of worldwide TV
coverage attracted by such major events. It brings an
increasing number of visitors to our shores. This has
the salutary effect of introducing the outside world to
the reality of Malaysia – a safe, clean, modern haven
with some of the most advanced infrastructure in the
region. A showcase of cultural diversity compled with
the powerful, visual and scenic appeals makes
Malaysia a journey of discovery. Telekom Malaysia has
contributed in cash and kind to many such sporting
events.
Telekom Malaysia Le Tour de Langkawi is a very high profile
cycling event, much looked forward to in the annual
international sporting calendar. Telekom Malaysia has
sponsored the race for seven years and became the
title sponsor in 2001, when it was renamed the
Telekom Malaysia Le Tour de Langkawi. This
magnificent international cycling race is the only one
of its kind to be held outside of Europe and North
America, and has been acknowledged as a major nonEuropean cycling event by the International Cycling
Union. With an improved world status rating of 2.3, the
race will continue to attract an increasing number of
professional competitors to Malaysia. In 2002, 154
professional riders representing 22 teams participated
in the race supported by a great number of
international cycling enthusiasts. For the first time in
2002, Telekom Malaysia provided live coverage of all
the finishing phases of the race into living rooms of
fans around the world. The 10-day sporting event was
provided with Internet access, video streaming, fixed
and mobile telephony for the International Media
Centre and Secretariat as well as broadcasting links to
television stations around the world by Telekom
Malaysia. The daily coverage presented the best of
161
Malaysia audiences the world over and positioned the Telekom Malaysia Le Tour de Langkawi on par with
the great road cycling races of the world such as the Tour de France, Giro D’Italia and the Spanish Vuelta.
In 2001, Telekom Malaysia contributed a grand total of RM8 million in cash and in kind by providing the
telecommunication infrastructure necessary to deliver this event domestically and internationally. The live
broadcast has brought the sponsorship value to RM10 million in 2002.
The KL International Tower Jump 2002 and The Menara Alor Setar Tower Jump took place in the first two months
of the year, providing a world’s first in buildings, antenna, spans and earth (BASE) jump history by having
two such events in one country in the same week. This literally high profile sporting event attracted
participants from the USA, Australia, United Kingdom, Sweden, Belgium, Spain, Germany, Indonesia,
Singapore and of course, Malaysia. Jumpers make a freefall of about three seconds to clear the tower
head before deploying their parachutes. Taking approximately 10-12 seconds to reach the ground in a
normal freefall exercise, jumpers require a minimum height of 800 metres as a safety margin before
deploying the chute. As the fourth tallest tower in the world at a height of 421 metres, Menara KL
presents a formidable venue for this prestigious event. Y.B. Dato’ Hishamuddin Tun Hussein, Minister of
Youth and Sports was at both events to spur on competitors.
Telekom Malaysia International Towerthon Fest 2001 took place from 14 July to 5 August at Menara KL, attracting
more than 1800 participants. In its third year, the event attracted some of the top tower runners in the
world to this extreme staircase running sport. To promote awareness and increase participation amongst
Malaysians, Telekom Malaysia held roadshows at ten major locations nationwide before the Malaysian
Selection Race, Junior Tower Run and Charity Tower Run. In total, eight events took place within the
month, culminating in the International Towerthon on 4 and 5 August, where the best Malaysian male and
female runners were sponsored by Telekom Malaysia to participate in the AMP Tower Run in Sydney,
Australia, thus increasing our international sporting profile. The Telekom Malaysia International Towerthon
is regarded as the top tower run in the world, offering the highest prize money of RM117,800. Sporting
records have been broken every year so far, and competition continues to increase. In 2001, Telekom
Malaysia allocated RM1.5 million to this event which is an important feature in the world sporting calendar.
In August, Telekom Malaysia supported the final round of The Track World Cup 2001 with a donation of RM50,000.
This is the world’s premier cycling track team event, bringing to Malaysia more than 30 cycling teams
from all over the world. Malaysia is the first nation to be awarded the right to host the final round for two
years running and the only second Asian country to host a round of the World Cup. There is obvious
synergy between this event and the Telekom Malaysia Le Tour de Langkawi, promoting cycling as a
healthy activity and competitive sport, while leveraging on the opportunity for Malaysia to be known by a
global audience.
Telekom Malaysia was one of the four main sponsors of the XXI SEA Games held in Kuala Lumpur in September,
providing over 1,000 experienced personnel and the necessary infrastructure to provide the highest quality
broadcasting coverage in the country and to participating countries, namely Brunei, Thailand, Indonesia,
Singapore, Philippines, Laos, Cambodia, Myanmar and Vietnam. Telekom Malaysia invested extensively in
state-of-the-art hardware at the Games stadia and, for the first time in Asia, submarine telecommunication
cables were used to provide direct video feed to broadcasters. An allocation of RM3.8 million in cash and
kind was made to the XXI SEA Games, with a further RM6.2 million contributed in broadcast expenditure.
The SEA Games play a vital role in bringing together the communities of South East Asia, fostering better
understanding of the region’s diverse cultures, languages and religions. In keeping with its core values,
Telekom Malaysia will continue to support such nation building events.
162
highlights of the year 2001
T E L E K O M
M A L A Y S I A
B E R H A D
Telekom Malaysia launched its Internet Data Centre or TM IDC,
housed at its premises in Cyberjaya. TM IDC will help propel
Malaysia towards becoming the regional hub for Internet and
multimedia operations in the Asia Pacific Region. Targeted at
Multinational Corporations (MNCs), Application Service Providers
(ASPs) and Internet Service Providers (ISPs), TM IDC provides
a comprehensive range of telecommunications and Internet
infrastructure, as well as server and web hosting services.
30 January 2001
Telekom Malaysia signed an agreement with Prism Holdings
Limited of South Africa, to establish a new joint-venture
company named Telekom Technology Sdn. Bhd. (TTSB).
The company will provide and operate a national secured
electronic transaction switch for the country. The synergy
between TM’s vast customer base, its extensive network
and Prism’s technical expertise, will open the door to
comprehensive online transactions and home shopping
services, going beyond bill presentation and payment.
7 February 2001
highlights
20 February 2001
Telekom Malaysia played host to the 11th Asian Multimedia Forum (AMF) Plenary Meeting.
AMF is a non-profit organisation founded in 1997. Its main objective is to contribute to the
development of multimedia services and technology in Asia. During the meeting,
participants shared their views on regional multimedia policy and regulations, new carrier
initiatives, multimedia developments, e-commerce and IP telephony. Cik Suriah Abd.
Rahman, Deputy Secretary General I, Ministry of Energy, Communications and Multimedia
officiated at the meeting.
163
Telekom Multimedia created another first by launching its
inaugural Web Application Service – through the Netmyne
Exchange 2000 (Netmyne E2K). Netmyne, established in
1999, currently provides hosting services to more than 3,000
customers. Services include web, server, commerce and
media. With this launch, Netmyne has moved into its next
phase as a Web Application Services Provider.
15 March 2001
2001
The Company launched its second TMWiLL (Wireless in
Local Loop) service in the country for the benefit of residents
in Seberang Chenor, Pahang. TMWiLL is a Wireless
technology that enables telephone service to be made
available in rural areas where accessibility by normal fixed
lines is difficult and uneconomical. The first TMWiLL service
was launched in Jeli, Kelantan, in April 1999.
2 April 2001
Y.B. Datuk Amar Leo Moggie, Minister of Energy, Communications
and Multimedia launched BlueHyppo.com, Malaysia’s very own
lifestyle portal. The content is geared towards becoming a onestop destination for surfers, offering the latest in finance, sports,
entertainment, career tips and more. Since the launch,
BlueHyppo.com has gained huge publicity through an extensive
advertising and promotion campaign to build awareness and
imprint the brand image on potential customers.
14 April 2001
164
T E L E K O M
M A L A Y S I A
B E R H A D
Telekom Malaysia introduced its 2nd generation VSAT
Network. VSAT refers to the Very Small Aperture Terminal
digital communications service, transmitted via satellitebased earth stations. The system is being rapidly adopted
as a cost-effective and reliable means of providing
Internet, voice, fax, data and multimedia services to
corporations, the Government and consumers.
The launch of TMnet Streamyx marked the
Company’s entry into the much-hyped consumer
broadband market. Using xDSL technologies, the
service allows Internet access speeds of up to
2.0 Mbps. Targeted at the residential, Small
Office Home Office (SOHO) and Small and
Medium Enterprises (SME) markets, TMnet
Streamyx is expected to further enhance TMnet’s
dominance in the local ISP scene.
16 April 2001
highlights
26 April 2001
4 May 2001
Telekom Malaysia signed the fifth Collective
Agreement with the National Union of Telekom
Employees (NUTE). The agreement, valid for
three years (2001 – 2003) outlined the terms and
conditions of service for 21,500 non-executive
employees. Chief Executive, Y.Bhg. Dato’ Dr. Md
Khir Abdul Rahman signed on behalf of the
Company while Encik Mohamed Shafie BP
Mammal signed on behalf of NUTE. The signing
of the agreement was witnessed by Y.B. Datuk
Amar Leo Moggie, Minister of Energy,
Communications and Multimedia.
165
The Company launched telecommunication services in several
remote areas of Sarawak, including Kanowit, Julau and Serian.
The communities in these areas are now able to enjoy Internet,
voice, fax, data and multimedia services. Access is provided
using highly sophisticated solar-powered wireless technologies,
such as Wireless in Local Loop (WiLL), satellite-based Very Small
Aperture Terminal (VSAT), and Very High Frequency (VHF)
technology.
12 May 2001
2001
14 June 2001
Telekom Malaysia became an Official Partner of the Kuala
Lumpur XXI SEA Games 2001 with a contribution of RM3.8
million to the Organising Committee of the Games. The
Company was responsible for providing telecommunications
and broadcasting infrastructure services. These services
were crucial to the smooth running of this prestigious
sporting event. The Company’s contribution reflects its
commitment in supporting the Government’s efforts in
projecting Malaysia as a nation capable of organising
world class sporting events.
4 July 2001
Y.B. Datuk Tan Chai Ho, Deputy Minister of Energy, Communications and Multimedia,
accompanied by Y.Bhg. Dato’ Dr. Halim Shafie, Secretary General of the Ministry, Cik Suriah
Abd Rahman, Deputy Secretary General 1 and senior officers from the Ministry and the
company, visited Telekom Malaysia’s Customer Assistance Service Centre in Seremban. The
Customer Assistance Service Centre in Seremban is one of nine Emergency (999) Service
Centres of Telekom Malaysia 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 Service
Centre. Mr. Tan Chian Khai, Senior Vice-President, Consumer and Business TM TelCo, Telekom
Malaysia briefed the Deputy Minister and his entourage.
166
T E L E K O M
M A L A Y S I A
B E R H A D
Pusat Pungutan Zakat (PPZ) today officially joined VADS’s econtribution community in offering the nation’s first Islamic
electronic link service targeting at corporations. The RM5 million
Business to Government (B2G) application service has been
created to provide on-line communication and data transmission
between statutory organisations, agencies and corporations.
10 July 2001
14 July 2001
Telekom Malaysia signed an agreement on
Leased Lines Services with the Putrajaya Federal
Government Administration Centre for a Putrajaya
Campus Network. Phase 1 of the Network,
linking the Prime Minister’s residence and Parcels
B, C, and E has been completed. The contract
value for this project is RM8,190,000 spread over
a period of three years.
highlights
31 July 2001
Telekom Malaysia invested RM45 million for
the development of an e-business solution
called COINS iOFFICE, targeted at small and
medium-sized industries (SMI). The solution,
jointly developed with Sun Microsystems
Malaysia Sdn. Bhd., involved almost two
years of research. COINS iOFFICE is a
communication tool that gives access to both
voice and data from one source via a desktop
personal computer or laptop. It also allows
businesses to make phone calls, send and
receive faxes and e-mail messages as well
as provide access to the Internet. The
service is backed by Telekom Malaysia’s
Corporate Information Superhighway (COINS)
infrastructure.
167
Telekom Malaysia launched its TMWill-Wireless in
Local Loop service, which utilises radio frequencies
instead of the usual copper wire network, to
provide communication services for the residents of
Sekinchan, Selangor. The service was launched by
Y.A.B. Dato’ Dr. Mohamad Khir bin Toyo, Menteri
Besar of Selangor. This is the first system in Selangor
and the third in the country after its initial launch in
Jeli, Kelantan in April, 1999. The second service
was launched in Temerloh, Pahang early this year.
3 August 2001
2001
7 August 2001
With a contribution of RM150,000, Telekom Malaysia became the main
sponsor of the inaugural Asia Pacific Information & Communications
Technology (APICT) Awards Programme, organised by the Multimedia
Development Corporation (MDC). In addition, the Company also sponsored
the ‘Best of Education Application’ Award. Multimedia University, a
wholly-owned subsidiary of Telekom Malaysia outclassed ten other
nominees from seven countries by winning this Award with its
Multimedia Learning System.
Telekom Malaysia signed an agreement with India’s Videsh Sanchar
Nigam Limited (VSNL) for the establishment of a COINS Global
node to provide Frame Relay service in India. The business
partnership offers seamless and complete management of end-toend service with the flexibility of Single End Billing. The service
will be beneficial for multinational companies (MNCs) operating
from Malaysia with bases in India and vice versa.
Telekom Malaysia signed a Partnership Agreement with Computer
Access Private Limited (CAPL) to jointly coordinate in the areas of
Business Systems Design and Implementation, and to provide
Operational and Maintenance support for customers in India.
28 August 2001
168
T E L E K O M
M A L A Y S I A
B E R H A D
Telekom Malaysia launched its BlueHyppo.com SEA Games XXI
2001 Streaming service in conjunction with the South East Asian
Games held in Kuala Lumpur. Streaming is the latest broadcasting
technology powered by Netmyne, a service provided by TM
Multimedia. The service offered includes Live Streaming and
Media-On-Demand via the Internet which can be viewed through
Telekom Malaysia’s BlueHyppo.com lifestyle portal. Y.B. Datuk
Amar Leo Moggie, Minister of Energy, Communications and
Multimedia, graced the event.
The closing ceremony for the SEA Games XXI
was held at Stadium Nasional Bukit Jalil. The
Prime Minister, Y.A.B. Dato Seri Dr. Mahathir
Mohamad was the Guest of Honour at this
ceremony. To ensure the smooth running of the
SEA Games, Telekom Malaysia provided
telecommunications facilities and a Business
Centre.
17 September 2001
28 August 2001
highlights
Telekom Malaysia launched its TM CDMA Wireless
service in Bau, Kuching, Sarawak. Code Division Multiple
Access (CDMA) utilises digital wireless access technology
operating on a 800 Mhz frequency band. The service
was launched by Y.B. Dr. Tiki Lafe, Member of Parliament
for Mas Gading, who is also the Deputy Minister of
National Unity and Community Development.
21 September 2001
Sarawak is the first state to enjoy TM CDMA Wireless
Service. This is the second CDMA project launched in
Sarawak, the first being launched by Y.B. Datuk Amar
Leo Moggie on 9 September 2001 at Rumah Jungan,
Sibu.
169
Telekom Malaysia signed an agreement with Country Heights
Holdings for the provision of High-Speed Broadband Access (HSBA)
to homes in Country Heights. This technology enables existing
telephone lines to carry voice and high speed data connections
through either Internet or LAN connections simultaneously. This high
speed data connection can cater for new multimedia application
services. The contract is valued at RM700,000 and the project is
expected to be completed in 2004.
13 October 2001
2001
13 October 2001
Telekom Malaysia celebrated 18 high achieving scholarship holders in an
award presentation ceremony held at Menara Kuala Lumpur to recognise
exceptional scholarship and extra-curricular achievements. These Yayasan
Telekom Scholars were presented RM1,000 cash awards, an appreciation
certificate as well as a memento in recognition of their achievements.
The Calibration Laboratory of Telekom Research & Development
Sdn. Bhd. (TM R&D) was accredited the International Standard
ISO/IEC Guide by the Department of Standards Malaysia under a
national unified laboratory accreditation scheme, known as Skim
Akreditasi Makmal Malaysia (SAMM).
In recognition of laboratories that have been successfully accredited
to the International Standard, the Department of Standards
Malaysia held a ceremony to present the awards to the laboratories.
15 October 2001
The accreditation is an international recognition of the technical
competency of TM R&D Calibration Laboratory in generating
technically valid calibration results. This accreditation also fulfilled
the requirements of the European Standard EN45001 and relevant
requirements of the International Standard ISO 9001/2. The
accreditation covers both Permanent and Mobile laboratories.
170
T E L E K O M
M A L A Y S I A
B E R H A D
Telekom Malaysia signed an agreement with Hospital Universiti
Kebangsaan Malaysia (HUKM) for the Bulk Payment System. The
system involves 99 telephone accounts at HUKM Bandar Tun
Razak, Fakulti Perubatan Kuala Lumpur and Hospital Bersalin
Hulu Langat. With this new system, all billing and payments are
processed on a particular date and payment will be made either
by cheque or by bank draft.
1 November 2001
Telekom Malaysia won 4 awards in conjunction with the Citra Wangsa
Malaysia Awards for the Private Sector, organised by Dewan Bahasa dan
Pustaka. The awards were:i) Citra Award for Private Sector Annual Report 2000 (Jury Award)
ii) Citra Award for Billboard Advertisement 2001 (Jury Award)
iii) Citra Award for TV Advertisement 2001 (Jury Award and Grand Award)
The Award ceremony was held at Auditorium Angkasapuri.
10 November 2001
highlights
As a responsible corporate citizen, Telekom
Malaysia contributed 60 boxes of Hari Raya
goodies worth RM3,000 to the Ministry of
Defence to be distributed to our troops
serving on the front-lines. This contribution
was presented by Y.Bhg. Dato’ Ir. Md. Radzi
Mansor, Chairman, Telekom Malaysia to
Y.B. Dato’ Seri Najib Tun Abdul Razak in a
ceremony held at the Ministry of Defence.
3 December 2001
171
Telekom Malaysia once again joined hands with the Royal
Malaysia Police in the launching of the road safety campaign
known as ‘OPS SIKAP’ in conjunction with the festive season.
The Campaign was launched at the Exhibition Centre, Mid
Valley Megamall, and was officiated by the Inspector General of
Police, Y.D.H. Tan Sri Norian Mai. Chief Executive Y.Bhg. Dato’
Dr. Md Khir Abdul Rahman, represented Telekom Malaysia at
the ceremony.
Telekom Malaysia handed over 10,000 posters on road safety
and 75 mini canopies to PDRM as part of its contribution
towards the campaign.
21 December 2001
8 December 2001
2001
A consortium of leading telecommunication companies launched
the Asia Pacific Cable Network 2 (APCN 2), the world’s first pan
Asian submarine ring system.
The APCN 2 System comprises 19,000 km of submarine cable,
connecting China, Hong Kong, Japan, Korea, Malaysia,
Philippines, Singapore and Taiwan. Consortium members have
invested over US$1 billion in the project, which uses the most
advanced fibre optic technology deploying state-of-the-art
Dense Wavelength Division Multiplexing (DWDM) technology to
ensure an eventual design capacity of 256 t/bits.
Telekom Malaysia launched the automatic vehicle location service
(TM AVL), allowing users to monitor the location and status
information of vehicles from remote locations through the Internet.
The service was launched at Menara Kuala Lumpur by Y.Bhg.
Dato’ Dr. Md Khir Abdul Rahman, Chief Executive.
28 December 2001
TMAVL is a technology that allows the current position of moving
vehicles or any mobile assets to be tracked using a combination
of Global Positioning System (GPS), network communications and
geo-spatial systems technology. TM AVL service was introduced
by TM Geomatics, a division in Telekom Malaysia that specialises
in Geo-Spatial Information Technology (GIT).
172
corporate & social responsibilities
T E L E K O M
M A L A Y S I A
B E R H A D
CARING FOR THE SHAREHOLDERS
27 February 2001
Telekom Malaysia registered a revenue of RM8,816 million for the year
ended 31 December 2000, an increase of 12.5 per cent over
1999. Net profit of the Group climbed 55.7 per cent to RM1,271
million. The increase was mainly due to customer growth in the
telephony and cellular sectors as well as data services.
Telephony services contributed 69 per cent of the operating
revenue, while cellular and data accounted for 12 and 10 per
cent respectively.
Corporate &
Social
Responsibilities
15 May 2001
The Company’s 16th Annual General Meeting and Extraordinary General Meeting
was held at the Mutiara Hotel, Kuala Lumpur. It was chaired by Y.Bhg.
Dato’ Ir. Md. Radzi Mansor, Chairman of Telekom Malaysia. The Chief
Executive, Board of Directors and Management Team were also present.
Approximately 800 shareholders and proxies attended the meeting,
in which several resolutions were passed including the declaration of a
10 per cent dividend.
173
CARING FOR EMPLOYEES
16 January 2001
Telekom Malaysia treated its employees to a Hari Raya celebration
at its Headquarters in Kuala Lumpur. This annual
gathering was aimed at enhancing relationships between
management and staff as well as amongst all employees
of the Company.
18 May 2001
In keeping with its tradition as a caring organisation, Telekom Malaysia held a
dinner in honour of its 102 retirees in Langkawi. Fondly known as
“Jasamu Dikenang” the dinner was the culmination of a three-day
programme, which included tours and shopping sprees on the island. In
his speech, Telekom Malaysia Chairman, Y.Bhg. Dato’ Ir. Md. Radzi
Mansor, expressed deep appreciation for contributions made by Telekom
Malaysia’s retirees during their service with the Company.
21 May 2001
TIARANITA, an organisation for wives and female
employees of Telekom Malaysia, organised a
treasure hunt known as Tiara Charity Hunt
2001. 400 participants were flagged off from
Menara Telekom by the Chief Executive
Y.Bhg. Dato’ Dr. Md Khir Abdul Rahman.
Part of the proceeds from the event was
donated to various charity organisations.
174
T E L E K O M
M A L A Y S I A
B E R H A D
CARING FOR EMPLOYEES
5 July 2001
Some 500 employees of Telekom Malaysia from 13 state contingents
gathered at the Universiti Sains Malaysia Stadium in
Penang to participate in the Company’s Eleventh National
Athletic Championships. This annual championship,
covering 52 sporting events, was organised by Kelab
Telekom Pulau Pinang. Yang di-Pertua Negeri of Penang,
Tuan Yang Terutama Tun Dato’ Seri Haji Abdul Rahman
Haji Abbas, officiated at the Opening Ceremony.
3 August 2001
Telekom Malaysia held a reception, called “Jasamu Dikenang” in Langkawi in honour of 129
retired employees. The event was the highlight of a three-day programme including
tours and shopping sprees on the island. During the dinner, Y.Bhg. Dato’ Ir. Md. Radzi
Mansor, Chairman and Y.Bhg. Dato’ Dr. Md Khir Abdul Rahman, Chief Executive,
presented souvenirs to the retirees as a token of the Company’s appreciation for their
loyalty, dedication and contributions toward the achievement and progress of the
Company.
16-17 August 2001
Held at Telekom Malaysia’s holiday resort Sri Intan in Port Dickson, the TM TelCo Quality Retreat Seminar
gave emphasis to the vision, mission and role of TM TelCo and resolved to establish the TM
TelCo Quality Council. The council is responsible for developing and ensuring that the Quality
Policy is being implemented. Present at this seminar were TM TelCo Management, the Quality
Improvement and Business Excellence Division (QIBE), Strategic Management Services
Division, Multimedia Super Corridor Division (MSC) and State General Managers for Kuala
Lumpur, Selangor, Melaka and Negeri Sembilan. Also present were officers from the Corporate
Strategy Division, Change Management Office and TM TelCo Quality Management. Chief
Executive, Y.Bhg. Dato’ Dr. Md Khir Abdul Rahman officiated at the seminar.
175
16 September 2001
232 graduates attended Telekom Training College’s 6th Convocation Ceremony
held in Kuala Lumpur. Y.B. Chia Kwang Chye, Parliamentary
Secretary, Ministry of Energy, Communications and Multimedia,
presented the graduands with their diplomas from the School of
Telecommunications, Information Technology, Business Management
and Multimedia Studies. Also present was Chief Executive, Y.Bhg.
Dato’ Dr. Md Khir Abdul Rahman.
26-27 October 2001
Telekom Malaysia held its 15th National Level Tilawah Al-Quran and Tahfiz Al-Quran at the
Telekom Training College, Jalan Semarak, Kuala Lumpur from 26 to 27 October 2001.
A total of 25 qari and qariah for both the adult and children categories and 10 from
Tahfiz, participated in the two-day event. The participants were representatives of
Telekom Malaysia from the Head Office, Central, Southern, Northern, and Eastern
Regions, Sabah and Sarawak. Y.Bhg. Dato’ Ir. Md. Radzi Mansor, Chairman, officiated
at the Opening Ceremony. Chief Executive, Y.Bhg. Dato’ Dr. Md Khir Abdul Rahman
presented prizes to the winners and officiated at the closing ceremony at the end of
the event.
5 December 2001
Badan Kebajikan Islam Telekom Malaysia (BAKIT) held a “Majlis
Berbuka Puasa” at Wisma Telekom, Jalan Pantai Baru. It
was held to strengthen friendship and foster family values
amongst Muslim staff through the breaking of fast and the
tarawih prayer. Chairman Y.Bhg. Dato’ Ir. Md. Radzi Mansor
and Y.Bhg. Dato’ Dr. Md Khir Abdul Rahman were present
at the function.
176
T E L E K O M
M A L A Y S I A
B E R H A D
CARING FOR CUSTOMERS
16 May 2001
TMnet reaffirmed its position as the leading Internet Service Provider (ISP)
in the country when its subscriber base passed the one million
customer mark. The lucky one millionth customer was honoured
in a ceremony at Menara Kuala Lumpur. Launched in July 1996,
TMnet saw its customer base grew by leaps and bounds, and by
the third year of operations, became the country’s largest ISP
with more than 350,000 customers. In addition to providing basic
Internet access, TMnet also introduced various multimedia-related
services, including TMnet EastGate, Netmyne, BlueHyppo.com
and TMnet Streamyx.
18 May 2001
Customers can now make free calls with the TMFreeWay service. In exchange
for listening to 15-20 seconds of advertisement, the customer is
entitled to 2 minutes of complimentary talk time, which would translate
into tremendous savings. During the trial run, the service attracted
some 50,000 subscribers. The number is expected to increase to
300,000 by year-end.
15 June 2001
In an effort to boost customer service, Telekom Malaysia’s
Customer Assistance Service Division (CAS) conducted
a three-month campaign to enhance the quality of
service rendered by its Customer Service Assistants in
Call Centres nationwide. CAS operates 4 categories of
call centres, namely the Directory Information Centre
(103), International, Domestic and Emergency Centres
(108, 101 and 999), Sales and Service Centres (1050)
and Teleservices Centres (104 and 1-800-88-8000).
177
16 August 2001
Telekom Malaysia awarded Motorola Inc. (NYSE:MOT), a three-year contract
valued at RM551 million, to deploy a nationwide Code Division
Multiple Access (CDMA) 2000 1X network. The contract is for the
setting up of a CDMA network, which converges fixed wireless,
mobile and Internet services. Investment by Telekom Malaysia in
CDMA is a step towards narrowing the digital divide between the rural
and urban areas.
The signing ceremony was witnessed by Y.B. Datuk Amar Leo Moggie, Minister
of Energy, Communications and Multimedia.
Corporate &
Social
Responsibilities
20 August 2001
Telekom Malaysia today launched its TMWiLL – Wireless in Local Loop Service
in Kampung Tarat Mawang, Serian, Sarawak. Y.B. Tan Sri Datuk (Dr.)
Alfred Jabu Anak Numpang, Deputy Chief Minister of Sarawak, who
is also the Minister of Rural and Land Development, Sarawak,
officiated at the launch. TMWiLL is one of the Company’s latest
wireless technologies, which utilises radio frequencies for
communication purposes including telephony, facsimile, data and
Internet. The service is connected to the PSTN network nationwide.
15 September 2001
Telekom Malaysia’s “Hello & Menang” Sejuta Contest received tremendous response. More than 600,000 entries
were received from customers of Telekom Malaysia’s residential fixed lines, TMTOUCH, TMnet, Telecard,
purchasers of iTalk Cards, Ring-Ring Card, Kadfon and those who purchased telecommunication facilities
from Telekom Malaysia outlets all over Malaysia. Entries were also received from new subscribers of
residential fixed line services, value-added services and TMClip services. Telekom Malaysia awarded a
total of 2001 great prizes to the winners. The grand prize was a cash reward of RM100,000 and 1 million
RealRewards gift points. The lucky winner of the grand prize was Che Puteh binti Md. Noor. Y.Bhg. Dato’
Dr. Abdul Rahim Haji Daud, Deputy Chief Executive presented the prizes to all the lucky winners.
178
T E L E K O M
M A L A Y S I A
B E R H A D
CARING FOR THE COMMUNITY
9 January 2001
Telekom Malaysia continued its noble tradition of providing assistance
to pilgrims by contributing 50,000 sets of bags, water bottles,
shoe bags, face towels and luggage tags, valued at
RM611,700. In addition, the Company also provided the
Malaysia Direct service for the convenience of pilgrims. The
service, which has been provided since 1995, enables
pilgrims to call home with call charges being borne by the
local number dialled.
20 March 2001
Telekom Malaysia contributed RM365,000 towards the Telekanser 2001
Programme managed by Majlis Kanser Nasional (MAKNA). Telekanser
2001 was launched by His Majesty the late Yang di-Pertuan Agong. As
the main sponsor for telecommunications facilities, the Company
provided 30 Toll Free Lines, web hosting for MAKNA’s homepage and
the required technical assistance for the duration of the programme.
10 April 2001
MTN Networks, a wholly-owned subsidiary of Telekom
Malaysia in Sri Lanka, was awarded the
prestigious GSM Association World Award at
the GSM Association World Congress held
in Cannes, France. MTN Networks won the
“GSM in the Community” category. Through
a groundbreaking and unique community
initiative – the “CHANGE” scheme – the
Company beat 139 other contenders for the
award. The scheme enables MTN Networks
subscribers to donate a portion of the cost
of every call to a fund, which in turn is
matched and thereby doubled by MTN
Networks. The fund will be used to address
pressing community problems.
1 October 2001
The Telekasih Infoline was launched at Sunway Lagoon Resort Hotel by
Y.A.B. Dato’ Seri Abdullah Ahmad Badawi, Deputy Prime
Minister. The Telekasih programme, initiated by the Nanyang
Press Fund, aims to raise funds for the setting up of a
dialysis centre in Setapak as well as provide assistance to
the disabled, orphans and less fortunate members of society.
Telekom Malaysia’s sponsorship of the 600-86-7722 Infoline
is valued at RM100,000. With this contribution, the Company
has again played its social role as a caring corporate citizen.
179
13 October 2001
The Paya Indah Wetlands was officially launched by the Prime Minister
Y.A.B. Dato Seri Dr. Mahathir Mohamad on 13 October 2001.
Telekom Malaysia presented a ‘Mock-Cheque’ for RM750,000, as
sponsorship for the management and upkeep of the four
hippopotami imported from Botswana for the Paya Indah
Wetlands. The sponsorship is for a period of three years. The
hyppo is the mascot for Telekom Malaysia’s Lifestyle Portal,
BlueHyppo.com.
With this sponsorship, Telekom Malaysia has moved to the
forefront as a conscientious corporate citizen supporting and
contributing towards the conservation of the environment and
eco-systems in the country.
19 October 2001
Telekom Malaysia contributed RM50,000 worth of in kind contribution to
the Malaysian Paralympic Council (MPC) for the 1st Asean Para
Games held from 25 October to 30 October 2001 at the Bukit
Jalil National Stadium. As the sponsor of telecommunication
facilities, Telekom Malaysia provided telephone, fax and Internet
lines, ISDN Lines, walkie-talkies and trunk radio in support of
the Games. Six categories of disabled athletes participated in
the Games. Telekom Malaysia as a caring corporate citizen,
mindful of its social responsibilities, constantly makes
contributions to the community in the areas of sports, welfare,
education and social development.
30 November 2001
Kelab Telekom Malaysia together with ‘Badan Kebajikan Islam Telekom
Malaysia’ (BAKIT) held a Majlis Berbuka Puasa for one hundred and
eighty orphans from Ampang, Segambut, Ulu Langat at Telekom
Training College. The main objective of this “Berbuka Puasa” was to
share the spirit of Ramadhan with orphans. Y.Bhg. Dato’ Dr. Abdul
Rahim Hj. Daud, Deputy Chief Executive, joined in the breaking of fast
with the orphans and handed out gifts to them. The gifts were
sponsored by Telekom Malaysia, TMTOUCH, TMnet, Menara Kuala
Lumpur and Utusan Malaysia. Y.Bhg. Dato’ Dr. Abdul Rahim also
presented a cheque worth RM43,000 as Telekom Malaysia’s Wilayah
Persekutuan and Selangor business tithe.
7 December 2001
Telekom Malaysia organised a “Majlis Berbuka Puasa” with
members of the media at The Legend Hotel, Kuala
Lumpur. 120 representatives from all local media and
Telekom Malaysia’s top management were present.
The event was held to enhance rapport between
Telekom Malaysia and the media.
No borders.
No class distinctions.
Only communication solutions
to benefit you...
... you and you.
Reaching Out, To You
We're there in the remotest villages.
Where there are
no roads for access.
We're there in the
largest cities.
where the roads are filled with traffic.
We're there to
keep you connected.
One to one. Moment to moment. Virtually anywhere.
You'll never have a problem reaching out
because we are,
and always will be... here for you.
182
FINANCIAL
statements
Directors’ Report
183
Significant Accounting Policies
188
Income Statements
193
Balance Sheets
194
Consolidated Statement of
Changes in Equity
195
Statement of Changes in Equity
196
Cash Flow Statements
197
Notes to the Financial Statements
198
Statement by Directors
229
Statutory Declaration
229
Report of the Auditors
230
General Information
231
183
Directors’ Report
for the year ended 31 December 2001
T E L E K O M
1.
M A L A Y S I A
B E R H A D
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 2001.
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 have been no significant change in the nature of these activities during the year.
RESULTS
3.
4.
The results of the operations of the Group and of the Company for the year are as follows:
The Group
RM million
The Company
RM million
Profit after taxation
Minority interest
1,835.8
(23.9)
858.6
—
Profit for the year attributable to shareholders
1,811.9
858.6
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 2000, 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
15 June 2001:
– as provided in the financial statements for the year ended 31 December 2000
– over-provision
223.2
(0.8)
222.4
(b)
In respect of the year ended 31 December 2001,
– a proposed final gross dividend of 10.0 sen per share less tax of 28%
– a proposed special gross dividend of 5.0 sen per share less tax of 28%
228.8
114.4
343.2
184
Directors’ Report
T E L E K O M
M A L A Y S I A
B E R H A D
EMPLOYEES’ SHARE OPTION SCHEME (ESOS)
6.
The existing Employees’ Share Option Scheme (ESOS 2) of the Company was approved by the shareholders
at an Extraordinary General Meeting held on 28 March 1997. On 6 October 1997, options to subscribe for
2,782,000 and 217,704,000 ordinary shares of RM1 each at the exercise price of RM7.80 and RM10.50 per
share respectively were granted to eligible Executives and Non-Executives (referred to as ESOS 2, phase 1).
The unexercised options with exercise price of RM7.80 per share has lapsed in November 1999.
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 at an exercise price of RM8.53 per share (referred to as ESOS 2, phase 2).
The principle features of ESOS 2 are as follows:
(a)
The eligibility for participation in ESOS is at the discretion of the Option Committee as appointed by the
Board of Directors.
(b)
The total number of shares to be offered shall not exceed 10% of the issued share capital of the
Company.
(c)
No option shall be granted for less than 1,000 shares nor more than 330,000 shares unless so adjusted
pursuant to item (e) 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)
In the event of any alteration in capital structure of the Company during the option period which expires
on 15 April 2002, 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 2001, options to subscribe for 127,080,000 and 74,827,000 ordinary shares of RM1 each
at the option price of RM10.50 and RM8.53 per share respectively under ESOS 2 remained unexercised. These
options remain in force until 15 April 2002. These options granted do not confer any right to participate in any
share issue of any other company.
SHARE CAPITAL
7.
During the year, the issued and fully paid-up share capital of the Company was increased by the issuance of
1,520,500 and 14,656,000 ordinary shares of RM1 each at the option price of RM10.50 and RM8.53 per share
respectively for cash under ESOS 2. These shares rank "pari-passu" in all respects with the existing issued
ordinary shares of the Company.
CONVERTIBLE BONDS
8.
As at 31 December 2001, the Company has USD359.9 million Convertible Bonds due 2004 outstanding. 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 and 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. 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.
185
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 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 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
Ir. Prabahar N. K. Singam
Lim Kheng Guan
Rosli bin Man
Tan Poh Keat
Alternate Directors
186
Directors’ Report
T E L E K O M
M A L A Y S I A
B E R H A D
DIRECTORS (Continued)
16. In accordance with Article 103 of the Company’s Articles of Association, the following Directors retire from the
Board at the Seventeenth Annual General Meeting and being eligible offers 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
1.1.2001
Bought
Sold 31.12.2001
– Direct
– Direct
– Direct
– Indirect (shares held by spouse)
Tan Poh Keat
– Direct
– Direct
123,500
—
—
123,500
12,000
—
—
12,000
15,000
1,500
—
—
—
—
15,000
1,500
15,000
—
—
15,000
—
200,000
—
200,000*
* Options exercised during the year
Number of options over ordinary shares
of RM1 each
Balance at
Balance at
1.1.2001
Granted
Exercised 31.12.2001
—
—
200,000
130,000
200,000
—
—
130,000
18. 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.
187
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 2.
AUDITORS
21. The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.
In accordance with a resolution of the Board of Directors dated 26 February 2002.
DATO’ IR. MUHAMMAD RADZI BIN HAJI MANSOR
Chairman
DATO’ DR. MD KHIR BIN ABDUL RAHMAN
Chief Executive
188
T E L E K O M
M A L A Y S I A
B E R H A D
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.
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 take into account any deviation from the Group’s
accounting policies.
189
4.
GOODWILL
Goodwill represents the excess of the purchase price over the Group’s share of the fair value of the separable
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.
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.
(iii)
Impairment
Where an indication of impairment exist, 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.
6.
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.
190
T E L E K O M
7.
M A L A Y S I A
B E R H A D
INCOME RECOGNITION
Operating income represents revenue earned from the sale of products and services net of returns, duties, sales
discounts and sales taxes paid, and 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.
Interest income includes interest from deposits with licensed banks, finance companies and other financial
institutions and is recognised on an accrual basis.
8.
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.
9.
TRADE RECEIVABLES
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.
10. INVESTMENTS
Investments in subsidiary and associated companies, 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.
11. 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.
191
12. 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.
13. 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.
14. FINANCIAL DERIVATIVE HEDGING INSTRUMENTS
Financial derivative hedging instruments are used in the Company’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. 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. No amounts are recognised in respect of future periods.
15. RETIREMENT BENEFIT
The Company had an approved retirement benefit trust fund in respect of the defined retirement benefits for
eligible employees under the Telekom Malaysia Retirement Benefit Scheme (‘Scheme’). The fund was valued
every three years by a professionally qualified independent actuary who will also recommend the rates of
contribution payable.
The cost of providing retirement benefits was charged to the Income Statement on a systematic basis, so as
to be sufficient to meet the liability of the Scheme over the future working lives of the existing employees.
192
T E L E K O M
M A L A Y S I A
B E R H A D
15. RETIREMENT BENEFIT (continued)
The Scheme was discontinued with effect from 31 December 2000. The total estimated retirement benefit
liabilities over and above the value of assets held in the retirement benefit trust fund are provided for.
With effect from 1 January 2001, contributions towards retirement benefits are made through additional payment
to the Employees Provident Fund and are charged to the Income Statement in the period in which they arise.
16. 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 Statement 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.
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 used in translation (units of Malaysian Ringgit per foreign currency) are as follows:
Foreign Currency
2001
2000
Foreign Currency
2001
2000
US Dollar
RM3.80000
RM3.80000
Thai Baht
RM0.08595
RM0.08721
Japanese Yen
RM0.02885
RM0.03316
Ghanaian Cedi
RM0.00054
RM0.00055
Deutsche Mark
RM1.73060
RM1.83825
Guinea Franc
RM0.00194
RM0.00202
Canadian Dollar
RM2.38650
RM2.53815
Malawi Kwacha
RM0.05735
RM0.04744
Pound Sterling
RM5.52558
RM5.67530
Sri Lanka Rupee
RM0.04093
RM0.04585
Bangladesh Taka
RM0.06702
RM0.07036
South African Rand
RM0.31746
RM0.50258
17. 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.
These accounting policies form an integral part of the financial statements set out on pages 193 to 228.
193
Income Statements
T E L E K O M
M A L A Y S I A
The Group
All amounts are in millions unless
Note
otherwise stated
B E R H A D
The Company
2001
2000
2001
2000
RM
RM
RM
RM
OPERATING INCOME
2
9,673.2
8,815.7
7,907.8
7,676.4
OPERATING COSTS
3
(7,839.3)
(7,389.4)
(6,365.7)
(7,026.6)
1,833.9
1,426.3
1,542.1
649.8
137.0
79.4
305.9
253.5
1,970.9
1,505.7
1,848.0
903.3
(398.9)
(432.1)
(452.5)
(462.1)
OPERATING PROFIT
OTHER OPERATING INCOME
4
OPERATING PROFIT BEFORE FINANCE COST
NET FINANCE COST
5
– share of profits less losses
– profit on disposal
PROFIT BEFORE TAXATION
43.8
(20.2)
—
—
827.8
197.4
—
158.9
2,443.6
1,250.8
1,395.5
600.1
TAXATION
– the Company and subsidiary companies
6
(569.3)
(506.9)
(536.9)
(472.1)
– share of taxation of associated companies
6
(38.5)
(46.1)
—
—
1,835.8
697.8
858.6
128.0
(23.9)
7.4
—
—
1,811.9
705.2
858.6
128.0
PROFIT AFTER TAXATION
MINORITY INTERESTS
PROFIT FOR THE YEAR ATTRIBUTABLE
TO SHAREHOLDERS
EARNINGS PER SHARE (sen)
– basic
7
58.6
22.9
– diluted
7
58.4
22.7
– 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 188 to 192 and
the Notes to the Financial Statements on pages 198 to 228.
Report of the Auditors – Page 230.
194
Balance Sheets
T E L E K O M
as at 31 December 2001
M A L A Y S I A
B E R H A D
otherwise stated
SHARE CAPITAL
SHARE PREMIUM
RESERVES
Note
9
The Group
2001
2000
RM
RM
The Company
2001
2000
RM
RM
3,103.5
2,065.0
9,655.4
3,087.3
1,940.3
8,394.9
3,103.5
2,065.0
11,452.1
3,087.3
1,940.3
10,935.9
14,823.9
175.8
13,422.5
157.3
16,620.6
—
15,963.5
—
1,358.2
5,349.8
690.2
26.9
318.7
1,354.8
6,209.1
676.5
15.3
276.7
1,358.2
5,493.0
614.3
—
317.4
1,354.8
6,251.4
613.0
—
275.7
7,743.8
8,532.4
7,782.9
8,494.9
22,743.5
22,112.2
24,403.5
24,458.4
16
17
18
19
20
18,926.7
—
1,066.5
105.5
657.8
18,706.0
—
1,259.7
144.7
640.9
16,010.8
4,891.6
22.0
98.3
657.0
16,236.3
5,739.8
44.6
139.1
640.9
21
22
23
24
153.4
3,735.6
222.5
2,520.1
156.4
3,977.3
166.2
2,215.7
95.5
3,535.2
222.5
2,110.5
108.0
3,606.9
166.2
1,929.6
6,631.6
6,515.6
5,963.7
5,810.7
3,268.5
366.7
666.2
343.2
3,165.4
872.1
894.0
223.2
2,249.9
4.6
642.2
343.2
2,387.6
667.1
875.1
223.2
CURRENT LIABILITIES
4,644.6
5,154.7
3,239.9
4,153.0
NET CURRENT ASSETS
1,987.0
1,360.9
2,723.8
1,657.7
22,743.5
22,112.2
24,403.5
24,458.4
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
Proposed dividend
25
12
The above Balance Sheets are to be read in conjunction with the Significant Accounting Policies on pages 188 to 192 and the
Notes to the Financial Statements on pages 198 to 228.
195
Consolidated Statement of Changes in Equity
T E L E K O M
otherwise stated
Issued and Fully Paid
of RM1 each
Non-distributable
Special Share*/Ordinary Shares
Number
Nominal
Note
of Shares
Value
RM
At 1 January 2000
M A L A Y S I A
B E R H A D
Distributable
Share
Premium
RM
Exchange
Fluctuation
Reserve
RM
Retained
Profits
RM
Total
RM
3,028.2
3,028.2
1,378.3
(56.6)
8,093.4
12,443.3
Goodwill written-off
– associated companies
Exchange Fluctuation Reserve
—
—
—
—
—
—
—
(117.6)
(3.4)
—
(3.4)
(117.6)
Net loss not recognised in
income statement
—
—
—
(117.6)
(3.4)
(121.0)
Profit for the year
—
—
—
—
705.2
705.2
—
—
—
—
—
—
—
—
(2.9)
(223.2)
(2.9)
(223.2)
—
—
—
—
(226.1)
(226.1)
59.1
59.1
562.0
—
—
621.1
At 31 December 2000
3,087.3
3,087.3
1,940.3
(174.2)
8,569.1
13,422.5
At 1 January 2001
3,087.3
3,087.3
1,940.3
(174.2)
8,569.1
13,422.5
Exchange Fluctuation Reserve
—
—
—
(209.0)
—
(209.0)
Net loss not recognised in
income statement
—
—
—
(209.0)
—
(209.0)
Profit for the year
—
—
—
—
1,811.9
1,811.9
—
—
—
—
—
—
—
—
0.8
(343.2)
0.8
(343.2)
—
—
—
—
(342.4)
(342.4)
16.2
16.2
124.7
—
—
140.9
3,103.5
3,103.5
2,065.0
(383.2)
10,038.6
14,823.9
Dividends for year ended
– 31.12.1999 (under provision)
– 31.12.2000
8
8
Issue of shares
– exercise of share options
Dividends for year ended
– 31.12.2000 (over provision)
– 31.12.2001
Issue of shares
At 31 December 2001
*
8
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 Consolidated Statement of Changes in Equity is to be read in conjunction with the Significant Accounting Policies on
pages 188 to 192 and the Notes to the Financial Statements on pages 198 to 228.
196
Statement of Changes in Equity
T E L E K O M
M A L A Y S I A
B E R H A D
otherwise stated
Issued and Fully Paid
Non-
of RM1 each
distributable
Distributable
Special Share*/Ordinary Shares
Note
At 1 January 2000
Profit for the year
Number
Nominal
Share
Retained
of Shares
Value
Premium
Profits
Total
RM
RM
RM
RM
3,028.2
3,028.2
1,378.3
11,034.0
15,440.5
—
—
—
128.0
128.0
Dividends for the year ended
– 31.12.1999 (under provision)
8
—
—
—
(2.9)
(2.9)
– 31.12.2000
8
—
—
—
(223.2)
(223.2)
—
—
—
(226.1)
(226.1)
59.1
59.1
562.0
—
621.1
At 31 December 2000
3,087.3
3,087.3
1,940.3
10,935.9
15,963.5
At 1 January 2001
3,087.3
3,087.3
1,940.3
10,935.9
15,963.5
—
—
—
858.6
858.6
Issue of shares
Profit for the year
Dividends for the year ended
– 31.12.2000 (over provision)
8
—
—
—
0.8
0.8
– 31.12.2001
8
—
—
—
(343.2)
(343.2)
—
—
—
(342.4)
(342.4)
16.2
16.2
124.7
—
140.9
3,103.5
3,103.5
2,065.0
11,452.1
16,620.6
Issue of shares
At 31 December 2001
*
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 188 to 192
and the Notes to the Financial Statements on pages 198 to 228.
197
Cash Flow Statements
T E L E K O M
The Group
Note
otherwise stated
M A L A Y S I A
B E R H A D
The Company
2001
2000
2001
2000
RM
RM
RM
RM
CASH FLOWS FROM OPERATING ACTIVITIES
26
3,283.2
2,964.9
2,749.2
2,907.0
CASH FLOWS USED IN INVESTING ACTIVITIES
27
(1,688.6)
(2,511.7)
(1,168.0)
(2,947.2)
CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES
28
(1,285.8)
732.0
(1,400.3)
1,073.5
308.8
1,185.2
180.9
1,033.3
(4.4)
(6.1)
—
—
2,215.7
1,036.6
1,929.6
896.3
2,520.1
2,215.7
2,110.5
1,929.6
NET INCREASE IN CASH AND CASH EQUIVALENTS
EFFECT OF EXCHANGE RATE CHANGES
CASH AND CASH EQUIVALENTS AT BEGINNING
OF THE YEAR
CASH AND CASH EQUIVALENTS AT END
OF THE YEAR
24
The above Cash Flow Statements are to be read in conjunction with the Significant Accounting Policies on pages 188 to 192 and
the Notes to the Financial Statements on pages 198 to 228.
198
T E L E K O M
M A L A Y S I A
B E R H A D
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
2001
2000
RM
RM
The Company
2001
2000
RM
RM
Calls/Usage
Business
Residential
Mobile
2,866.8
2,027.7
1,166.9
2,888.8
1,955.7
634.0
2,767.2
1,984.6
336.1
2,692.2
1,927.2
280.4
Sub Total
6,061.4
5,478.5
5,087.9
4,899.8
513.3
745.6
349.1
474.5
759.9
215.6
517.1
744.0
4.0
494.1
758.3
4.1
1,608.0
1,450.0
1,265.1
1,256.5
Others
Business
Residential
Mobile
81.7
84.3
159.5
84.9
70.4
132.5
93.2
84.0
7.8
79.3
70.4
2.6
Sub Total
325.5
287.8
185.0
152.3
Total
Business
Residential
Mobile
3,461.8
2,857.6
1,675.5
3,448.2
2,786.0
982.1
3,377.5
2,812.6
347.9
3,265.6
2,755.9
287.1
Total Telephone
7,994.9
7,216.3
6,538.0
6,308.6
809.6
153.3
297.8
417.6
820.4
98.8
234.0
446.2
1,008.0
144.9
216.9
—
1,086.2
95.7
185.9
—
Total Non-Telephone
1,678.3
1,599.4
1,369.8
1,367.8
TOTAL OPERATING INCOME
9,673.2
8,815.7
7,907.8
7,676.4
Rentals
Business
Residential
Mobile
Sub Total
Data services
Internet and Multimedia
Other telecommunication related services
Non-telecommunication related services
Non-telecommunication related services are mainly from subsidiary companies with core business in consultancy, property
management, education, printing and publication of telephone directories and others as disclosed in note 17 to the financial
statements.
199
3.
OPERATING COSTS
The Group
2001
2000
RM
RM
The Company
2001
2000
RM
RM
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
Allowance for loans/advances to subsidiary companies
Bad and doubtful debts
Charges and commission
Depreciation of property, plant and equipment
Domestic and international outpayment
Investment in subsidiary companies written-down
Manpower
Maintenance
Net loss/(gain) on foreign exchange – Realised
Net gain on foreign exchange – Unrealised
Property, plant and equipment written-off
Rental of land and buildings
Rental expenses – Others
Rental of equipment
Retirement benefits (sub-note a)
Research and development (sub-note b)
Supplies and inventories
Trade receivables owing by subsidiary companies written-off
Utilities
Other operating costs
84.3
20.3
304.0
—
—
20.3
—
—
12.6
—
869.5
215.0
2,377.6
1,032.2
—
1,216.9
326.7
1.7
(79.3)
9.5
109.0
89.6
20.3
60.9
—
324.7
—
167.9
979.9
77.7
—
486.4
155.9
2,480.9
782.2
—
1,021.3
279.8
(12.9)
(45.0)
43.9
87.0
89.6
30.8
162.0
—
385.5
—
151.6
908.7
12.6
406.1
423.1
84.4
2,087.2
1,014.9
—
972.1
242.3
(0.4)
(103.5)
4.7
102.2
80.1
26.1
60.2
24.3
241.3
—
137.8
529.9
77.7
584.2
294.2
57.5
2,155.4
811.8
457.1
842.9
200.8
(13.0)
(53.7)
36.1
100.9
82.3
24.4
160.7
—
261.7
335.5
131.6
478.5
TOTAL OPERATING COSTS
7,839.3
7,389.4
6,365.7
7,026.6
The Group
2001
2000
RM
RM
Other operating costs include:
Audit fees
– current year
– in respect of previous year
Directors of the Company
– fees
– remuneration and other emoluments
Former Directors of the Company
– fees
– remuneration and other emoluments
– ex-gratia
The Company
2001
2000
RM
RM
1.1
—
1.1
0.2
0.4
—
0.4
0.1
0.3
0.9
0.3
0.5
0.2
0.8
0.3
0.5
—
—
—
0.2
0.1
0.3
—
—
—
0.1
0.1
0.3
200
T E L E K O M
3.
M A L A Y S I A
B E R H A D
OPERATING COSTS (continued)
(a)
The retirement benefit charge for the current year represents the difference in the total estimated retirement benefit
liabilities over the value of assets held in the retirement benefit trust fund.
(b)
In year 2000, the research and development activities were carried out by a division of the Company. Therefore, the
research and development cost of RM5.9 million were reflected in the respective category of operating costs. In the
current year, the research and development cost was in the form of a grant to a wholly owned subsidiary company.
(c)
Estimated money value of benefits of Directors amounted to RM57,600 (2000: RM38,193) for the Group and Company.
Estimated money value of benefits of a former Director amounted to RM Nil (2000: RM7,000) for the Group and Company.
(d)
Options granted to Executive Directors of the Company pursuant to Employees’ Share Option Scheme (ESOS 2) during
the year are as follows:
Granted during
Unexercised options
the year ended
at year end
31.12.2001
31.12.2001
200,000
—
130,000
130,000
The options were given to these Directors on the same terms and conditions as those offered to other employees of
the Company (Note 9(c)).
4.
OTHER OPERATING INCOME
The Group
The Company
2001
2000
2001
2000
RM
RM
RM
RM
Rental income from buildings
6.0
7.5
14.4
21.2
Profit/(loss) on disposal of short term investments
(2.3)
2.2
(2.3)
2.2
Profit/(loss) on partial disposal of subsidiary companies
8.7
—
(1.5)
—
7.4
Sale of scrap stores
5.0
7.4
4.9
26.0
—
27.5
—
Income from investment in International Satellite Organisations
5.4
10.6
5.4
10.6
Rental income from vehicles
1.2
0.2
3.2
3.8
Profit on disposal of property, plant and equipment
Dividend income from subsidiary companies
—
—
34.7
15.2
Dividend income from quoted shares
2.6
1.5
2.3
1.5
Dividend income from unquoted shares
1.1
1.5
1.1
1.5
—
—
153.4
136.9
83.3
48.5
62.8
53.2
137.0
79.4
305.9
253.5
Interest from subsidiary companies
Others
TOTAL OTHER OPERATING INCOME
201
5.
NET FINANCE COST
Foreign
RM
2001
Domestic
RM
Total
RM
Foreign
RM
2000
Domestic
RM
Total
RM
Finance cost in respect of:
Borrowings
Convertible Bonds
Others
335.7
54.7
—
161.4
—
—
497.1
54.7
—
322.8
54.7
2.9
164.1
—
8.1
486.9
54.7
11.0
Total finance cost
Interest income
390.4
—
161.4
(99.3)
551.8
(99.3)
380.4
—
172.2
(90.5)
552.6
(90.5)
NET FINANCE COST OF
THE COMPANY
390.4
62.1
452.5
380.4
81.7
462.1
5.9
(0.8)
(50.4)
(8.3)
(44.5)
(9.1)
8.3
(7.2)
(25.1)
(6.0)
(16.8)
(13.2)
395.5
3.4
398.9
381.5
50.6
432.1
Finance cost of subsidiary companies
Interest income of subsidiary companies
TOTAL NET FINANCE COST OF
THE GROUP
6.
TAXATION
The Group
2001
2000
RM
RM
The Company
2001
2000
RM
RM
551.8
0.1
2.5
488.5
0.9
5.4
536.9
—
—
472.1
—
—
554.4
494.8
536.9
472.1
5.9
(0.4)
9.4
12.1
—
—
—
—
—
—
—
—
14.9
12.1
—
—
569.3
38.5
506.9
46.1
536.9
—
472.1
—
607.8
553.0
536.9
472.1
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
Share of taxation of associated companies
TOTAL TAXATION
202
T E L E K O M
6.
M A L A Y S I A
B E R H A D
TAXATION (continued)
The effective rate of taxation for the Company is higher than the statutory rate principally due to non-tax deductible expenses.
The effective rate of taxation for the Group is lower than the statutory rate principally due to profit on disposal of an associated
company which was not taxable.
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
2001
2000
Net profit attributable to shareholders (RM million)
1,811.9
705.2
Weighted average number of ordinary shares in issue (million)
3,091.6
3,072.9
58.6
22.9
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 and ESOS 2,
Phase 1 are not included as they are non-dilutive potential ordinary shares for financial year ended 31 December 2001.
They are deemed non-dilutive since the respective exercise price is higher than the fair value of the Company’s share
for the financial year ended 31 December 2001.
For ESOS 2, Phase 2, 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
2001
2000
Net profit attributable to shareholders (RM million)
1,811.9
705.2
Weighted average number of ordinary shares in issue (million)
Adjustment for ESOS 2, Phase 2 (2000: ESOS 2, Phase 1) (million)
3,091.6
11.3
3,072.9
30.7
Weighted average number of ordinary shares for diluted earnings per share (million)
3,102.9
3,103.6
58.4
22.7
Diluted earnings per share (sen)
203
8.
DIVIDENDS
The Company
2001
2000
RM
RM
9.
Proposed final gross dividend of 10.0 sen per share less tax of 28%
(2000: 10.0 sen per share less tax of 28%)
Proposed special gross dividend of 5.0 sen per share less tax of 28% (2000: Nil)
Dividend (over)/under provided in respect of prior year
228.8
114.4
(0.8)
223.2
—
2.9
TOTAL DIVIDENDS
342.4
226.1
SHARE CAPITAL
The Company
2001
2000
RM
RM
Authorised:
Ordinary shares of RM1 each
Special share of RM1 (sub-note a)
5,000.0
—
5,000.0
—
Issued and fully paid:
Ordinary shares of RM1 each
Special share of RM1 (sub-note a)
3,103.5
—
3,087.3
—
TOTAL ISSUED AND FULLY PAID-UP SHARE CAPITAL
3,103.5
3,087.3
(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.
(b)
During the year, the issued and fully paid-up share capital of the Company was increased by the issuance of 1,520,500
and 14,656,000 ordinary shares of RM1 each at the option price of RM10.50 and RM8.53 per share respectively for cash
under ESOS 2. These shares rank “pari-passu” in all respects with the existing issued ordinary shares of the Company.
204
T E L E K O M
9.
M A L A Y S I A
B E R H A D
SHARE CAPITAL (continued)
(c)
ESOS
The existing Employees’ Share Option Scheme (ESOS 2) of the Company was approved by the shareholders at an
Extraordinary General Meeting held on 28 March 1997. On 6 October 1997, options to subscribe for 2,782,000 and
217,704,000 ordinary shares of RM1 each at the exercise price of RM7.80 and RM10.50 per share respectively were
granted to eligible Executives and Non-Executives (referred to as ESOS 2, phase 1). The unexercised options with
exercise price of RM7.80 per share has lapsed in November 1999.
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 at an exercise price of RM8.53 per share (referred to as ESOS 2, phase 2).
The principal features of ESOS 2 are summarised in paragraph 6 of the Directors’ Report.
The movement during the year in the number of options over the shares of the Company are as follows:
Phase 2
2001
Million
2001
Million
Phase 1
2000
Million
The Company
At 1 January
Offerred
Exercised
Lapsed
—
89.5
(14.7)
—
128.6
—
(1.5)
—
190.9
—
(59.1)
(3.2)
At 31 December
74.8
127.1
128.6
At 31 December 2001, options to subscribe for 127,080,000 and 74,827,000 ordinary shares of RM1 each at the option
price of RM10.50 and RM8.53 per share respectively under ESOS 2 remained unexercised. These options remains in force
until 15 April 2002. These options granted do not confer any right to participate in any share issue of any other company.
10.
RESERVES
The Group
2001
2000
RM
RM
Retained Profits
Exchange Fluctuation Reserves arising from translation
of foreign subsidiary/associated companies
TOTAL RESERVES
The Company
2001
2000
RM
RM
10,038.6
8,569.1
11,452.1
10,935.9
(383.2)
(174.2)
—
—
9,655.4
8,394.9
11,452.1
10,935.9
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 2001 to
frank the payment of net dividends of approximately RM8,422.1 million (2000: RM7,411.6 million) out of total distributable reserves
of RM11,452.1 million (2000: RM10,935.9 million) without incurring additional taxation.
205
11.
CONVERTIBLE BONDS
(a)
Convertible Bonds represent USD359.9 million (2000: USD359.9 million) Convertible Eurobonds due 2004.
(b)
The principle features of the Eurobonds are as follows:
(c)
12.
(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 installments 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)
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.
BORROWINGS
2001
2000
Weighted
Average
Rate of
Finance
Total
RM
Weighted
Average
Rate of
Finance
Long
Term
RM
Short
Term
RM
Long
Term
RM
Short
Term
RM
Total
RM
6.65%
100.4
2.7
103.1
6.69%
238.5
9.4
247.9
—
—
—
—
11.66%
18.6
41.1
59.7
6.65%
100.4
2.7
103.1
7.66%
257.1
50.5
307.6
4.42%
686.4
349.3
1,035.7
4.29%
817.3
350.6
1,167.9
5.69%
—
489.0
—
6.6
—
495.6
—
4.50%
7.87%
—
400.0
7.2
455.5
7.2
855.5
4.83%
1,175.4
355.9
1,531.3
5.80%
1,217.3
813.3
2,030.6
4.95%
1,275.8
358.6
1,634.4
6.04%
1,474.4
863.8
2,338.2
THE GROUP
DOMESTIC
Secured
– Cagamas Loans
(sub-note a)
– Borrowings under
Islamic Banking
facilities
Unsecured
– Borrowings from
financial institutions
Islamic Banking
facilities
– Other borrowings
Total Domestic
206
T E L E K O M
12.
M A L A Y S I A
B E R H A D
BORROWINGS (continued)
2001
2000
Weighted
Average
Rate of
Finance
Total
RM
Weighted
Average
Rate of
Finance
Long
Term
RM
Short
Term
RM
Long
Term
RM
Short
Term
RM
Total
RM
6.54%
67.7
—
67.7
6.57%
61.6
—
61.6
3.83%
8.4
6.2
14.6
4.20%
14.4
6.1
20.5
6.06%
76.1
6.2
82.3
5.98%
76.0
6.1
82.1
7.32%
2,623.0
—
2,623.0
7.45%
3,031.8
—
3,031.8
5.48%
1,343.1
—
1,343.1
8.29%
1,375.8
—
1,375.8
—
5.26%
—
31.8
—
1.9
—
33.7
8.60%
2.76%
228.0
23.1
—
2.2
228.0
25.3
6.69%
3,997.9
1.9
3,999.8
7.73%
4,658.7
2.2
4,660.9
Total Foreign
6.67%
4,074.0
8.1
4,082.1
7.70%
4,734.7
8.3
4,743.0
TOTAL BORROWINGS
6.18%
5,349.8
366.7
5,716.5
7.15%
6,209.1
872.1
7,081.2
THE GROUP
FOREIGN
Secured
– Borrowings from
(sub-note b)
(sub-note b)
Unsecured
– Notes and Debentures
(sub-note c)
– Borrowings from
Islamic Banking
facilities
Domestic
RM
2001
Foreign
RM
Total
RM
Domestic
RM
2000
Foreign
RM
Total
RM
467.5
284.5
—
523.8
1,627.1
1,702.8
1.5
742.6
2,094.6
1,987.3
1.5
1,266.4
808.9
114.1
27.6
523.8
1,835.2
2,154.4
2.5
742.6
2,644.1
2,268.5
30.1
1,266.4
1,275.8
4,074.0
5,349.8
1,474.4
4,734.7
6,209.1
The Group’s long term borrowings
are repayable as follows:
After
After
After
After
one year and up to five years
five years and up to ten years
ten years and up to fifteen years
fifteen years (sub-note d)
207
12.
2001
2000
Weighted
Average
Rate of
Finance
Total
RM
Weighted
Average
Rate of
Finance
Long
Term
RM
Short
Term
RM
Long
Term
RM
Short
Term
RM
Total
RM
6.65%
100.4
2.7
103.1
6.69%
238.5
9.4
247.9
6.65%
100.4
2.7
103.1
6.69%
238.5
9.4
247.9
8.00%
1,000.0
—
1,000.0
7.30%
1,000.0
200.0
1,200.0
5.72%
—
489.0
—
—
—
489.0
—
—
7.87%
—
400.0
—
455.5
—
855.5
7.25%
1,489.0
—
1,489.0
7.54%
1,400.0
655.5
2,055.5
7.21%
1,589.4
2.7
1,592.1
7.45%
1,638.5
664.9
2,303.4
7.32%
2,623.0
—
2,623.0
7.45%
3,031.8
—
3,031.8
5.70%
1,261.2
—
1,261.2
8.48%
1,330.0
—
1,330.0
—
2.65%
—
19.4
—
1.9
—
21.3
8.59%
2.76%
228.0
23.1
—
2.2
228.0
25.3
Total Foreign
6.77%
3,903.6
1.9
3,905.5
7.77%
4,612.9
2.2
4,615.1
TOTAL BORROWINGS
6.90%
5,493.0
4.6
5,497.6
7.67%
6,251.4
667.1
6,918.5
THE COMPANY
DOMESTIC
Secured
– Cagamas Loans
(sub-note a)
Unsecured
– Borrowings from
Islamic Banking
facilities
Total Domestic
FOREIGN
Unsecured
– Notes and Debentures
(sub-note c)
– Borrowings from
Islamic Banking
facilities
208
T E L E K O M
12.
M A L A Y S I A
B E R H A D
Domestic
RM
2001
Foreign
RM
Total
RM
Domestic
RM
2000
Foreign
RM
Total
RM
304.9
284.5
—
1,000.0
1,510.3
1,649.2
1.5
742.6
1,815.2
1,933.7
1.5
1,742.6
496.8
114.1
27.6
1,000.0
1,768.0
2,099.8
2.5
742.6
2,264.8
2,213.9
30.1
1,742.6
1,589.4
3,903.6
5,493.0
1,638.5
4,612.9
6,251.4
THE COMPANY
The Company’s long term borrowings
are repayable as follows:
After
After
After
After
one year and up to five years
five years and up to ten years
ten years and up to fifteen years
fifteen years (sub-note d)
(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. The 2000 comparative figure also included USD100.0 million Guaranteed
Floating Rate Notes due 2006. This Guaranteed Floating Rate Notes with interest during the year ranging from 7.04%
to 9.02% (2000: 8.21% to 9.02%) was prepaid in 2001.
(d)
The Group and the Company have the option to prepay the total domestic loan outstanding of RM523.8 million (2000:
RM523.8 million) and RM1,000.0 million (2000: RM1,000.0 million) respectively in 2004.
(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.
209
12.
(f)
Cross-currency Interest Rate Swap (CCIRS) (continued)
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 dependant 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 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.
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
2001
2000
RM
RM
The Company
2001
2000
RM
RM
Telephone
Data services
Others
648.1
33.3
8.8
634.2
34.8
7.5
578.5
33.3
2.5
575.6
34.8
2.6
TOTAL CUSTOMERS’ DEPOSITS
690.2
676.5
614.3
613.0
Telephone customers’ deposits are subjected to rebate at 5% per annum in accordance with Telephone Regulations, 1996.
210
T E L E K O M
14.
M A L A Y S I A
B E R H A D
DEFERRED TAXATION
The Group
2001
2000
RM
RM
The Company
2001
2000
RM
RM
At 1 January
Transfer from Income Statement
Currency translation differences
15.3
11.9
(0.3)
9.9
5.4
—
—
—
—
—
—
—
At 31 December
26.9
15.3
—
—
The tax effect of timing differences which are expected to continue in the foreseeable future and not provided for at
31 December were:
2001
15.
2000
As at year
end
RM
Arising in
the current
year
RM
As at year
end
RM
128.6
(67.9)
1,502.1
(140.8)
132.6
(13.5)
1,373.5
(72.9)
60.7
1,361.3
119.1
1,300.6
Subsidiary companies
Between depreciation and capital allowances
Unabsorbed tax losses
Other timing differences
(138.1)
(4.9)
(66.0)
(245.7)
(339.6)
(190.2)
(6.6)
(107.8)
(91.1)
(107.6)
(334.7)
(124.2)
NET TAX EFFECT NOT PROVIDED FOR
(148.3)
585.8
(86.4)
734.1
The Company
Between depreciation and capital allowances
Other timing differences
Arising in
the current
year
RM
RETIREMENT BENEFITS
The Group
2001
2000
RM
RM
The Company
2001
2000
RM
RM
At 1 January
Charged to Income Statement
Utilised during the year
276.7
60.9
(18.9)
161.0
162.0
(46.3)
275.7
60.2
(18.5)
160.6
160.7
(45.6)
At 31 December
318.7
276.7
317.4
275.7
The Retirement Benefit Scheme was discontinued with effect from 31 December 2000. The total estimated retirement benefit
liabilities over and above the value of assets held in the retirement benefit trust fund have been provided for.
211
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
1,753.2
(118.1)
(122.2)
1,017.6
115.1
(5.7)
(3.5)
1,795.7
409.9
(4.1)
(1.0)
403.9
10.1
—
—
2,588.0
105.8
(0.3)
—
3,926.1
322.9*
—
—
(17.8)
(3.0)
(0.5)
(1.9)
(2.1)
—
(25.3)
29,247.7
1,120.5
2,200.0
412.1
2,691.4
4,249.0
39,920.7
15,442.0
1,901.8
(111.5)
(114.3)
788.5
105.9
(4.5)
(2.1)
1,329.3
292.7
(4.0)
(0.8)
5.1
0.6
—
—
909.0
76.6
(0.2)
—
—
—
—
—
18,473.9
2,377.6
(120.2)
(117.2)
(5.8)
(2.1)
(0.2)
—
(0.3)
—
(8.4)
17,112.2
885.7
1,617.0
5.7
985.1
—
20,605.7
Impairment
Balance at 1.1.2001
Impairment losses
304.0
84.3
—
—
—
—
—
—
—
—
—
—
304.0
84.3
Balance at 31.12.2001
388.3
—
—
—
—
—
388.3
12,006.6
1,753.2
(1,901.8)
(6.6)
(7.9)
(84.3)
229.1
115.1
(105.9)
(1.2)
(1.4)
—
466.4
409.9
(292.7)
(0.1)
(0.2)
—
398.8
10.1
(0.6)
—
—
—
1,679.0
105.8
(76.6)
(0.1)
—
—
(12.0)
(0.9)
(0.3)
(1.9)
(1.8)
—
(16.9)
11,747.2
234.8
583.0
406.4
1,706.3
4,249.0
18,926.7
Cost
Balance at 1.1.2001
Additions
Disposals
Write-offs
Currency translation
differences
Accumulated Depreciation
Balance at 1.1.2001
Depreciation
Disposals
Write-offs
differences
Net Book Value
Balance at 1.1.2001
Additions
Depreciation
Disposals
Write-offs
Impairment losses
differences
* Net of transfer to property, plant and equipment
3,926.1
322.9*
—
—
—
—
Total
Property,
Plant and
Equipment
RM
37,483.9
2,717.0
(128.2)
(126.7)
18,706.0
2,717.0
(2,377.6)
(8.0)
(9.5)
(84.3)
212
T E L E K O M
16.
M A L A Y S I A
B E R H A D
PROPERTY, PLANT AND EQUIPMENT (continued)
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
26,184.0
1,892.9
(237.2)
971.5
101.7
(46.2)
1,523.2
289.2
(16.3)
307.7
98.0
—
2,338.1
260.2
(0.5)
4,111.5
(185.4)*
—
(87.1)
(9.4)
(0.4)
(1.8)
(9.8)
—
(108.5)
27,752.6
1,017.6
1,795.7
403.9
2,588.0
3,926.1
37,483.9
13,708.0
1,981.4
(216.9)
716.0
104.2
(24.1)
1,042.7
301.7
(14.8)
4.5
0.6
—
820.0
93.0
(0.5)
—
—
—
16,291.2
2,480.9
(256.3)
(30.5)
(7.6)
(0.3)
—
(3.5)
—
(41.9)
15,442.0
788.5
1,329.3
5.1
909.0
—
18,473.9
Impairment
Balance at 1.1.2000
Impairment losses
—
304.0
—
—
—
—
—
—
—
—
—
—
—
304.0
304.0
—
—
—
—
—
304.0
12,476.0
1,892.9
(1,981.4)
(20.3)
(304.0)
255.5
101.7
(104.2)
(22.1)
—
480.5
289.2
(301.7)
(1.5)
—
303.2
98.0
(0.6)
—
—
1,518.1
260.2
(93.0)
—
—
(56.6)
(1.8)
(0.1)
(1.8)
(6.3)
—
(66.6)
12,006.6
229.1
466.4
398.8
1,679.0
3,926.1
18,706.0
Cost
Balance at 1.1.2000
Additions
Disposals/Write-offs
differences
Balance at 1.1.2000
Depreciation
differences
Net Book Value
Balance at 1.1.2000
Additions
Depreciation
Impairment losses
differences
4,111.5
(185.4)*
—
—
—
Total
Property,
Plant and
Equipment
RM
35,436.0
2,456.6
(300.2)
19,144.8
2,456.6
(2,480.9)
(43.9)
(304.0)
213
16.
THE GROUP
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
Movable plant and equipment
Computer support systems
Land
Buildings
2001
RM
2000
RM
214.6
5.3
1.4
0.9
2.2
160.1
5.4
1.1
0.9
207.1
224.4
374.6
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
Cost
Balance at 1.1.2001
Additions
Disposals
Write-offs
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-offs
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-offs
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
# Included RM23.5 million transferred to subsidiary companies
Total
Property,
Plant and
Equipment
RM
214
T E L E K O M
16.
M A L A Y S I A
B E R H A D
THE COMPANY
Capital
Work-InProgress,
at Cost
(sub-note b)
RM
Total
Property,
Plant and
Equipment
RM
Telecommunication
Network
RM
Movable
Plant and
Equipment
RM
Computer
Support
Systems
RM
Land
(sub-note a)
RM
Buildings
RM
Cost
Balance at 1.1.2000
Additions
23,867.3
1,570.8
(213.3)
803.6
51.5
(45.2)
1,340.5
224.9
(16.2)
284.2
97.5
—
1,955.3
240.2
(0.5)
3,790.7
(286.5)*
—
32,041.6
1,898.4
(275.2)
25,224.8
809.9
1,549.2
381.7
2,195.0
3,504.2
33,664.8
Balance at 1.1.2000
Depreciation
13,138.4
1,753.5
(200.3)
639.5
67.1
(23.6)
979.8
255.1
(14.7)
4.2
0.5
—
750.3
79.2
(0.5)
—
—
—
15,512.2
2,155.4
(239.1)
14,691.6
683.0
1,220.2
4.7
829.0
—
17,428.5
Net Book Value
Balance at 1.1.2000
Additions
Depreciation
10,728.9
1,570.8
(1,753.5)
(13.0)
164.1
51.5
(67.1)
(21.6)
360.7
224.9
(255.1)
(1.5)
280.0
97.5
(0.5)
—
1,205.0
240.2
(79.2)
—
3,790.7
(286.5)*
—
—
16,529.4
1,898.4
(2,155.4)
(36.1)
10,533.2
126.9
329.0
377.0
1,366.0
3,504.2
16,236.3
(a)
Details of land (at cost) are as follows:
Freehold land
Long term leasehold
Short term leasehold
Other land
The Group
2001
2000
RM
RM
The Company
2001
2000
RM
RM
207.0
94.7
2.0
108.4
199.8
94.9
2.0
107.2
178.9
93.8
2.0
108.4
178.9
93.6
2.0
107.2
412.1
403.9
383.1
381.7
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.
(b)
Included in the capital work-in-progress is finance cost capitalised amounting to RM4.0 million (2000: RM3.0 million) for
the Group.
215
17.
SUBSIDIARY COMPANIES
The Company
2001
2000
RM
RM
Investments, unquoted:
Malaysia
– at cost
– at written-down value (sub-note a)
Overseas
– at cost
1,704.8
—
243.0
1,380.7
—
229.3
Amount owing by subsidiary companies (sub-note b)
1,947.8
3,349.9
1,610.0
4,714.0
Allowance for loans and advances
5,297.7
(406.1)
6,324.0
(584.2)
TOTAL INTEREST IN SUBSIDIARY COMPANIES
4,891.6
5,739.8
(a)
Investments in certain subsidiary companies have been written down to RM1 each.
The subsidiary companies are as follows:
Name of Company
% of
Shareholdings
2001 2000
Paid-up Capital
2001
2000
Million
Million
Principal Activities
Payphone network and related services
Citifon Sdn. Bhd.
100
100
RM65.0
RM65.0
Intelsec Sdn. Bhd.*
100
100
RM3.0
RM3.0
Intelligent security services
Mediatel (Malaysia) Sdn. Bhd.
100
100
RM4.0
RM4.0
Investment holding
Menara Kuala Lumpur
Sdn. Bhd.
100
100
RM91.0
RM91.0
Mobikom Sdn. Bhd.
100
100
RM260.0
RM260.0
Parkside Properties Sdn. Bhd.*
100
100
RM0.1
RM0.1
Investment holding
70
100
RM1.6
RM1.1
Development and sale of software
products
TM Cellular Sdn. Bhd.
(formerly known as Telekom
Cellular Sdn. Bhd.)
100
100
RM1,000.0
RM695.0
Telekom Enterprise Sdn. Bhd.
100
100
RM0.6
RM0.6
Telekom Applied Business
Sdn. Bhd.
Management and operation of Kuala
Lumpur Tower
Mobile telecommunication services
Investment holding
216
T E L E K O M
17.
M A L A Y S I A
B E R H A D
SUBSIDIARY COMPANIES (continued)
Name of Company
% of
Shareholdings
2001 2000
Paid-up Capital
2001
2000
Million
Million
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
TM International Sdn. Bhd.
(formerly known as Telekom
Malaysia International Sdn. Bhd.)
100
100
RM16.2
RM16.2
Investment holding/telecommunication
and consultancy services on an
international scale
Telekom Management
Services Sdn. Bhd.
100
100
RM#
RM#
Management consultancy services in
telecommunication and related areas
Telekom Multi-Media
Sdn. Bhd.
100
100
RM1.6
RM1.6
Interactive multimedia
communication services and solutions
Telekom Payphone Sdn. Bhd.
100
100
RM9.0
RM9.0
Investment holding
Sdn. Bhd.
100
100
RM6.0
RM6.0
Printing and publication of telephone
directories and distribution of information
Telekom Sales and Services
Sdn. Bhd.
100
100
RM7.5
RM7.0
Trading in customer premises
equipment
Telesafe Sdn. Bhd.*
100
100
RM4.0
RM4.0
Fire and industrial safety services
TM International (Cayman) Ltd.*
100
100
USD#
USD#
Investment holding
TM Global Incorporated##
100
100
USD#
USD#
Investment holding
TM International Leasing
Incorporated##
100
100
USD#
USD#
Investment holding
100
100
RM1.0
RM1.0
Management of private university
VADS Berhad
(formerly known as VADS
Sdn. Bhd.)
100
100
RM15.0
RM15.0
Value added data and electronic
telecommunication services
217
17.
Name of Company
% of
Shareholdings
2001 2000
Paid-up Capital
2001
2000
Million
Million
Meganet Communications
Sdn. Bhd.
70
70
RM11.0
RM11.0
Interactive multimedia
communication services
TM International (Bangladesh)
Limited##
70
70
TK340.0
TK100.0
Fiberail Sdn. Bhd.
60
60
RM14.2
RM14.2
Installation, maintaining and operating of
optical fibre telecommunication system
100
—
RM20.0
—
Research and development work and
experiment in the area of
telecommunication
Telekom Technology Sdn. Bhd.
70
—
RM0.1
—
Develop, establish, maintain, operate
and market advance technology in
e-commerce
Societe Des
Telecommunications De
Guinee**
60
60
Telekom Networks Malawi
Limited**
60
60
MKW65.0
MKW65.0
Telecommunication and related services
Telekom Consultancy
Sdn. Bhd.*
51
51
RM#
RM#
Consultancy and engineering services
in telecommunications
Telekom Malaysia (UK)
Limited*/**
100
100
STR#
STR#
International telecommunication facilities
TM (Hong Kong) Limited*/**
100
100
HKD#
HKD#
TM (USA) Inc.*/**
100
100
USD#
USD#
Subsidiary held through
Sdn. Bhd.
Cybermall Sdn. Bhd.
100
100
RM2.7
RM0.6
Telecommunications, multimedia and
information technology services
Telekom Research &
Development Sdn. Bhd.
GFR75,000.0 GFR75,000.0
218
T E L E K O M
17.
M A L A Y S I A
B E R H A D
Name of Company
Unitele Multimedia Sdn. Bhd.
% of
Shareholdings
2001 2000
Paid-up Capital
2001
2000
Million
Million
100
100
RM#
RM#
100
100
RM1.0
RM1.0
Electronic commerce services
100
100
RM1.5
RM1.5
Inter net System Integration and
networking facilities relating to
information technology
100
100
SLR1,638.9
SLR1,638.9
TM International (L) Limited##
100
100
USD#
USD#
Investment holding
TM International Lanka
(Private) 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
Communication Co. Ltd.**
51
51
USD8.5
USD8.5
100
100
RM#
RM#
Electronic commerce and related services
51
51
RM15.0
RM15.0
Development and distribution of
educational software and hardware
55
55
RM8.0
RM8.0
Subsidiaries held through
VADS Berhad
VADS E-Services Sdn. Bhd.
(formerly known as
Electronic Commerce
Services Sdn. Bhd.)
VADS Solutions Sdn. Bhd.
(formerly known as
The Network Connections
Sdn. Bhd.)
MTN Networks (Private)
Limited##
Telekom Multi-Media
Sdn. Bhd.
TM Orion Sdn. Bhd.*
Telekom Smart School
Sdn. Bhd.
Telekom Enterprise Sdn. Bhd.
Mobitel Sdn. Bhd.*
Management and provision of distance
learning products and services
219
17.
All subsidiary companies are incorporated in Malaysia except the following:
Name of Company
Place of Incorporation
Cambodia Samart Communication Co. Ltd.**
G-Com Limited**
MTN Networks (Private) Limited##
Societe Des Telecommunications De Guinee**
Telekom Networks Malawi Limited**
TM Global Incorporated##
TM International (Bangladesh) Limited##
TM International (Cayman) Ltd.*
TM International (L) Limited##
TM International Lanka (Private) Limited##
TM International Leasing Incorporated##
TMI Mauritius Limited##
Telekom Malaysia (UK) Limited*/**
TM (Hong Kong) Limited*/**
TM (USA) Inc.*/**
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
*
##
**
#
USD
STR
HKD
TK
CED
GFR
MKW
SLR
(b)
Cambodia
Ghana
Sri Lanka
Republic of Guinea
Malawi
Federal Territory, Labuan
Bangladesh
British West Indies, USA
Sri Lanka
Mauritius
United Kingdom
Hong Kong
United States of America
Inactive as at 31 December 2001
Audited by a member firm of PricewaterhouseCoopers
Not audited by member firms of PricewaterhouseCoopers
Amounts less than 0.1 million in their respective currency
US Dollar
Pound Sterling
Hong Kong Dollar
Bangladesh Taka
Ghanaian Cedi
Guinea Franc
Malawi Kwacha
Sri Lanka Rupee
Amount owing by subsidiary companies
The amount owing by subsidiary companies represents advances for working capital purposes. These advances are
unsecured and bear interest ranging from 0% to 8.0% (2000: 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.
220
T E L E K O M
18.
M A L A Y S I A
B E R H A D
The Group
2001
2000
RM
RM
The Company
2001
2000
RM
RM
Investment, at cost (quoted):
Overseas
Investments, at cost (unquoted):
Malaysia
Overseas
198.9
198.9
—
—
11.1
1,389.3
10.5
2,072.6
9.7
10.3
9.1
10.3
Goodwill written-off
1,599.3
(761.1)
2,282.0
(1,027.1)
20.0
—
19.4
—
838.2
202.5
1,254.9
(20.4)
20.0
—
19.4
—
Share of net assets of associated companies
Amount owing by associated companies (sub-note a)
1,040.7
25.8
1,234.5
25.2
20.0
2.0
19.4
25.2
TOTAL INTEREST IN ASSOCIATED COMPANIES
1,066.5
1,259.7
22.0
44.6
15.2
23.3
—
—
Group’s share of post acquisition profits less losses
Market value of quoted investment
The associated companies are as follows:
Name of Company
GITN Sdn. Bhd.
% of
Shareholdings
2001
2000
45
45
16.5
25.3
MYSPEED.COM Sdn. Bhd.
15
15
E-commerce services
Sistem Iridium Malaysia Sdn. Bhd.
40
40
Wireless communications services
Associates held through
Telekom Multi-Media Sdn. Bhd.
Mahirnet Sdn. Bhd.
49
49
Distance learning services
Mutiara.Com Sdn. Bhd.
30
30
Information technology and telecommunications infrastructure
Associates held through
Digital Phone Company Limited
—
49.99
42
42
19.73
24.46
Itopia Inc.
Cambodia National
Communication Inc.*
Samart Corporation Public
Company Limited
Integrated telecommunication network infrastructure
Research and development of telecommunication products
Trunk land mobile radio services
Telecommunication and broadcasting services
221
18.
ASSOCIATED COMPANIES (continued)
Name of Company
Associate held through
Telekom Malaysia-Africa Sdn. Bhd.
Thintana Communications Llc.
G-Com Limited
Ghana Telecommunications
Company Limited (sub-note b)
Telkom SA Limited
% of
Shareholdings
2001
2000
40
40
Investment holding
30
30
30
30
All associated companies are incorporated in Malaysia except the following:
Name of Company
Place of Incorporation
Cambodia National Communication Inc.*
Digital Phone Company Limited
Ghana Telecommunications Company Limited
Itopia Inc.
Samart Corporation Public Company Limited
Telkom SA Limited
–
–
–
–
–
–
–
Cambodia
Thailand
Ghana
Thailand
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 2001
(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)
On 18 August 2000, Telekom Malaysia Group (TM) paid a sum of USD50.0 million (RM190.0 million) to the Government
of Ghana (GoG) as deposit for the proposed acquisition of additional 15% equity interest in Ghana Telecommunications
Company Limited (GT) in accordance with the terms and conditions of the Head of Agreement (HoA) entered into
between TM and GoG dated 10 August 2000. The deadline to conclude the transaction lapsed on 19 February 2002
and consequently the deposit payment of USD50.0 million as disclosed in note 22 to the financial statements, becomes
due and payable to TM under the terms and conditions of the HoA. TM has commenced negotiation with GoG on the
terms and conditions in respect of the said refund.
Consequent to the above, the Technical and Consultancy Services Agreement (“TCSA”) between GT and TM for the
provision of technical and operational expertise from TM to GT which expired on 19 February 2002, is not renewed.
The amount due from GT for services rendered under this agreement as at 31 December 2001 was approximately
USD6.0 million.
222
T E L E K O M
19.
20.
B E R H A D
INVESTMENTS
The Group
2001
2000
RM
RM
The Company
2001
2000
RM
RM
Investments in International Satellite Organisations, at cost
Investments in unquoted shares, at cost
133.5
62.3
160.8
61.6
132.6
56.0
160.8
56.0
Allowance for permanent diminution in value
195.8
(90.3)
222.4
(77.7)
188.6
(90.3)
216.8
(77.7)
TOTAL INVESTMENTS AFTER ALLOWANCE
105.5
144.7
98.3
139.1
LONG TERM RECEIVABLES
The Group
2001
2000
RM
RM
The Company
2001
2000
RM
RM
Staff loans (sub-note a)
Amount receivable within twelve months included
under other receivables
747.9
731.5
747.8
731.5
(100.6)
(90.6)
(100.6)
(90.6)
Other long term receivables
647.3
10.5
640.9
—
647.2
9.8
640.9
—
TOTAL LONG TERM RECEIVABLES
657.8
640.9
657.0
640.9
(a)
21.
M A L A Y S I A
Staff loans amounting to RM100.0 million (2000: RM244.8 million) have been assigned to secure the Company’s
borrowings from Cagamas Berhad.
INVENTORIES
The Group
2001
2000
RM
RM
The Company
2001
2000
RM
RM
27.8
29.2
20.1
55.3
36.5
40.5
31.6
41.7
27.8
29.2
17.2
21.3
36.4
40.5
13.1
18.0
132.4
150.3
95.5
108.0
At net realisable value:
Spares and others
21.0
6.1
—
—
TOTAL INVENTORIES
153.4
156.4
95.5
108.0
At cost:
Cables and wires
Network materials
Telecommunication equipment
Spares and others
223
22.
TRADE AND OTHER RECEIVABLES
The Group
2001
2000
RM
RM
Receivables from telephone customers
Receivables from non-telephone customers
Receivables from subsidiary companies
2,971.5
1,516.3
—
2,425.3
1,717.9
—
1,674.9
1,342.9
639.1
1,730.4
1,452.1
310.8
Advance rental billings
4,487.8
(451.4)
4,143.2
(339.2)
3,656.9
(507.1)
3,493.3
(371.8)
Allowance for doubtful debts
4,036.4
(1,485.2)
3,804.0
(915.4)
3,149.8
(722.3)
3,121.5
(540.0)
Total trade receivables after allowance
2,551.2
2,888.6
2,427.5
2,581.5
556.3
548.5
534.7
537.7
190.0
438.1
—
190.0
350.2
—
190.0
337.2
45.8
190.0
264.4
33.3
3,735.6
3,977.3
3,535.2
3,606.9
Prepayments
Deposit for additional investment in an associated company
(refer to note 18b to the financial statements)
Other receivables
Other receivables from subsidiary companies
TOTAL TRADE AND OTHER RECEIVABLES
AFTER ALLOWANCE
23.
The Company
2001
2000
RM
RM
SHORT TERM INVESTMENTS
The Group
2001
2000
RM
RM
The Company
2001
2000
RM
RM
Shares quoted on The Kuala Lumpur Stock Exchange
222.5
166.2
222.5
166.2
TOTAL SHORT TERM INVESTMENTS
222.5
166.2
222.5
166.2
Market value of quoted shares
222.5
174.1
222.5
174.1
224
T E L E K O M
24.
M A L A Y S I A
B E R H A D
CASH AND CASH EQUIVALENTS
The Group
2001
2000
RM
RM
The Company
2001
2000
RM
RM
Deposits with:
Licensed banks
Licensed finance companies
Other financial institutions
932.1
306.8
1,166.6
810.2
135.2
1,249.4
646.3
294.6
1,092.4
586.3
95.0
1,224.7
Total Deposits
Cash and bank balances
Bank overdrafts
2,405.5
121.6
(7.0)
2,194.8
65.9
(45.0)
2,033.3
77.2
—
1,906.0
23.6
—
TOTAL CASH AND CASH EQUIVALENTS
AT END OF THE YEAR
2,520.1
2,215.7
2,110.5
1,929.6
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 6.0% to 7.0% (2000: 6.5% to 7.65%) per annum except for
overseas subsidiary companies where the interest rates ranged from 19.0% to 46.0% (2000: 21.0% to 30.0%) per annum.
25.
TRADE AND OTHER PAYABLES
The Group
2001
2000
RM
RM
26.
The Company
2001
2000
RM
RM
Trade payables
Duties and other taxes payable
Finance cost payable
Deposits and trust monies
Other non trade payables
2,249.0
198.2
128.8
130.0
562.5
2,373.1
102.8
278.1
132.4
279.0
1,479.2
132.5
127.9
120.1
390.2
1,660.5
77.8
255.5
122.4
271.4
TOTAL TRADE AND OTHER PAYABLES
3,268.5
3,165.4
2,249.9
2,387.6
CASH FLOWS FROM OPERATING ACTIVITIES
The Group
2001
2000
RM
RM
The Company
2001
2000
RM
RM
Receipts from customers
Payments to suppliers and employees
Payment of finance cost
Payment of income taxes
8,988.5
(4,230.3)
(689.8)
(785.2)
7,313.1
(3,130.9)
(463.3)
(754.0)
7,568.0
(3,384.8)
(664.2)
(769.8)
6,321.5
(2,253.3)
(428.0)
(733.2)
TOTAL CASH FLOWS FROM OPERATING ACTIVITIES
3,283.2
2,964.9
2,749.2
2,907.0
225
27.
CASH FLOWS USED IN INVESTING ACTIVITIES
The Group
2001
2000
RM
RM
28.
The Company
2001
2000
RM
RM
Disposal of property, plant and equipment
Purchase of property, plant and equipment
Disposal of investment
Purchase of investment
Investment in new subsidiary companies
Acquisition of an associated company
Additional investment in an associated company
Deposit for additional investment in an associated company
Disposal of an associated company
Repayment from subsidiary companies
Advances to subsidiary companies
Repayment from associated companies
Advances to associated companies
Repayments of loans by employees
Loans to employees
Interest received
Dividend received
34.0
(2,709.9)
32.6
(85.0)
—
—
(0.6)
—
927.6
—
—
0.4
(1.0)
100.6
(119.6)
128.6
3.7
—
(2,456.6)
11.3
(4.9)
—
(0.1)
(208.5)
(190.0)
225.2
—
—
18.3
(5.2)
91.2
(84.1)
88.7
3.0
32.8
(1,895.4)
32.6
(83.3)
(4.5)
—
(0.6)
—
—
926.1
(294.8)
0.4
(0.1)
100.6
(119.6)
99.7
38.1
—
(1,898.4)
11.0
(4.9)
(0.1)
(0.1)
(0.8)
(190.0)
225.2
—
(1,211.9)
18.3
(5.2)
90.6
(84.1)
85.0
18.2
TOTAL CASH FLOWS USED IN INVESTING ACTIVITIES
(1,688.6)
(2,511.7)
(1,168.0)
(2,947.2)
CASH FLOWS (USED IN)/FROM FINANCING ACTIVITIES
The Group
2001
2000
RM
RM
The Company
2001
2000
RM
RM
Issue of share capital
Issue of share capital to minority interest
Proceeds from borrowings
Repayment of borrowings
Dividends paid to shareholders
Dividends paid to minority interest
140.9
4.8
829.3
(2,033.5)
(222.4)
(4.9)
621.1
—
1,324.8
(906.0)
(307.9)
—
140.9
—
489.0
(1,807.8)
(222.4)
—
621.1
—
1,324.8
(564.5)
(307.9)
—
TOTAL CASH FLOWS (USED IN)/FROM
FINANCING ACTIVITIES
(1,285.8)
732.0
(1,400.3)
1,073.5
226
T E L E K O M
29.
M A L A Y S I A
B E R H A D
NON-CASH TRANSACTIONS
Principal non-cash transactions during the year are as follows:
The Company
2001
2000
RM
RM
(a)
(b)
30.
Capitalisation of loans and advances into paid up capital of subsidiary companies
Transfer of property, plant and equipment in lieu of cash injection into paid up
capital of a new subsidiary company
318.3
—
15.9
—
SIGNIFICANT RELATED PARTY TRANSACTIONS
In addition to related party disclosures mentioned elsewhere in the financial statements, set out below is other significant
related party transaction and balance.
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 RM28.9 million (2000: RM53.2 million) remained
oustanding as at 31 December 2001. This transaction has been entered in the normal course of business and at negotiated terms.
31.
COMMITMENTS
The Group
2001
2000
RM
RM
(a)
Property, plant and equipment
Commitments in respect of expenditure contracted for
Commitments in respect of expenditure approved
but not contracted for
The Company
2001
2000
RM
RM
3,896.6
4,002.2
3,326.8
2,166.7
12.2
432.5
—
243.8
At 31 December 2001, there exists a potential claim for recovery of loss and expenses totalling to RM527.5 million
that may increase the commitments for the construction of Menara Telekom. The Directors, based on professional
opinion received, are of the view that the Company has a good case to dispute and/or contest a substantial portion of
the claim.
227
31.
COMMITMENTS (continued)
The Company
2001
2000
Future
Future
minimum
minimum
lease
lease
payments
payments
RM
RM
(b)
Non-cancellable operating lease commitments
Not later than one year
Later than one year and not later than five years
Later than five years
53.2
226.4
146.6
51.4
220.9
205.3
426.2
477.6
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 2001, the Group and the Company had contingent liabilities in respect of:
(i)
Guarantees issued to banks amounting to USD32.0 million (RM121.6 million) (2000: USD26.0 million (RM98.8
million)) for banking facilities extended to overseas subsidiary companies.
(ii)
A performance bond guarantee of RM15.0 million (2000: RM15.0 million) issued in favour of a principal of a
contract obtained in the ordinary course of the business.
(b)
A claim against a wholly owned subsidiary company, Telekom Multi-Media Sdn. Bhd. was initiated on 9 January 2001.
The claim, which the plaintiff is seeking, is for damages of RM105.7 million for loss of profits and Canadian Dollars 0.9
million for expenses incurred. The Directors, based on the legal opinion received, are of the view that the Company has
a reasonably good case to dispute and/or contest the claim by the plaintiff. There has been no material development
since then.
(c)
An overseas associated company, Ghana Telecommunications Company Limited of which the Group has an effective
shareholding of 25.5% had been penalised for non-achievement of several performance targets as set out under its
Telecommunication Licence on 27 December 2001. The associated company had subsequently appealed against the
penalty and is now seeking to negotiate for an amicable settlement. Financially, the total exposure to the Group is
estimated to be in the range of RM30.0 million to RM60.0 million.
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.
228
T E L E K O M
33.
M A L A Y S I A
B E R H A D
SEGMENTAL ANALYSIS
By Activity
2001
Telecommunication
Non-telecommunication
2000
Telecommunication
Non-telecommunication
2001
Malaysia
Overseas*
2000
Malaysia
Overseas*
Operating
Income
RM
Profit
Before
Taxation
RM
Assets
Employed
RM
9,256.2
417.0
2,358.8
84.8
26,713.1
675.0
9,673.2
2,443.6
27,388.1
8,305.3
510.4
1,158.2
92.6
26,610.8
656.1
8,815.7
1,250.8
27,266.9
9,179.5
493.7
1,528.7
914.9
25,296.4
2,091.7
9,673.2
2,443.6
27,388.1
8,503.9
311.8
1,217.6
33.2
25,372.0
1,894.9
8,815.7
1,250.8
27,266.9
* The Group has operations in Sri Lanka, Bangladesh, Thailand, Cambodia, Ghana, Republic of Guinea, Malawi, South Africa
and United States of America.
34.
CURRENCY
All amounts are expressed in Ringgit Malaysia (RM) unless otherwise stated.
229
Statement by Directors
pursuant to Section 169(15) of the Companies Act, 1965
T E L E K O M
M A L A Y S I A
B E R H A D
We, 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 188 to
228 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 2001 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 26 February 2002.
DATO’ IR. MUHAMMAD RADZI BIN HAJI MANSOR
Chairman
DATO’ DR. MD KHIR BIN ABDUL RAHMAN
Chief Executive
Statutory Declaration
T E L E K O M
M A L A Y S I A
B E R H A D
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 188 to 228 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
declared at Kuala Lumpur
this 26 February 2002
Before me:
T. THANAPALASINGAM
Commissioner for Oaths
Kuala Lumpur
)
)
)
GAZALI BIN HARUN
230
Report of the Auditors
T E L E K O M
M A L A Y S I A
to the Members of Telekom Malaysia Berhad (Company No. 128740-P)
B E R H A D
We have audited the financial statements set out on pages 188 to 228. 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 2001 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
(AF: 1146)
Chartered Accountants
Kuala Lumpur
Date: 26 February 2002
ABDUL RAHIM HAMID
[904/3/02(J/PH)]
Partner
231
General Information
T E L E K O M
M A L A Y S I A
B E R H A D
1.
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:
Tingkat 2, Ibupejabat Telekom Malaysia
Jalan Pantai Baharu
50672 Kuala Lumpur
3.
The principal office and place of business of the Company is:
Ibupejabat Telekom Malaysia
Jalan Pantai Baharu
50672 Kuala Lumpur
4.
The average number of employees at the end of the financial year amounted to:
2001
2000
Group
32,694
31,702
Company
24,754
25,554
232
Shareholding Statistics
T E L E K O M
M A L A Y S I A
as at 20 March 2002
B E R H A D
Analysis of Shareholdings
Share Capital
Authorised Share Capital
: 5,000,000,001
Issued and Fully Paid-up Capital : 3,141,078,881
Class of Shares
: 3,141,078,881 ordinary shares of RM1 each and 1 (one) Special Rights Redeemable
Preference Share of RM1 each and fully paid.
Voting Rights
: One vote per ordinary share.
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
Foreign
No
%
No
%
Shares
Malaysian
No
%
Foreign
No
%
277,273
4,176,191
16,618,018
0.01
0.13
0.53
15.64 186,534,760
5.94
Less than 1,000
1,000 – 10,000
10,001 – 100,000
100,001 – 157,053,943
(5% of paid-up
capital)
157,053,943 and
above
604
19,977
941
2.45
80.92
3.81
662
1,528
395
2.68
6.19
1.60
227,159
47,133,906
26,948,740
0.01
1.50
0.86
238
0.96
339
1.37
491,358,560
4
0.02
—
—
2,367,804,274
75.38
—
—
TOTAL
21,764
88.16
2,924
11.84
2,933,472,639
93.39
207,606,242
6.61
2001 Monthly Trading Volume & Highest-Lowest Share Price
Share Price (RM)
Volume Share
12,000,000
5.0
6,000,000
0
Jan
Feb
Mar
Apr
May
Jun
Jul
share performance
Aug
Sep
Volume
Oct
Nov
Lowest
42,841,000
7.5
22,244,000
18,000,000
28,265,000
10.0
30,860,000
24,000,000
28,640,000
12.5
40,039,000
30,000,000
21,924,000
15.0
25,297,000
36,000,000
33,645,000
17.5
19,703,000
42,000,000
25,426,000
20.0
39,280,000
48,000,000
2.5
Dec
Highest
0
233
T E L E K O M
No. Name
1. Khazanah Nasional Berhad
as at 20 March 2002
M A L A Y S I A
B E R H A D
Share Held Percentage
(%)
1,108,335,990
35.29
2. Minister of Finance
650,394,784
20.71
3. Employees Provident Fund Board
357,393,500
11.38
4. Bank Negara Malaysia
251,680,000
8.01
5. Permodalan Nasional Berhad
154,231,000
4.91
6. Amanah Raya Nominees (Tempatan) Sdn. Bhd.
Amanah Saham Malaysia
31,370,000
1.00
7. Malaysia Nominees (Tempatan) Sendirian Berhad
Great Eastern Life Assurance (Malaysia) Berhad (MLF)
22,439,920
0.71
8. Bank Simpanan Nasional
19,822,000
0.63
Sekim Amanah Saham Nasional
13,627,000
0.43
12,291,000
0.39
11. HSBC Nominees (Asing) Sdn. Bhd.
Abu Dhabi Investment Authority
9,877,000
0.31
Amanah Saham Wawasan 2020
9,856,000
0.31
13. Kumpulan Wang Amanah Pencen
7,216,000
0.23
14. Arab-Malaysian Nominees (Tempatan) Sdn. Bhd.
Arab-Malaysian Trustee Bhd. for BHLB Pacific Dana Al-Ihsan
6,759,000
0.22
15. Pertubuhan Keselamatan Sosial
5,948,500
0.19
5,626,000
0.18
17. Lembaga Tabung Angkatan Tentera
5,517,000
0.18
18. Citicorp Nominees (Asing) Sdn. Bhd.
American International Assurance Company Limited (P Core)
4,867,311
0.15
4,721,000
0.15
20. Lembaga Tabung Haji
4,583,500
0.15
21. Citicorp Nominees (Asing) Sdn. Bhd.
CB LDN for Stiching Shell Pensioenfonds
4,570,000
0.15
22. Malaysia Nominees (Tempatan) Sendirian Berhad
Great Eastern Life Assurance (Malaysia) Berhad (MLF2)
4,526,000
0.14
234
T E L E K O M
M A L A Y S I A
as at 20 March 2002
B E R H A D
No. Name
(%)
23. Kerajaan Negeri Perak Darul Ridzuan
4,500,000
0.14
24. Universal Trustee (Malaysia) Berhad
BHLB Pacific High Growth Fund
4,446,000
0.14
4,340,000
0.14
26. Citicorp Nominees (Tempatan) Sdn. Bhd.
Aetna Universal Insurance Berhad (Inv-IL Par)
4,235,000
0.13
4,211,000
0.13
4,206,000
0.13
29. HSBC Nominees (Asing) Sdn. Bhd.
Stiching Pensioenfonds Abp
4,183,000
0.13
3,995,000
0.13
2,729,768,505
86.89
TOTAL
Substantial Shareholders Holdings
(5% and Above)
No. Name
1.
Khazanah Nasional Berhad
2.
(%)
1,108,335,990
35.29
Minister of Finance
650,394,784
20.71
3.
Employees Provident Fund Board
357,393,500
11.38
4.
Bank Negara Malaysia
251,680,000
8.01
2,367,804,274
75.39
TOTAL
235
Shareholders and Investor Information
T E L E K O M
M A L A Y S I A
B E R H A D
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
Telekom Malaysia Berhad (128740-P)
1st Floor, Ibupejabat Telekom Malaysia
Jalan Pantai Baharu
50672 Kuala Lumpur
Fax : 03-7957 4747
236
Net Book Value of Land & Buildings
T E L E K O M
M A L A Y S I A
Location
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Federal Territory
a. Kuala Lumpur
b. Labuan
Selangor
Perlis
Perak
Pulau Pinang
Kedah
Johor
Melaka
Negeri Sembilan
Terengganu
Kelantan
Pahang
Sabah
Sarawak
Sri Lanka
Malawi
Republic of
Guinea
Bangladesh
South Africa
Cambodia
Total
B E R H A D
Freehold
No. of
Area
Lots (’000 sq ft)
Leasehold
No. of
Area
Lots (’000 sq ft)
Net Book Net Book
Value
Value of
Excepted Land*
of Land Buildings
No. of
Area
RM
RM
Lots (’000 sq ft)
(million)
(million)
15
–
9
–
4
2
7
5
2
19
–
–
5
–
5
7
–
1,154
–
8,720
–
17
5
535
106
3
47,565
–
–
80
–
202
92
–
5
–
16
4
12
18
12
25
14
9
13
8
25
13
27
–
21
411
–
25,429
52
505
1,402
1,335
1,293
738
321
713
356
1,420
140
861
–
92
–
–
97
14
119
60
55
138
38
71
41
41
98
76
109
–
–
–
–
16,698
750
7,780
15,431
2,818
14,097
4,457
9,371
6,285
2,234
8,409
26,290
10,284
–
–
126.8
–
106.5
0.4
40.8
7.6
11.2
4.3
1.0
52.3
1.3
0.8
3.6
7.2
26.1
5.7
–
718.6
9.4
177.3
5.8
88.0
44.4
81.5
98.5
45.0
37.2
46.4
24.4
95.7
91.0
115.3
7.2
1.0
60
7
7
–
4,881
357
58
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7.7
0.9
2.2
–
14.7
1.3
2.0
1.6
154
63,775
222
35,068
957
124,904
406.4
1,706.3
No revaluation has been made on any of the land and buildings.
*
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.
237
Usage of Properties
T E L E K O M
Location
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Federal Territory
a. Kuala
Lumpur
b. Labuan
Selangor
Perlis
Perak
Pulau Pinang
Kedah
Johor
Melaka
Negeri
Sembilan
Terengganu
Kelantan
Pahang
Sabah
Sarawak
Sri Lanka
Malawi
Republic
of Guinea
Bangladesh
South Africa
Cambodia
Office
Stores/
Buildings Residential Warehouses
M A L A Y S I A
Satellite/
Submarine
Cable
Stations
Resort
Kedai TM/
Primatel/
Business
Centre
B E R H A D
Telecommunication/
Tourism
University
Tower
Exchanges
Transmission
Station
25
3
85
10
68
23
48
85
18
6
2
12
–
19
–
10
16
2
21
1
17
–
32
17
4
7
5
27
4
–
2
81
33
26
51
23
19
12
41
1
42
23
11
22
7
1
2
–
–
–
2
–
1
2
–
–
–
–
–
1
1
–
–
–
–
6
1
2
4
2
3
1
–
–
1
–
–
–
–
–
1
1
–
–
–
–
–
1
–
–
31
33
23
44
40
72
–
–
14
12
3
20
33
39
2
21
4
5
7
13
21
24
3
–
16
15
18
49
22
47
–
–
–
6
13
17
22
25
2
–
1
–
–
3
2
1
–
–
2
–
–
4
1
–
–
–
1
–
1
1
3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
29
–
–
2
31
7
–
–
2
–
–
–
–
–
7
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
This page has been intentionally left blank.
proxy form
T E L E K O M
M A L A Y S I A
B E R H A D
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
Seventeenth 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, 21 May 2002 at 10.00 a.m. and at any
adjournment thereof.
My/Our proxy is to vote as indicated below:
Resolutions
For
Against
1. Adoption of Accounts and Reports for the year
ended 31 December 2001
– Ordinary Resolution 1
2. Declaration of final dividend of 10 sen per share
(less 28% Malaysian Income Tax) and special
dividend of 5 sen per share (less 28%
Malaysian Income Tax)
3. Re-election of Directors under Article 103:(i) Y.B. Tuan Joseph Salang Gandum
(ii) Dato’ Dr. Mohd Munir bin Abdul Majid
(iii) Y.B. Dato’ Ir. Haji Mohd Zin bin Mohamed
4. Approval of Directors’ fees and remuneration
5. Appointment of Messrs. PricewaterhouseCoopers
as Auditors of the Company
6. Special Business:
–
Section 132D, Companies Act 1965
Issuance of New Shares
(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 ______________ 2002
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.
2. The instrument appointing the 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 attorney duly appointed under a power of attorney.
3. The 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

R e a c h i n g o u t

Transcription

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