TM to terminate DNB access, migrate to new 5G network within months

Telekom Malaysia Bhd (TM) intends to terminate its existing 5G wholesale access arrangement with Digital Nasional Bhd (DNB) and migrate to a new mobile network.

This is expected to take place over the next few months seamlessly without service interruption, TM group chief executive officer Amar Huzaimi Deris said.

He said the decision was made in line with the government’s dual network approach, which allows TM to evaluate options that best support its long-term competitiveness and convergence strategy.

“It is done as per the legal option given to us… as Malaysia transitions into what the government calls the dual network, this provides TM with options to evaluate what best fits our long-term competitive value and convergence offering,” he told a media briefing in Kuala Lumpur today.

TM had earlier announced it would enter into a new 5G Multi-Operator Core Network wholesale arrangement with U Mobile to strengthen mobile competitiveness and support its convergence ambitions, while exercising contractual rights to terminate the existing access agreement with DNB, subject to regulatory requirements.

Amar further said the termination of the DNB arrangement would not result in any known penalty for the group, as the move was undertaken based on contractual provisions available to TM.

Meanwhile, when asked whether TM has considered acquiring U Mobile, he declined to comment, describing the matter as strategic and market-sensitive, and said any material development would be subject to due process and announced accordingly.

Going forward, he said TM has a positive outlook for 2026, supported by continued revenue growth momentum and strengthened underlying profitability as the group advances towards its Digital Powerhouse 2030 aspiration.

“We expect revenue to record a low single-digit increase for the year, while earnings before interest and tax (EBIT) are projected to remain broadly at a similar level to 2025, reflecting stable operational performance across its business segments.

“Capital expenditure (capex) intensity is forecast to rise to between 18 percent and 20 percent of revenue, higher than previously, as we accelerate investment to support growth initiatives and infrastructure expansion,” he added.

He said TM plans to allocate its 2026 capex towards broadband expansion, fibre rollout, cloud, digital services, artificial intelligence (AI), graphics processing units (GPUs), and data centres, representing a blend of the group’s new investment versus what it has today.

On dividends, Amar said the group aims to sustain its track record of payouts, highlighting that TM has consistently delivered dividends in line with its performance.

“As you can see from our record, we have been performing in terms of dividend payouts, so we wanted to make sure that we are following that trend,” he said.

The group declared a second interim dividend of 14.5 sen per share and a special dividend of four sen per share for the financial year ended Dec 31, 2025 (FY2025), both to be paid on March 27, 2026.

Total dividend for FY2025 amounted to 31 sen per share, the same as for the preceding year.

In a filing with Bursa Malaysia today, TM disclosed that its net profit fell by 15.1 percent to RM1.71 billion for the FY2025 from RM2.02 billion in the preceding year.

TM said the lower net profit reflects the absence of a material one-off tax credit recognised last year, as well as the lower EBIT, but it was partially supported by gains from the group’s investment in a technology fund.

Revenue for FY2025, however, rose by 1.4 percent or RM159.6 million to RM11.87 billion from RM11.71 billion previously despite a challenging operating environment across the telecommunications sector.

For the fourth quarter of FY2025, TM’s net profit shrank to RM222.49 million from RM730.63 million a year earlier, while revenue increased by 6.8 percent to RM3.26 billion from RM3.05 billion previously.

- Bernama

COMMENT | Predicted, ignored, realised: M'sia's 5G collapse

COMMENT | Second 5G network highly questionable

U Mobile gets MCMC letter of award for 5G network

U Mobile to roll out 5G in 15-18 months, IPO this year - Tan

COMMENT | S'pore may have had over 70pct stake in U Mobile

Mid-December deadline for DNB, MyDigital ID to present plans to buck up - Fahmi