MSAP and lower broadband prices will impact Telekom — RAM | The Edge Markets

KUALA LUMPUR (June 29): Mandatory Standard Access Pricing (MSAP) is going to have a “most pronounced impact” on the financial position of Telekom Malaysia Bhd, as its implementation would lower wholesale prices on high speed broadband (HSBB) access for the other telecommunication companies, said RAM Rating Services Bhd.

“This would allow the telcos to cut the prices of their broadband packages, thereby compelling Telekom to revise theirs accordingly to remain competitive. As it is, competition is intensifying — with a noticeable shift in consumer preferences to mobile and wireless broadband,” RAM said in a note today, noting the retail broadband segment constitutes the bulk of Telekom’s top line (FY Dec 2017: 44%).

On June 20, the government announced that broadband subscription rates could be reduced by 25% by year-end pursuant to the implementation of the MSAP.

RAM noted that Telekom could see a gradual 25% reduction in broadband subscription rates over the next two years, flat subscriber growth and further debt drawdown for capital expenditure and dividends.

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MSAP and lower broadband prices will impact Telekom — RAM | The Edge Markets.