TELEKOM MALAYSIA BERHAD

TM Today

Latest Updates

About TM

2

ANALOG

ERA

DIGITAL TECHNOLOGY

FULL-IP

TRANSFORMATION

at the leading edge of telecommunications in Malaysia

3

TM TODAY*…

MALAYSIA’S CONVERGENCE CHAMPION

No.1 Broadband provider in Malaysia

2.37mn broadband customers

RM12.06bn revenue as at FY2016, with 2.9% growth

More than 2.23mn HSBB fiber ports

373.43% Total Shareholder Return since demerger

• As at 31 December 2016• TSR as at 29 March 2017

4

Commercial launch of webe mobile service in Sept 2016

Latest Updates

TM 30th AGM 30 April 2015

Our Vision

Our Brand Values

Refocused PIP3.0

Our Guiding Values & Principles

Realigning our strategy: A refreshed Vision Statement aligned

toward Delivering Convergence and Life/Business Made Easier

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Our digital transformation supported by Convergence

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Delivering Convergence and Going Digital for

Smarter Living, Smarter Businesses, Smarter Cities, Smarter

Communities and a Smarter Nation

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WE ARE STRATEGICALLY PLACED TO REALISE OUR CONVERGENCE AND

GOING DIGITAL ASPIRATIONS AS WE MOVE BEYOND CONNECTIVITY

B2B2C

B2B

DELIVER

GO DIGITAL

Smarter

BusinessesSmarter

Living

Smarter

Cities

Smarter

Communities

Smarter

Nation

1 2 3 4 5

&

• webe’s network made commercially available to the public from 30th September 2016

• To date more than 2,000 sites operational

• Drive momentum toward Convergence by expanding product portfolios and digital services

webe: TM’s Mobility Centre of Excellence

10

Implementation of speed upgrade and introduction of new packages for non-Unifi customers in phases over 2017

Broadband Improvement Plan 2017

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Areas are indicative and not to scale

KUALA TERENGGANU

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KANGAR

ALOR STAR

IPOH

SHAH ALAM

MELAKA

KUANTAN

KUALA LUMPUR

Klang

Valley

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©KOTA KINABALU

KUCHING

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Less populated areas

Zone 2 – SUBB

Zone 1 – HSBB & HSBB2

LEGEND

High economic impact areas

Urban/Semi-urban and rural

Industrial parks/FTZs

SEREMBAN

JOHOR BAHRU

Northern

Corridor

Economic

Region

Iskandar

Malaysia

Zone 3

Zone 3

Zone 3 – USP

HSBB and SUBB Project

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KOTA BHARU

PENANG

State capitals/major towns©

• Target: 390,000 ports by end-2017 • More than 280,000 ports covering 86 exchange areas delivered to date

• Target: 420,000 ports by end-2019• More than 210,000 ports covering 152 exchange areas delivered to date

HSBB 2

SUBB

TM 31st AGM 28 April 2016

About TM

and

Performance Highlights

Capital StructureCredit Rating

Total Return To Shareholders

• Authorised Capital: RM3,528,003,015.00• Issued and Paid-up Capital: RM2,630,554,376.00• Date of Incorporation: 12 October 1984• Date of Listing: 7 November 1990

81.85%FBMKLCI1

373.43%TM1

19.24%AXIATA2

94.35%MAXIS3

257.54%DIGI1

• A3Moody’s

• A-S&P

• AAARAM

Source: Bloomberg1 For the period 22 April 2008 – 29 March 20172 For the period 25 April 2008 – 29 March 20173 For the period 18 November 2009 – 29 March 2017

• As at 29 March 2017• Foreign Shareholding as at 28 February 2017• EPF: Employees Provident Fund Board• Amanah Raya Berhad – for Skim Amanah Saham Bumiputra

About TM..

14

35%

12%12%

15%

26%

259 307 286

1,257 1,154

350 310 300

1,240 1,185

4 Q 1 5 3 Q 1 6 4 Q 1 6 F Y 2 0 1 5 F Y 2 0 1 6

Reported EBIT

Normalised EBIT

193 160 154

700 776

262 208 270

905 848

4 Q 1 5 3 Q 1 6 4 Q 1 6 F Y 2 0 1 5 F Y 2 0 1 6

Reported PATAMI

Normalised PATAMI

3,184 2,923 3,237

11,722 12,061

4 Q 1 5 3 Q 1 6 4 Q 1 6 F Y 2 0 1 5 F Y 2 0 1 6

Revenue

+1.7%

+10.3% (Normalised -14.1%)

RM mn

+10.7%

-6.9% (Normalised -3.29%)

Key FY2016 Highlights

Revenue

EBIT

PATAMI

Note : Unless stated otherwise all figures shall be inclusive of Webe15

-19.8% (Normalised +2.9%)

-3.4% (Normalised +30.1%)

+2.9%

-8.2% (Normalised -4.4%)RM mn

RM mn

+10.8% (Normalised -6.3%)

701541

697

2,178 2,317

4Q15 3Q16 4Q16 FY2015 FY2016

741 662 732

2,670 2,745

4Q15 3Q16 4Q16 FY2015 FY2016

862 919 951

3,367 3,668

4Q15 3Q16 4Q16 FY2015 FY2016

880 801 857

3,507 3,330

4Q15 3Q16 4Q16 FY2015 FY2016

16

Group Total Revenue by Product

Voice

Internet

Note : Unless stated otherwise all figures shall be inclusive of Webe*Total revenue is after inter-co elimination.

RM mn

RM mn

Data

Others*

*Others comprise other telco and non-telco services (i.e ICT-BPO, MMU tuition fees, customer projects)

RM mn

RM mn

Voice28%

Internet 31%

Data23%

Others*18%

FY 2016

Voice28%

Internet27%

Data23%

Others*22%

FY 2015

+2.8%-1.2%

+10.4%

+8.9%+10.3%

+3.5%

+6.4%-0.6%

+28.8%

-2.6%

+7.0%

-5.0%

RM11,722mn

RM12,061mn

561 433 573

1,871 1,928

4Q 15 3Q 16 4Q 16 FY2015 FY2016

1,187 1,095 1,205

4,373 4,484

4Q 15 3Q 16 4Q 16 FY2015 FY2016

1,275 1,264 1,309

4,950 5,106

4Q 15 3Q 16 4Q 16 FY2015 FY2016

Group Total Revenue by Customer Clusters

17

Mass Market Managed Accounts

Note: Unless stated otherwise all figures shall be inclusive of Webe

RM mn RM mn

Global & Wholesale Others*

*Others include revenue from Property Development, TM R&D, TMIM, UTSB, MKL & Webe

Mass Market

42%Managed Accounts

37%

Global & Wholesale

16%

Others*5%

FY 2016

Mass Market

42%Managed Accounts

37%

Global & Wholesale

16%

Others4%

FY 2015

RM mnRM mn

+2.7%

+3.6%

+3.2% +1.5%

+10.0%

+2.5%

+2.1%

+32.3%

+3.0% -8.0%

+13.7%

+2.8%

162 131 149

528 543

4Q15 3Q16 4Q16 FY2015 FY2016

RM11,722mn

RM12,061mn

1509 1506 1501 1501 1487 1465 1448 1421

757 782 793 839 877 900 921 949

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16

Streamyx UniFi

Stronger UniFi net adds and ARPU

18

Physical Highlights

Broadband

UniFi ARPU (Blended) Streamyx Net ARPU

+1.3%

0.0%

Cu

sto

me

rs (

In t

ho

usa

nd

)A

RP

U (

RM

)

UniFi customer base expanded to over 949,000 customers

ARPU growth due to upselling and higher buys of Premium Channels

2,288 2,294 2,340 2,364 2,3652,266 2,369

190

86 87

192

89

190

89

192

89

194190

89

197 201

92

2,370

90

22.2% 21.9% 21.5% 21.0% 20.6% 21.6%

18.8% 19.3% 18.8% 18.0% 18.3% 18.7%

21.4% 20.4% 22.2% 22.6% 21.8% 21.7%

11.7% 11.7% 11.7% 10.4% 10.0% 11.4%

5.9% 6.2% 5.8% 6.2% 6.6%6.0%

6.0% 6.7% 6.6% 9.1% 7.4% 7.2%3.3% 4.1% 3.7% 3.5%

3.3% 3.6%1.0% 0.6%

-0.7%

0.4%1.4%

0.3%

1Q16 2Q16 3Q16 4Q16 FY2015 FY2016

Dep & Amortisation Direct cost Manpower

Other operating cost Maintenance Supplies & materials

Marketing Expenses Bad debt

59237 350

550

1188 1196

162

260237

790

784

1449

97

123128

322

533

670

1Q16 2Q16 3Q16 4Q16 FY2015 FY2016

Core Network Access Support Systems

Note : Unless stated otherwise all figures shall be inclusive of Webe

Cost % of Revenue1

RM mn

Group Capital Expenditure

FY 2016 CAPEX & OPEX

Capex / Revenue (%)

19

Total Cost / Revenue (%)

1 Revenue = Operating Revenue + Other Operating Income

10,588.2 11,037.32,795.92,616.9

90.3%

2,644.1 2,980.4

90.9% 89.6% 91.2% 89.4% 90.5% 11.1% 20.4% 24.5% 51.3%

620318 715 1,662

RM mn

21.4% 27.5%

2,505 3,315

20

Group Cash Flow

Note : Unless stated otherwise all figures shall be inclusive of Webe

RM mn FY 2016 FY 2015

Cash & cash equivalent at start 3,510.8 2,975.0

Cashflows from operating activities 2,848.6 2,942.0

Cashflows used-in investing activities (3,259.5) (2,549.9)

Capex 3,314.5 2,505.5

Cashflows from financing activities (206.8) 142.5

Effect of exchange rate changes 32.1 1.2

Cash & cash equivalent at end 2,925.2 3,510.8

Free cash-flow (EBITDA – Capex) 474.1 1,188.9

RM millionAs at

31 Dec 2016As at

31 Dec 2015

Shareholders’ Funds 7,692.3 7,780.6

Non-Controlling Interests 140.2 258.1

Deferred & Long Term Liabilities 11,194.4 10,551.8

Long Term Borrowings 7,662.6 7,175.4

Derivative financial instruments 301.9 321.9

Deferred tax liabilities 1,514.8 1,367.6

Deferred income 1,711.4 1,661.7

Trade and other payables 3.7 25.2

19,026.9 18,590.5

Current Assets 6,887.5 7,297.5

Trade Receivables 2,357.1 2,353.1

Other Receivables 801.1 594.0

Cash & Bank Balances 2,926.0 3,511.6

Others 803.3 838.8

Current Liabilities 5,974.7 5,822.6

Trade and Other Payables 4,103.0 4,367.0

Short Term Borrowings 700.7 408.3

Others 1,171.0 1,047.3

Net Current Assets/(Liabilities) 912.8 1,474.9

Property Plant & Equipment 16,010.6 15,186.9

Other Non-Current Assets 2,103.5 1,928.7

19,026.9 18,590.5

Group Balance Sheet

Note : Unless stated otherwise all figures shall be inclusive of Webe 21

Headline KPI

22

2017 Mid Term

Revenue Growth1

EBIT Growth1

Customer Satisfaction Measure2

3.5 – 4% 3.5% - 4%

Maintain 2016 RM level

3.5 – 4%

73* 73

2 Using TRiM index measuring end to end customer experience at all touch points. TRiM (Measuring, Managing and Monitoring) is astandardized indicator system. It analyzes, measures and portrays stakeholder relationships on the basis of standardized indicators. TheTRI*M Index is an indicator of the status quo of a particular relationship. The index is made up of four points of view on the stakeholderrelationship, e.g. for customer loyalty: overall rating, recommendation, repeat purchasing of product/services, and a company's competitiveadvantage. The information is based on surveys/interviews on a sample customer base.”

1 These KPIs are for TM including Webe. 2 This KPI excludes Webe for 2017.

Appendix

23

11,235

11,722

12,061

FY2014 FY2015 FY2016

Revenue

Revenue EBIT

EBITDA PATAMI

RM mn RM mn

RM mn RM mn

+4.3% +2.9% -2.9% (Normalised -10.6%) -8.2% (Normalised -4.4%)

+1.6% (Normalised -1.3%) +2.5% (Normalised +3.9%)-15.8% (Normalised -4.9%) +10.8% (Normalised -6.3%)

Note: Unless stated otherwise, all figures shall be inclusive of Webe

Group Results: 3-Year Performance

24

1,294 1,257 1,1541,387

1,240 1,185

FY2014 FY2015 FY2016

EBIT Normalised EBIT

3,636

3,694

3,789

3,7253,677

3,820

FY2014 FY2015 FY2016

EBITDA Normalised EBITDA

832700

776941 905 848

FY2014 FY2015 FY2016

PATAMI Normalised PATAMI

FY2014 FY2015 FY2016

*”Others” comprise other telco and non-telco services i.e ICT-BPO, MMU tuition fees, customer projects, Yellow Pages

Note: Unless stated otherwise, all figures shall be inclusive of Webe

28%

23%

27%

22%

RM mn RM mn RM mn RM mn

Internet Others*VoiceData

+12.4%

Change in revenue mix: non-voice revenue now 79%

Internet Data

3-Year Performance: Revenue by product

25Voice Others

RM11,235mn RM11,722mn RM12,061mn

2,995 3,367 3,668

FY2014 FY2015 FY2016

+8.9%

2,6062,670

2,745

FY2014 FY2015 FY2016

+2.5% +2.8%

2,165 2,178

2,317

FY2014 FY2015 FY2016

+1.1% -5.1%

3,469 3,507

3,330

FY2014 FY2015 FY2016

+0.6% +6.4%

28%

30%

30%

19%31%

23%

27%

19%

Capex & Opex: 3-Year Performance

Total Capex

3,315

Capex / Revenue (%)

*Include Application, Support System & Others (building, land improvement, moveable plants, application & other assets)

Cost % of Revenue1

10,588.2

89.4%

RM mn

Total Cost / Revenue (%)

1 Revenue = Operating Revenue + Other Operating Income

Note: The classification of cost is as per financial reporting

27.5%

RM mn

11.037.3

90.5%

10,095.1

88.6%

1,836

16.3%

2,506

21.4%

3-Year Performance: Capex & Opex

26

694

1188 1196

662

784

1449

480

533

670

FY2014 FY2015 FY2016

Core Network Access Support Systems

20.6% 20.6% 21.6%

16.5% 18.3% 18.7%

21.0%21.8% 21.7%

11.0%10.0%

11.3%

7.4% 6.6%6.0%

6.9% 7.4%7.2%

3.2% 3.3%3.6%

2.0% 1.4%0.3%

FY2014 FY2015 FY2016

Bad debt

Marketing Expenses

Supplies & materials

Maintenance

Other operating cost

Manpower

Direct cost

Dep & Amortisation

1,502 1,501 1,421

729 839 949

FY2014 FY2015 FY2016

Streamyx UniFi

In thousand

+4.9%

2,3702,231 2,340

+1.3%

Broadband

Evolving UniFi customer mix: more on 10Mbps or higher

Below 10Mbps10Mbps and above

3-Year Performance: Physical Highlights

27

88%

12%

FY2013

21%

79%

FY2016

webe mobile and webe broadband plans

28

Telekom Malaysia Berhad ("the Company" or "TM") issues a statement to reiterate its stand on the Company's dividend policy. The

Company’s dividend policy as announced at the time of the demerger between TM and TM International Berhad (TMI) remains

valid. The policy states as follows:

“In determining the dividend payout ratio in respect of any financial year after the Proposed Demerger, our Company intends to

adopt a progressive dividend policy which enables us to provide stable and sustainable dividends to our shareholders while

maintaining an efficient capital structure and ensuring sufficiency of funding for future growth.

Upon completion of the Proposed Demerger, our Company intends to distribute yearly dividends of RM700 million or up to 90% of

our normalised PATAMI, whichever is higher.

Dividends will be paid only if approved by our Board out of funds available for such distribution. The actual amount and timing of

dividend payments will depend upon our level of cash and retained earnings, results of operations, business prospects,

monetization of non-core assets, projected levels of capital expenditure and other investment plans, current and expected

obligations and such other matters as our Board may deem relevant.”

This policy remains unchanged for 2009 and beyond. The Company is currently able to meet this dividend policy, because:

• The Company has sufficient consolidated cash and bank balances of RM1.144 billion as at 30 September 2008, and it is

confident that TMI is able to meet its obligation due to TM of RM4.025 billion by April 2009.

• In the event of a downturn in performance due to unforeseen circumstances, the Company wishes to state that its recurring cash

generation ability is sufficient to meet its current dividend policy.

• TM’s retained earnings is also sufficient to support this current dividend policy in the event of unforeseen shortfalls in normalised

PATAMI.

Given the unprecedented volatility in global markets, the Company will continue to examine the likely impact on its business,

cashflow generation, capital structure and methods in which excess cash beyond the dividend policy and prudent level of cash

required for operations, can be efficiently distributed to our shareholders.

Moving forward, TM is focused on building a strong foundation for its future growth and operational excellence.

TELEKOM MALAYSIA BERHAD (Bursa Malaysia Announcement Reference No TM-081113-37325)

Date Announced :13/11/2008

Reiteration of Dividend Policy

29

Shareholder Returns (2009-2015)

30

1 2016 1st Interim Dividend of 9.3 sen per share and 2nd Interim Dividend of 12.2 sen per share2 Net Dividend Yield based on closing share price at year end3 Exclused Capital Distributions/Repayment

Dividend Payout Policy of RM700mn or up to 90.0% of Normalised PATAMI whichever is higher

RM mn

Payout Ratio3 (%)

Net Dividend Yield2 (%)

6.5%5.6%

4.0%3.2%

4.7%

3.3% 3.2%3.6%

150.9%

124.2%110.5%

79.6% 89.9% 90.5% 88.9% 95.3%

468.3

563.7634.8

881.0

1,038.5

941.2894.9

847.9

706.5 700.3 701.2787.0

993.7

846.8804.2 808.0

1,037.4 1,073.2

2009 2010 2011 2012 2013 2014 2015 2016

Normalised PATAMI Ordinary Dividend Capital Repayment

1

TM Group Debt Profile

31

Key Financial Ratios

1 Based on Normalised EBIT2 Based on Normalised PATAMI

Note : Unless stated otherwise all figures shall be inclusive of Webe

31 Dec 16 31 Dec 15

Return on Invested Capital1 6.25% 6.69%

Return on Equity2 10.03% 11.66%

Return on Assets1 4.80% 5.90%

Current Ratio3 1.15 1.25

WACC 7.17% 7.36%

31 Dec 16 31 Dec 15

Gross Debt to EBITDA 2.10 1.90

Net Debt/EBITDA 1.25 1.02

Gross Debt/Equity 1.09 0.97

Net Debt/Equity 0.71 0.52

Net Assets/Share (sen) 204.7 207.0

681

925

9

756 800 850 912

1,200

1,644

584

3

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2034

RM mn

TM Group Debt Maturity Profile as at 31 Dec 2016JPY denominatedRM denominatedUSD denominatedCDN denominated

USD

20.11%

MYR

79.85%

Others

0.04%

Debt Currency Mix

• Total debt as at end Dec 2016: RM8.36bn • Average cost of debt: 5.06% (FY15: 4.28%)• Forex hedged: USD200mn equivalent & ¥7,800mn (47% from total foreign currency

borrowings) • Total forex unhedged: USD310mn equivalent (20.1% from total borrowing) [Yankee

Bond, Tulip Sukuk, Webe’s Deutsche Loan, Bank Loan & CIDA Loan].

THANK YOUInvestor Relations

Level 11 (South Wing), Menara TMJalan Pantai Baharu50672 Kuala Lumpur

MalaysiaTel: (603) 2240 4848/ 7366 / 7388

investor@tm.com.my