Kenanga Reiterates 'Outperform' On TM, Neutral On NFP - Kenanga Research is Neutral on Telekom Malaysia Bhd and Tenaga Nasional Bhd's memorandum of understanding to implement the Nationwide Fiberisation Plan.
"we are Neutral as the positive catalyst (where we believe TM is set be appointed as the key second-tier provider (under the Nationwide Fiberisation Plan) and thus allowing it to penetrate areas not covered by HSBB, HSBB2 and SUBB) could be overshadowed by the potential cut in broadband pricing by 2019," it said.
The research firm reiterated its Outperform call on TM with an unchanged target price of RM6.85.
"The MoU is subject to a definitive agreement to be signed between the parties upon finalization of the commercial terms," Kenaga Research noted.
The Nationwide Fiberization Plan aims to connect some six million premises, including two million premises in the rural areas, to a fibre network.
The model will comprise three tiers, utilising TNB's fibre trunk network for wholesale backhaul services, wholesale service providers to offer last mile access and third-tier providers to offer retail services to consumers and business.
Kenanga Research believes the consumer will be the ultimate winner in the unfurling of the plan.
"With the right broadband policies and strategies in place, we believe the country is on the right track to achieve its targets set out in the 11th Malaysia Plan," it said.
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