1Q 2010 RESULTS

27 May 2010

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Disclaimer

2

Performance Overview

Financial review

Operating highlights

Concluding remarks

3

4

Highlights 1Q 2010

Revenue performance stabilized and strong growth momentum in strategic segments

- Broadband & Data Growth

- Consumer & Government

Growing EBITDA margin QoQ but lower YoY due to UniFi,

ESOS and specific direct cost

UniFi successfully launched with positive customer feedback and more than 2,000 customers

Continued focus on shareholder returns and capital management, dividend policy commitment and strong cash position (RM3.9bn)

Operating revenue of RM2,125m, up 0.9% YoY

Normalised EBITDA of RM732m, stable QoQ but lower 10.2% YoY due to UniFi (HSBB) and specific direct cost items. Normalised EBITDA margin of 33.9%1

BAU capex of RM124m (5.8% of operating revenue), lower 43.1% YoY due to enhanced capital efficiency; HSBB capex of RM152m

High growth of internet and data revenues (up 9.8% and 8.4% YoY respectively), making non-voice now the major revenue contributor to TM

+11.4% yoy growth in broadband customers, 54k net adds in 1Q10

Voice revenue has slowed down 8.3% YoY as compared to 12.9% in the preceding quarter YoY

EBITDA margin calculated based on Normalized EBITDA and Operating revenues plus other operating Income of RM30.9m in 1Q20101

5

Financial Performance

Key Operating Indicators

Financial Highlights

Successfully launched UniFi in March

First triple play offering in the country

Take-up as planned with over 2,000 customers

Customer satisfaction of 84% since launch

Transformational for TM and nation building

6

Successful Launch of UniFi

2007 2008

Capital Expenditure, excluding HSBB1

Cash Balance

Total Debt

RM bnOur capital management approach is guided by two major principles :

• Striving to optimize capital productivity and ROIC

• Creating shareholder value

1.8 1.4 1.2

1 BAU Capex only (excludes HSBB Capex)2 Credit ratings by Standard & Poors (S&P) and Rating Agency Malaysia (RAM)

Active Capital Management Approach

6.87.0

6.7

2.2 2.13.5

21.2 16.7 14.1

Capex / Revenue ratio( %)

2009 1Q10

0.1

5.8

6.5

Credit Rating2 A-/AAA A-/AAA A-/AAA A-/AAA

3.9

7

Performance Overview

Financial review

Operating highlights

Concluding remarks

8

RMmn

Reported

Comments

1Q10 1Q09 Growth YoY 4Q09 Growth QoQ

Revenue 2,124.9 2,105.4 +0.9 2,272.6 -6.5Decline QoQ mainly from lower bandwidth sales and absence of MERS999 revenue

Other Operating Income 30.9 28.2 +9.6 55.5 -44.3 -

EBITDA 715.3 816.2 -12.4 757.7 -5.6Lower YoY due to higher A&P,manpower and supplies & material

EBITDA margin 33.2% 38.3% -5.1pp 32.5% +0.7ppMargin lower YoY due to higher operating cost & UniFi related cost

Depreciation 456.8 519.7 -12.1 494.9 -7.7Lower QoQ & YoY due to revision of useful life of assets

Net Finance Cost 72.3 30.2 +139.4 56.5 +28.0Higher cost YoY due to absence of interest income from Axiata

FX (Gain) / Loss 166.6 (175.5) +194.9 (47.3) +452.2Ringgit strenghten to RM3.261 from RM3.424 in 4Q09

Profit Before Tax 352.6 91.3 +286.2 253.6 +39.0 -

PATAMI 242.9 27.7 +776.9 170.2 +42.7 -

Note: EBITDA Margin is calculated as percentage of EBITDA against Total Revenue + Other Operating Income

9

Group Results 1Q10

1Q 2009 4Q 2009 1Q 2010 Comments (YoY)

Operating Revenue (RM mil) 2,105.4 2,272.5 2,124.9

Other Operating Income (RM mil) 28.2 55.5 30.9

Direct Costs % 19.6 19.9 21.7 • Higher international o/payment

RM mil. 412.9 451.2 461.2 • Content cost related to UniFi

Manpower % 18.8 17.0 19.3• Annual increment • Higher headcounts related to HSBB

RM mil. 396.3 387.3 410.6 • ESOS cost on Axiata options

Supplies & Materials % 3.6 6.8 5.2 • Higher cable cost due to higher copper prices, equipment & parts purchasedRM mil. 77.0 153.7 111.2

Bad & Doubtful Debts % 1.8 0.5 1.6 -

RM mil. 38.9 10.9 35.1 -

Marketing Expenses % 3.2 6.2 4.1• Higher A&P for product promotions & UniFi related activitiesRM mil. 66.5 140.4 87.7

Other Operating Costs % 15.6 18.8 15.5 -

RM mil. 327.8 426.9 329.8 -

Depreciation & Amortisation % 24.7 21.8 21.5 • Lower capex spend•Lower due to revision of assets’ useful life RM mil. 519.7 494.9 456.8

Total (RM mil) 1,839.2 2,065.4 1,892.6

Total (% of Operating Revenue) 87.4 90.9 89.1

Other (Loss) / Gain (net) 2.1 - (4.7)

Cost % of Revenue

10

Increase in cost YoY driven by planned UniFi related expenses and other specific direct cost

In RM mn 1Q09 2Q09 3Q09 4Q09 1Q10

Reported EBITDA 816.2 824.1 705.0 757.7 715.3

Non Operational

ESOS Cost 4.5 7.4 9.3 (9.9) 11.7

(Appreciation)/ Diminution in value of quoted shares

(6.2) (20.4) (9.8) (19.7) 4.7

(Gain)/ Loss on sale of Assets - (51.4) - 3.6 -

Normalised EBITDA 814.5 759.7 704.5 731.7 731.7

Normalised EBITDA Margin 38.2% 34.6% 33.2% 32.7% 33.9%

Reported EBITDA Margin 38.3% 37.5% 33.2% 32.5% 33.2%

Normalised EBITDA

11

Normalised EBITDA margin up 1.2pp QoQ

12

BAU Capex / Revenue ( %)

Group Capital Expenditure

BAU Capex HSBB Capex*

RM mn

4Q08 FY09 1Q10 Total

516

1,338152 2,006

Total HSBB Capex* Spent to Date

Note : BAU – Business As Usual Note : HSBB – High Speed Broadband* Gross amount which is shared with Government

Capex guidance remains.Spending to increase in the following quarters

109168

55

153

68

155

38

13140

86

31

49

0

100

200

300

400

1Q09 4Q09 1Q10 Budget 1Q10

Access Core Network Support System

RM mn

10.3 18.0 5.8

218

409

124

333

15.3

28

15464

287

59

268

25

244

15

123

63

165

0

200

400

600

800

1Q09 4Q09 1Q10 Budget 1Q10

Access Core Network Support System

RM mn

152

545

102

696

7,568.4

150.5

8,526.8

5,664.6

1,666.4

1,180.3

15.5

16,245.7

6,804.1

1,896.7

491.8

3,895.6

520.0

4,363.0

2,883.2

883.4

596.4

2,441.1

12,215.4

1,589.2

16,245.7

6,987.5

142.5

8,371.5

5,796.9

1,588.7

985.9

-

15,501.5

6,180.0

1,781.0

503.0

3,490.7

405.3

4,441.0

2,934.6

916.6

589.8

1,739.0

12,329.9

1,432.6

15,501.5

Shareholders’ Funds

Minority Interests

Deferred & Long Term Liabilities

Long Term Borrowings

Deferred Tax

Deferred Income

Derivative financial liabilities

Current Assets

Trade Receivables

Other Receivables

Cash & Bank Balances

Others

Current Liabilities

Trade and other Payables

Short Term Borrowings

Others

Net Current Assets

Property Plant & Equipment

Other Non-current Assets

RM MillionAs at 31 March 2010 As at 31 Dec 2009

13

1

31 March 2010 31 Dec 09 31 March 10 31 Dec 09Return on Invested Capital 6.60% 6.74% Debt to EBITDA 2.29 2.16

Return on Equity 5.09% 6.70% Gross Debt/ Equity 0.86 0.96

Return on Assets 5.09% 3.70% Net Debt/ Equity 0.35 0.46

Current Ratio 1.56% 1.39% Net Assets/Share (sen) 213.3 197.2

1

31 Mar 10

1 Based on Normalised PATAMI

31 Mar 10

Group Balance Sheet & Key Financial Ratios

31 Dec 09 31 Dec 09

Note : USD 260; USD 465mn; USD 300m; Fx Rate 3.26151 2 3

USD denominated

RM denominated

2010 2013 2014 2018 2025

RM mn

1

2

3

849

2,000

1,535

925 976

Debt Maturity Profile

Continue to optimize through active capital management

Performance Overview

Financial review

Operating highlights

Concluding remarks

14

Total Revenue by Line of Business

15

Global Others

1Q10

FY09

Wholesale

RM mn

1Q09

201

4Q09

193

1Q10

190

-1.6%

-5.5%

RM mn

1Q09

67

4Q09

65

1Q10

68

+4.6%

+1.5%

RM mn

1Q09

216

4Q09

274

1Q10

202

-26.3%

-6.5%

Retail

RM mn

1Q09

1,621

4Q09

1,741

1Q10

1,665*

1

1

-4.4%

+2.7%

Retail78%

Global10%

Wholesale9%

Others3%

Retail78%

Global10%

Wholesale9%

Others3%

Wholesale & Global revenue declined due to lower contribution from VoIP & Data

1

2

2

22

Note: Total revenue & breakdown is after inter-co eliminationinclude MERS 999 revenueadjusted since last reporting due to customer classification2

1

829 822 791 770 768

189 172 194 180 208

385 398 415399 420

243 254 247450 333

0

500

1000

1500

2000

1Q09 2Q09 3Q09 4Q09 1Q10

Voice Data Internet Others

Total Revenue By Products

RM mn

1,6401,638

Note : Breakdown is before inter co elimination

1Q10

1,641

1,741

Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination

RETAIL

1,665

Revenue by Product Revenue by Business Unit

FY09

16

Consumer33%

SME25%

Enterprise24%

Government18%

Consumer34%

SME25%

Enterprise24%

Government17%

Growth in Internet & Data and stabilization of Voice QoQ

Total Revenue by Product

17

1Q09

Voice

RM mn

1,034

4Q09

964

1Q10

948

1Q09

Others

RM mn

4Q09 1Q10

319

480357

*

1

1Q10

FY09Data

RM mn

1Q09 4Q09 1Q10

367

427 398

-6.8%

+8.4%

-25.6%

+11.9%

1Q09

Internet

RM mn

4Q09 1Q10

385402

423

+5.1%

+9.8%-1.6%

-8.3%

Voice44%

Data19%

Internet20%

Others17%

Non-Voice contribution increased due to higher internet subscribers & demand for bandwidth

Voice46%

Data18%

Internet19%

Others17%

Note: Total revenue & breakdown is after inter-co eliminationinclude MERS 999 revenue1

1

1,133 1,165 1,135 1,163 1,212

200 206 263 268 273

0

500

1,000

1,500

2,000

1Q 09 2Q 09 3Q09 4Q09 1Q10

Residential Business

In thousand

1,333 1,370 1,398 1,431

18

In thousand +0.6%

4,290 4,320

+11.4%

4,331

-0.1%

4,321

1,485

+3.8%

4,316

Physical Highlights

Broadband Customers Growth

Fixed Customers Growth

WiFi Hotspot Zones

2,784 2,792 2,797 2,767 2,763

1,506 1,528 1,534 1,554 1,553

0

1,000

2,000

3,000

4,000

5,000

1Q09 2Q09 3Q09 4Q09 1Q10

Residential Business

Attractive bundle packages & pricing improved Net Adds

ARPU (RM) 1Q09 2Q09 3Q09 4Q09 1Q10

Business* 74 78 73 67 64

Residential* 21 21 20 19 20

Streamyx Broadband** 87 86 89 86 86

771 796 8251,345 1499

499 507 525

724746

1Q09 2Q09 3Q09 4Q09 1Q10

Other States Klang Valley

1,270 1,303 1,350

2,0692,245

+76.8%

+8.5%

*Call Usage Only** Streamyx Gross ARPU only

+54

Net adds (in thousand)

+33+28+37

Performance Overview

Financial review

Operating highlights

Concluding remarks

19

20

Key Takeaways

Capital Management

Broadband

UniFiSuccessfully launched the FIRST triple play offering,

which now has more than 2k customers taking up the packages

Stronger sales momentum with 54k net adds

Active capital management approach including prudent capex spend, healthy cash level of RM3.9bn and a

committed dividend policy

Customer CentricityCommitted to spend at least 5% of revenue for

improvement in quality of customers’ experience

Appendix

7794 83 73 69

123

139

107 129 134

12

22

1419 16

0

50

100

150

200

250

300

1Q09 2Q09 3Q09 4Q09 1Q10

Voice Data Others

Total Revenue By Products

RM mn

228

189

1Q10

176

193

Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co eliminationOthers : Include Internet

WHOLESALE

FY09

190

Revenue by Product Revenue by Customer Segment

ASP17%

MC83%

ASP19%

MC81%

MC : Malaysia Carrier (new name for Domestic Career) ASP : Application Service Provider

22

12991

127 122 113

96

108

97

161

100

5

70

5

5

0

100

200

300

400

1Q09 2Q09 3Q09 4Q09 1Q10

Voice Data Others

Total Revenue By Products

RM mn

185

212 214

274

GLOBAL

Revenue by Product Revenue by Region

202

FY09

Africa & Middle

East8%

America14%

Europe7%

South Asia42%

North Asia12%

Oceania6%

Others11%

Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co eliminationOthers : include Internet

1Q10

Africa & Middle

East9%

America6%

Europe12%

South Asia42%

North Asia12%

Oceania7%

Others12%

23

In RM mn 1Q09 2Q09 3Q09 4Q09 1Q10

Reported PATAMI 27.7 266.0 179.1 170.2 242.9

Non Operational

ESOS Cost 4.5 7.4 9.3 (9.9) 11.7

(Appreciation)/ Diminution in value of quoted shares

(6.2) (20.4) (9.8) (19.7) 4.7

(Gain)/ Loss on sale of Assets - (51.4) - 3.6 -

Unrealised Forex (Gain)/ Loss on long term loans

175.5 (123.2) (45.5) (47.3) (166.6)

Net (Gain) / Loss on Debt management (32.6) (13.7)

Reversal of Excess Current / Deferred Tax Provision

(1.6) 0.6 (8.5) 14.4 -

Normalised PATAMI 199.9 79.0 92.0 97.6 92.7

Normalised PATAMI

24

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THE ENDAny queries please email to : investor@tm.com.my

•Investor Relations• Level 11 (North Wing)• Menara TM •Jln Pantai Bharu •50672 Kuala Lumpur, Malaysia • Tel (603) 2240 4848/ 7366 / 7388