SESSION 2022/2023 (A221)

BPMN3023 STRATEGIC MANAGEMENT

GROUP E

ASSIGNMENT 1: STRATEGIC AUDIT REPORT OF

TELEKOM MALAYSIA

PREPARED BY: GROUP 11

NO NAME MATRIC NO.

1 BARATI A/P R.GUNALAN 272904

2 SUTANTA JOHAN 268904

3 MUHAMMAD AMIRUL NAIM BIN MAT 273377

RIDZUAN

4 ZUHRI NAUFAL FAWWAZ 268914

5 SHANTENE SUBRAMANIAM 272881

PREPARED FOR: ASSOCIATE PROFESSOR DR KADZRINA ABDUL KADIR

SUBMISSION DATE: 22 JANUARY 2022

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Table of Content

1.0 Company Details……………………………………………………………………...……….3

1.1 Company Profile………………………………………………………………………3
1.2 Company Background………………………………………………………...………3
1.3 Vision, Mission, Objectives, Current Strategies…………………………...………….5
1.4 Board of Directors……………………………………………………………..………6
1.5 Top Management Team……………………………………………………………….7
1.6 Type of Organizational Structure…………………………………………...………..10
1.7 Organizational Structure………………………………………………………….….11
2.0 Recent Development…………………………………………………………………...…….12
3.0 Financial Analysis…………………………………………………………………...……….14
3.1 Current Ratio………………………………………………………………...………14
3.2 Debt to Equity…………………………………………………………………….…15
3.3 Profit Margin………………………………………………………………….……..15
3.4 Return to Asset………………………………………………………………………16
3.5 Return on Equity………………………………………………………….…………17
3.6 Dividend Coverage………………………………………………………...………..18
3.7 Financial Ratio Reason…………………………………………………...…………18
4.0 Industry Analysis……………………………………………………………….……………18
4.1 STEEP Analysis………………………………………………………….………….19
4.2 5 Forces Competitive Model………………………………………………...………19
5.0 SWOT Analysis…………………………………………………………….………………..20
6.0 TOWS Analysis……………………………………………………………...………………25
7.0 Strategic Issues………………………………………………………………………………25
7.1 Cause of Issues………………………………………………………...……………..27
7.2 Recommendations……………………………………………………………………28
7.3 Benefits of Recommendations……………………………………………………….29
8.0 Best Strategies based on Analysis………………………………………………...………….30
9.0 Conclusion………………………………………………………………………………...…31
10.0 Reference……………………………………………………………………………...……32

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1.0 Company Background

1.1 Company Profile

Telekom Malaysia Berhad (TM) is the leading integrated telco in Malaysia and the country's
national provider of connectivity and digital infrastructure, which is working to enable Digital
Malaysia by providing a full range of communication services and solutions in fixed (telephone
and broadband), mobile, content, WiFi, cloud, data centre, cybersecurity, IoT, and smart services.
The goal of TM is on providing an improved customer experience via ongoing customer service
quality improvements and innovations, while concentrating on increasing operational efficiency
and productivity.

TM is driven by stakeholder value generation in a highly competitive market.As the driving force
behind Digital Malaysia, TM has led every national advancement in telecommunications
technology and will do so going forward. With the largest convergent connection network and
digital infrastructure, it serves as Malaysia's communications backbone and is a digital centre for
ASEAN. TM is still devoted to serving an increasingly digitally oriented society, economy, and
government.

1.2 Company Background

TM Net

TM emerged as Malaysia's second Internet service provider (ISP) in 1995, behind only MIMOS
and its Jaring service. Information and communications technology applied research is offered
through MIMOS. The launch of TMB's service, TM Net, signalled the company's evolution into
an integrated telecommunications service provider.

The introduction of COINS, a multimedia networking solution based on Asynchronous Transfer

Mode (ATM) technology, was one of the Multimedia Super Corridor's (MSC) primary
developments towards this end. This development was one of several fundamentals for the
Multimedia Super Corridor's (MSC) successful innovation.

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Streamyx

Following the TM Net, TMB introduced CDMA (code division multiple access) fixed wireless
telephony in 2001 together with the production of Streamyx, the first broadband service for a
lifestyle online portal. The largest Internet service provider (ISP) in Southeast Asia was named
that year as TM Net.

Unifi

Internet, telephony, and IPTV services are combined to form Unifi, also known as HyppTV. On
March 24, 2010, Unifi, the country's first HSBB service, was introduced. Fiber-to-the-home
(FTTH), ethernet-to-the-home (ETTH), and extremely high-speed digital subscriber line 2 all
provide last-mile connectivity to homes and businesses (VDSL2). The HSBB network roll-out has
been praised by BT Teleconsultant, a UK-based telco consultancy company, as one of the most
rapid and affordable in the whole globe.

HyppTV featured a total of 124 channels as of November 2015, 49 of which were in high definition
(HD). These channels included 57 premium channels, 22 free channels, five radio channels, 15
VOD channels, and 25 interactive channels. These channels were available in a number of bundles
or à la carte.

The government granted TM phase 2 contracts for the High-Speed Broadband (HSBB2) and
Suburban Broadband (SUBB) projects in 2015 so that TM could build domestic core networks and
provide end-to-end broadband network infrastructure and services.

1.2 Logo

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1.3 Vision, Mission, Objective and Current Strategies

"To make life and business simpler, for a better Malaysia," is the mission statement of Telekom
Malaysia Berhad. In contrast, Telekom Malaysia's vision is broken down into three parts: Life
Made Easier for Customers, Businesses, and the Nation. Customers' lives are made simpler in the
first place by convergent lifestyle and communication experiences. The second half is for
enterprises, where TM works with them and offers integrated solutions to make life simpler. The
last component is TM supporting socio-economic growth by delivering life-improving social
initiatives to the country via education and innovation.

They mainly focused on few objectives which is overcoming issues with minimal net additions of
consumers in a competitive retail environment,concentrating on allowing both the public and
commercial sectors to realise their full digital potentials and to increase income from both home
and international markets. TM has three (3) strategic pillars of growth which is Converged Services;
Simple and Digital; and Lean and Lower Cost. These are enabled by TM’s integrated network
infrastructure and digital platforms. They mainly focused on few objectives which is overcoming
issues with minimal net additions of consumers in a competitive retail environment,concentrating
on allowing both the public and commercial sectors to realise their full digital potentials and to
increase income from both home and international markets.

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1.4 Board Of Directors

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1.5 Top Management Team

COMMERCIAL & TECHNOLOGY

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CORPORATE FUNCTIONS

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Governance

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1.6 Type of Organizational Structure
A hierarchical structure is the chain of command within a company that begins with senior
management and executives and extends to general employees. This organization of authority
ensures management levels understand their relationships with each other and helps companies
make efficient decisions. There are two types of hierarchical structure which is functional and
divisional structure. Particularly, TM implements divisional organizational structure.A divisional
structure enables companies to separate large sections of their business into independent divisions
typically around product, market, or geographical groups. These divisions then operate as self-
autonomous companies within the larger corporation with all the resources.

First, divisional structure allows workers to concentrate on their own areas and increase the
effectiveness of their job (Robbins & Judge, 2010). According to the departments' areas of
expertise, the Executive Director or Deputy Group Chief Executive Officer of Telekom Malaysia
gives them various responsibilities. The personnel are required to abide by the rules, policies, and
practises that are in place in their particular department. For instance, the executive vice president
of TM One appoints certain divisions, including sales, technology, finance, and strategy. (TM One
2019) From the bottom of the company to the top, every department reports. The board of directors
of TM makes all of the decisions. The functions and standing on the board of directors, in
accordance with the organisational structure, clearly delineate responsibilities to maintain his
position of power within the firm, and other employees do not have unfettered freedom to make
decisions.This might slow down organisational decision-making and information
misinterpretation.

Additionally, the workers will always turn into followers. This is due to Telekom Malaysia
Berhad's potential to impact our nation's growth as a Government Linked Company (GLC).
Because Telekom Malaysia has to maintain and attain the greatest performance in their firm, they
utilise the GLC transformation handbook, which is standardised to make sure that all workers have
practise. While performing their tasks, the personnel start to lack creativity and original thought.
This is due to the fact that they lack decision-making authority and are more likely to follow
directions from upper management.

Last but not least, the worker will use prudence when doing their duties. This is due to the TM
code of corporate ethics being implemented by Telekom Malaysia. The employee is required to

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abide by this code. While working, they should demonstrate or practise strong business ethics. If
an employee violates this code or engages in incorrect, dishonest, or unlawful business behaviour,
they risk facing disciplinary action. (Telekom Malaysia Berhad, unknown date) For instance,
bonus deduction, firm firing, or termination. As a result, it might make their duties simpler to
facilitate and eliminate errors or blunders.

1.7 Organizational Structure

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2.0 Recent Development

There are number of strategic planning and implementation ongoing in Telekom Malaysia in order
to achieve the objectives of the company.

i. Partnership with Cisco

Telekom Malaysia has partnership with Cisco to accelerate 5G innovation, digital acceleration of
SMEs in Malaysia. Telekom Malaysia has inked two collaboration agreements with Cisco
International Ltd to co-invest in projects for 5G innovation and the digital acceleration of small
and medium enterprises (SMEs).The partnership is part of Cisco’s Country Digital Acceleration
(CDA) programme, which is a strategic partnership with governments worldwide to accelerate
their national digitalisation agendas. The partnership with Cisco focuses on three key pillars which
are digital transformation in the public sector specifically education, which will be launched in
near future, digital transformation for service providers that focuses on 5G innovation, and thirdly
digital transformation for SMEs.

Under the agreements, Cisco and TM will build a 5G-as-a-service centre of excellence to
springboard 5G adoption and develop proof of concepts for enterprises and vertical industries. To
accelerate digital transformation for SMEs, Cisco and TM will also drive a joint digital solution
seeding programme for selected SME customers.These solutions will range from the Internet of
Things (IoT) to business analytics solutions for SMEs in the retail, education, and manufacturing
sectors. Successful deployments will be showcased to broaden adoption within the SME ecosystem.
Cisco will also launch a digital talent development initiative focused on introducing digital talent
to Application Programming Interfaces (APIs) and training on how to navigate its cloud-based
network, Cisco Meraki, as well as other mentoring opportunities and hackathon events," the
statement read.

TM would be first company to partner with Cisco in bringing the CDA programme to Malaysia,
which has the potential to benefit enterprises, consumers and over 400,000 SMEs.TM's Unifi
revenue should still be sustainable by tapping into the mass market as its nationwide network
expansion is complete and on further coverage of 4G. The reopening of the economy is boosting
its B2B revenue as corporates, small and medium-scale enterprises and the government sector

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continue to upgrade their digitalisation. The 5G deployment is expected to further boost its sales
ahead being the nation's preferred network infrastructure provider.

ii. Internal Reorganisation

Telekom Malaysia has announced an internal reorganisation which involves the transfer of its
domestic businesses to a single operating entity named TM Technology Services (TM Tech), with
this expected to be complete by 31 December 2023. In a press release detailing the plans, Telekom
Malaysia said the restructuring which includes Unifi, TM One and TM Wholesale, among others
marks ‘the next phase of the Group’s transformation to be the enabler of a digital Malaysia, and o
further improve its operational efficiencies, streamline processes and simplify customer
touchpoints to provide a more seamless customer experience’.

TM Tech will be led by the company’s existing senior management team and will bring together
its diverse talents under a single company, encouraging greater agility and cross-functional
collaboration to improve service quality. Meanwhile, Telekom Malaysia Berhad will now serve as
an investment holding company for this operating entity, with all other subsidiaries within the
Group ‘to remain status quo’. Similarly, all of Telekom Malaysia’s partnerships, vendor and
service agreements will remain in effect.

As digital lifestyles, increasing competition and stakeholder expectations reshape the industry,
consolidating these businesses into one operating entity will allow Telekom Malaysia to serve the
diverse customer segments better and deliver their needs more quickly. Furthermore, this
reorganisation aligns the company to industry’s best practices and will improve Telekom
Malaysia’s competitive edge among Malaysian and international Telcos and digital players, as the
company continue to pursue aspiration of becoming a leading human-centred TechCo.

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3.0 Financial Analysis

(Financial Ratio have been stated in the Annual Report Page 6)

3.1 Current Ratio

The current ratio, a liquidity ratio, calculates how well a company can meet short-term or annual
commitments by dividing a firm's current assets by its current liabilities. In general, a ratio below
1 means that the company's short-term assets are likely to generate more debt than cash during the
next year. In the 2019 financial year, TM has RM1.30 available to pay off debt for every RM1 of
existing debt where it shows a consistent trend on the following year too. This stipulates that TM
has improved collections, a quicker turnover of inventories, or that TM was potential to reduce
debt. A drag on the firm's profitability is expected due to the current ratio's higher volatility, which
increased from 1.3 to 1.1 in the financial year between 2020 and 2021. This might be a sign of
higher operational risks. Since TM has a higher proportion of short-term asset value compared to
its short-term liabilities, the lower the current ratio, the less capable TM is of meeting its
commitments.

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3.2 Debt to Equity

The debt-to-equity ratio (D/E), which measures a company 's economic strength, is determined by
dividing its total liabilities by the value of its shareholders. The D/E ratio quantifies the amount of
debt a business has incurred in relation to the value of its assets after deducting obligations. In the
2019 financial year, D/E ratio was RM1.40 for every RM of equity. Thus, the high D/E ratio,
which is linked to higher investment risk and shows that TM depends heavily on debt financing.
The ratio continuously reduced over time, reaching 1.0 in the fiscal year 2021. A D/E ratio of less
than or equal to 1 would be regarded as reasonably secure. Less reliance of TM on debt eventually
resulted in efficiency in the economy due to the continually declining ratio.

3.3 Profit Margin

Profit margin, which is calculated by dividing net income by net sales, is used to determine how
profitable a firm or commercial activity is. Analysts and investors may assess TM's financial health
and well-being using its profit margins. As we could see, the profit margin increased from the
financial years 2019 and 2020 from 4.9% to 9.2%. This indicates that for every RM of sales made
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during the financial year 2020, TM earned a net profit of RM0.092. In the financial year 2021,
when net sales were RM 11,529.00, TM's profit margin decreased to 7.6%. Essentially, a price
change for internet packages for TM in the financial year 2021 may only be feasible to the extent
necessary to maintain the company's competitive advantage in the market, whilst also sales growth
remains reliant on market structure such as overall demand for internet services, the company's
share of the market, and the positions and plans of competitors.

3.4 Return on Asset

Return on assets (ROA) is used to measures on how effectively a business uses its assets to produce
a revenue. ROA can bedetermined by dividing a company’s net income by its total assets. ROA
increased from 2.6% to 4.10% from financial year of 2019 to 2020. Each RM that TM invested in
assets yielded RM 4.10 in net income. TM was more successful in turning its investment into
profits in the financial year of 2020 than it was in the 2019 and 2021. A higher ROA demonstrates
that TM is more productive and competent in controlling its balance sheet to produce profits. A
declining ROA in the financial year 2021 of only 0.3% suggests that TM may have overinvested
in assets that have not produced higher income.

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3.5 Return on Equity

Return on Equity (ROE) is a metric used to determine how profitable and effective a company is
at turning a profit. Dividends from shareholders' equity are used to determine the ROE as a metric
of financial success. The ROE of TM jumped from 8.5% to 14.0% in the 2020 financial year. This
greatest ROE in comparison to the other two financial years suggests that TM's management was
operating at its best degree of efficiency in terms of producing income and growth from its equity
funding during that year. Then, in the financial year 2021, ROE significantly decreased to 12.2%.
The ROE for that year is impacted by the fact that the profit attributable to equity holders of TM
Company declined from financial year 2020 to 2021 from RM 1,016.0 million to RM 895.2 million.

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3.6 Dividend Coverage

The ratio of the firm 's gross profit to the dividend paid to shareholders is known as the dividend
coverage ratio. Dividend cover can be measured by dividing net income with dividend declared.
A healthy dividend coverage ratio is greater than 1, and in this case, TM's dividend cover is good
by default. The dividend cover significantly increased to 1.9 in the 2020 financial year. The higher
dividend cover highlights that TM's profits are higher than in the previous financial year, allowing
it to pay out more dividends to shareholders. The graph then dropped down by 0.1, showing that
TM can pay its dividend 3.9 times over using operating cash flow where the stakeholders will
receive relatively less dividend.

3.7 Financial Ratio Reason

Analyzing all three years, it can be concluded that year 2020 performed the best in all aspects
compared to 2021 and 2019. The profit for the financial year 2020 is RM 996 million whereas TM
recorded RM877.9 and RM557.4 million for the rest of financial years of 2021 and 2019
respectively. The huge increase in the revenue on that financial year is due to Covid 19 outbreak
where people had to maximize the utilization of internet packages. People tend to stay at home and
get connected with friends and family from distance which leads to high volume of new subscribers
and usage of TM services.

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But, financial year 2021 was the first year of TM Transformation Programme (2021-2023) where
manpower optimisation acts as one of the key levers in right-sizing and right-skilling the
organisation to future-proof the Group with future-ready skills and a digital workforce. At RM
2,577.5 million, the Group’s net of staff cost capitalised in financial year 2021 remains stable at
the 22.4% ratio to the Group’s revenue, similar to 2020. The 6.3% (RM152.2 million) increase
year on year in absolute terms, was at the back of the Group’s expenditures from the various
manpower optimisation programmes which at the end of the year was already showing results
including a reduction in manpower headcount year on year, from > 21,000 as at the end of 2020
to > 20,000 at the end of 2021.

4.0 Industry Analysis

4.1 STEEP Analysis

A STEEP analysis is a tool used to analyze the external factors that can have an impact on a
business or organization.

i. Social

This includes factors such as demographics, population growth, cultural norms and values, and
lifestyle trends. Demographics of Malaysia are becoming more diverse, and it has a growing
population of tech-savvy, young adults. This could drive demand for the TM internet and
digital TV services, as well as mobile services as well. On the other hand, there could be
increased concerns around privacy and data security among consumers, which could lead to
greater scrutiny of the TM’s data collection and storage practices.

ii. Technological

This includes factors such as advancements in technology, the internet and communication
networks, and the development of new products and services. The rapid advancements in
technology have been a major trend in recent years. 5G networks and IoT technologies are
increasingly being implemented and this could open up new opportunities for TM to expand
its services, such as providing IoT connectivity solutions for industrial and commercial clients.

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 On the other hand, there is also an increased competition from new technologies and startups
that could erode the company's market share.

iii. Economic

This includes factors such as economic growth, inflation, interest rates, and the overall state of
the economy. Malaysia's economy is not relatively stable in recent years, and changes in the
global economy also could impact the company's revenue and profitability. For example, a
global economic downturn possibly could lead to reduced consumer spending, resulting in a
decrease in demand for TM’s services.

iv. Environmental

This includes factors such as climate change, natural disasters, and regulations related to the
environment. TM is dependent on a large number of physical assets and infrastructure, which
could be affected by natural disasters such as floods or earthquakes, and changes in weather
patterns. The company's operations generate a significant amount of carbon emissions and
waste. This could lead to increased regulatory pressure for the company to reduce its
environmental footprint, as well as reputational risks if the company is perceived as not being
environmentally responsible.

v. Political

This includes factors such as government policies, regulations, taxes, and political stability.
Telekom Malaysia is majority-owned by the government of Malaysia, and it may be subject to
political influence in terms of its operations and decision-making. Changes in government
policies or regulations could also affect the company's operations and revenue. It is also
important to note that the recent trend of digitalization could lead to the government taking an
active role in cyber security issues and data protection.

4.2. 5 Forces Competitive Model

The Five Forces model, developed by Michael Porter, provides a framework for analyzing the
competitive forces within an industry. By understanding these forces, companies like Telekom

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Malaysia can identify the key drivers of competition and make strategic decisions to improve their
competitive position.

i. Threat of new entrants

The telecommunications industry requires significant capital and infrastructure investments,

which can be a barrier to entry for new firms. Additionally, the company benefits from
economies of scale, so the larger the company, the more cost-efficient they are. Telekom
Malaysia as a large telecommunications company has advantages that new entrants would have
to overcome, making the threat of new entrants relatively low.

ii. Threat of substitute products or services

The telecommunications industry is highly competitive, with many companies offering similar
services, such as mobile services, internet services, and digital TV services. These substitutes
could have a significant impact on Telekom Malaysia's revenue and profitability if customers
choose to switch to a different provider which offer relatively low priced internet services.

iii. Bargaining power of customers

The ability of customers to negotiate lower prices or better terms can be a significant challenge
for companies. In the telecommunications industry, customers have a lot of choice and can
easily switch providers if they are unhappy with the service or the price. As a result, Telekom
Malaysia may need to focus on providing high-quality services at competitive prices in order
to retain customers and prevent them from switching to other providers.

iv. Bargaining power of suppliers

The bargaining power of suppliers can also have an impact on a company's competitiveness.
In the telecommunications industry, suppliers may include companies that provide the
equipment and technology used to deliver services. However, Telekom Malaysia with its size
and buying power, may have a relatively low bargaining power of suppliers.

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 v. Competitive rivalry

The degree of competition among existing companies in the industry is a key driver of
competitiveness. In the telecommunications industry, the competition is fierce, with many
companies competing for customers and market share. Telekom Malaysia will need to be
aware of the strategies and actions of its competitors in order to remain competitive.

By analyzing the five forces, Telekom Malaysia can identify areas where it has a relative advantage
or disadvantage and make strategic decisions that will help it to improve its competitiveness. The
company could also consider potential partnerships or collaborations with other companies in the
industry in order to improve their position. This could also involve innovating in new technology
or service offerings to meet customer demands.

5.0 SWOT Analysis

SWOT Matrix of Telekom Malaysia

Strengths Weakness

- Ability to provide high speed services - Over reliant on local market

- Strong brand in telecommunication industry - Not accessible to all area

Opportunities Threats

- Expansion of services to other countries - Strong competition in the industry

- Expose the brand to global consumers - Decline sales after Covid- 19

i. Strength

TM's ability to provide high speed broadband service to its consumers is one of the company's
greatest strengths. TM places a high priority on speed in its internet service in order to assist clients

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who wish to make the most of their service without encountering any difficulties. TM utilises an
upgrade mechanism that allows customers to increase their internet speed from 30 megabits per
second (Mbps) to 100 megabits per second (Mbps) at no additional cost. TM's many internet
package options come at a premium price. despite the fact that the speed of 100 Mbps is not always
accessible everywhere.

TM is a strong brand to be compared with as one of the telecommunications companies in Malaysia

due to the fact that their internet service is one of the faster ones in the country. In comparison to
other brands of telecommunications services, the services that are offered provide clients with a
level of satisfaction that encourages them to continue using TM. In addition to this, when compared
to other Malaysian carriers, TM provides the widest variety of services possible. Due to the fact
that TM has been operating in Malaysia for such a significant amount of time, they are able to have
network extensions inside the country. Consequently, the reason why TM has clients and is so
well-known in Malaysia is because they consistently provide deals as a result of their heritage.
More specifically, the majority of TM's personnel in the communications and multimedia
industries were formerly employed by Telekom.

ii. Weakness

The fact that TM is overly reliant on the market in Malaysia is one of the company's greatest
weaknesses. Even though TM has a lot of relationships and is very much liked by the people of
Malaysia, it might create difficulty in the future if TM does not extend their services to nations
outside of Malaysia. Even though TM has a lot of relationships and is very much loved by the
people of Malaysia. Taking into account the fact that in today's world, other operators already have
coverage both in the United States and internationally, there is obviously a better chance to expand,
rather than merely being stationary in one location.

If TM only focuses on the market in Malaysia, this may be good for Malaysia, but it will not be
good for TM in the long term. This is because TM's other competitors will continue to develop
and issue the latest innovations that cannot be competed with, and this will be a disadvantage for
TM because it cannot compete with these innovations.

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In today's technologically advanced world, it is to a company's interest to broaden the scope of the
products and services they offer so that they can compete more effectively in the market for those
goods and services. In order for TM to be successful in expanding the size of its operators not only
in Malaysia but also in other countries, TM will need to turn this vulnerability into a strength.

Furthermore, Telekom Malaysia has no sufficient line coverage to all the rural areas. This makes
the customers to find it difficult to maximise the internet usage. The subscribed packages are not
worth since the customers could not use them in crucial situations where the internet line is not
completely accesible. This may cause Telekom Malaysia to lose loyal customers where they tend
to jump to other companies’ services where the line coverage is stable.

iii. Opportunities

In light of the fact that TM is extremely reliant on the market in Malaysia, an opportunity that TM
may capitalise on is the expansion of the broadband market throughout the world. By having
additional booths that it may operate in different countries, TM will be able to expand its target
market outside Malaysia, which will be beneficial to the company. There is no requirement to
target markets on a worldwide scale; rather, it is sufficient to concentrate on markets located on
the continent of Southeast Asia in order to make TM a better and more effective emphasis.

In addition, expanding the market for broadband services will result in more exposure for these
services, which will have a positive influence not just in the United States but also internationally.
TM is well-known for its operations in terms of maintaining consistent internet speeds, providing
extensive internet coverage, and making it possible to have an internet connection practically
everywhere in Malaysia. Things may improve even further in the event that TM looked at
expanding its operators to other countries, including as Indonesia, Singapore, Thailand, and others.
TM has the potential to gain further benefits and might very well become a venue for the analysis
of international markets.

iv. Threats

The strain of competition, which leads to a crisis in pricing, is the danger that TM faces. What is
meant by this is that rivalry amongst rivals may surely have both beneficial and bad affects on a
company, whether it be to aid in the company's performance in competition or to bring about the

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firm's destruction. However, the risk that may be ranked as the number one priority is pricing
adjustments brought about by the crisis of declining customers, since packages given by rival
operators are more lucrative. This is the danger that has the potential to be ranked as the highest
priority.

TM has the majority of customers who subscribed to utilise internet use packages with the most
typical 30Mbps plan supplied. Nevertheless, the majority of consumers do not use the full capacity
allowed, which can be a loss for customers. TM is working to address this issue. As a result, TM
is susceptible to financial losses due to the fact that customers may believe the package that TM
offers is not proportionate with what it is that they desire.

On the other hand, during Covid-19 outbreak, the sales of Telekom Malaysia’s sales through
services was really high. This is because there was a need for the customers to get connected with
loved ones with technology where Telekom Malaysia was their main choice in order to
communicate. Once the customers get familiar with the services and tend to notice the lack of line
coverage, there are number of them who unsubscribe the internet packages of Telekom Malaysia.

6.0 TOWS Analysis

i. Strength to Opportunities

TM is well-known for its ability to acquire the absolute finest talent, which enables the company's
employees to enhance their performance at work and to make the best possible decisions inside
the business. Then, with this, TM is in a position to seize an opportunity to make consumers who
are unhappy with the subscription packages given by TM more satisfied by offering packages that
are more diverse and superior.

It is hoped that the presence of talented workers at TM will allow it to overcome the problems of
customers who want to switch to other operators by providing a solution or guarantee for regular
customers. One example of this would be providing discounts for three months of subscription or
new machine tools that have more features than the machine that was used previously. Considering
that TM's customer service is of a high quality, it is possible for the company to market its wares

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to all residents of Malaysia. In this way, if at a later date there are customers who have the
impression that something is lacking, they can file a complaint, and TM will respond appropriately
to their concerns. With the expectation that consumers would continue to subscribe to TM and that
this will result in more revenue compared to the past.

ii. Strength to Threats

The use of technology to investigate potential new products and market niches is one of TM's four
digital transformation foundations. The other three are digital integration in processes, digital
integration in marketing and customer relationship management, and digital integration into the
value chain. Keeping this in mind enables TM to overcome dangers that have the potential to turn
into losses in the future and give solutions that will result in profits.

In this day and age, with the proliferation of technological disruptions, it might originate from
hacking, piracy, or any number of other activities. It has the potential to make businesses all over
the world feel threatened by the possibility that their data will be made available to the general
public. However, taking into consideration that TM has very high security and has maximised their
operations in digital transformation, this existing threat may be very easy for TM to overcome,
taking into consideration that the power possessed by this TM is very useful for existing threats.

iii. Weakness to Opportunities

When compared to the activities of the company's competitors in the Communication Services
business, Telekom Malaysia has a high cash cycle. In order for businesses to be more profitable,
lower their inventory expenses, and increase their competitiveness in the market, they need to
shorten their cash cycles by 12%. This demonstrates that TM has to be more careful with how they
spend their money in order to avoid getting into a high cash cycle, which has the potential to result
in losses for the TM firm in the future.

However, TM is able to find a solution to this issue by optimising the analysis in order to get a
competitive edge. TM has already invested time and financial resources into the development of
machine learning for the service communications industry. Using this information, TM is able to
maximise its competition analysis, which enables the company to make strides in the area of
consumer rights, produce goods that are pertinent to the market, and construct supply chains of the

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highest quality. With the help of this glimmer of optimism, TM may be able to transform their
shortcomings into an opening to solve the challenges they are now facing.

iv. Weakness to Threats

TM is overly reliant on employing individuals who are experienced and have high levels of
expertise, but it also hires far too many personnel who are functional experts rather than
management generalists. This leads to a strategy that is product-oriented rather than market-
oriented or consumer-oriented. This may constitute a vulnerability for TM's internal processes
since it poses a potential challenge to those procedures. The getting to know TM platform, on the
other hand, makes use of machine learning to support the creation of ever more complicated
technologies.

There is a possibility that the learning curve for Telekom Malaysia may be significantly lengthier
for the training and development of current personnel. This may create opportunities for more agile
rivals in the Communications Services sector of the market. Which, in this case, can turn TM's
shortcomings into an opportunity to solve internal problems by adopting their internal component
by training personnel in line with the laws they offer.

7.0 Strategic Issues

The important challenge that faced by TM as we know is that Telekom Malaysia faced huge losses
in financial year 2019. This has been announced by Telekom Malaysia itself in one of articles that
has been published by Digital News Asia on 22nd February 2019. Telekom Malaysia also stated
that the revenue for the whole year also drop by 2.2%. (Bursa Malaysia)

7.1 Cause of Issue

i. Cost

Telekom Malaysia believes that this caused by the impairment asset that is too costly due to
industry and economic conditions nowadays. Finance cost during fourth quarter also one of the
reasons why the profit for Telekom Malaysia drop heavily. The revenue for the fourth quarter also
declines compare to the previous quarter because of decrease on data, Internet and non

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telecommunication related services. Furthermore, declining in revenue and profit is one of the
challenges that faced by the Telekom Malaysia.

ii. Competitors

Besides, competitors also can be a huge challenge to Telekom Malaysia. The Edge Financial Daily
reported that the government want to enhance competition in telecommunications sector. The
Malaysian Reserve stated that foreign telecommunication companies have expressed interest to
participate in the local fibre fixed-broadband market and intensifying competition among the
existing broadband service providers should challenge Telekom Malaysia Bhd’s market
dominance and profitability.

Digi is a top competitor of TM. Digi operates in the Fixed-line Telecommunications Services
industry. Digi has 24,410 fewer employees than Telekom Malaysia. This can reduce the expanses
of the company. Other than that, Axiata also one of biggest rivals. Axiata is in the Wireless
Telecommunication Services industry. Axiata generates more revenue compared to Telekom
Malaysia. This can be price war between the telco to compete with each other to gain more profit.

iii. Limited Coverage

Telekom Malaysia also faced problem in technological limitation. Telekom Malaysia is under
pressure in order to fulfil customer demands and government request, which is to increase the
speed of broadband with lower prices. Hence, Telekom Malaysia also have a difficulty in order to
cover all non-Unifi area. This is because, around 180,000 users cannot access to Unifi and
Streamyx. Therefore, if Telekom Malaysia can find solutions for this problem occurred, they can
increase their profit and revenue for upcoming years.

7.2 Recommendations to Strengthen Competitiveness and Financial Performance

i. Expand coverage

Telekom Malaysia should expand their coverage of the internet to the rural area too. This is
because community at rural area also are the users of internet in order to connect to the world.
Telekom Malaysia is looking forward to a collaborative "win-win” approach with the government
to resolve the challenges faced by its Streamyx customers once and for all; by the Malaysian

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reserve on 17 October 2018. The telecommunications company said Streamyx was still running
on a copper legacy network and was facing many challenges such as technological limitations,
with a maximum delivery speed of up to 8Mbps. Telekom Malaysia said it has upgraded nearly
50% of over 340,000 Streamyx customers residing in UniFi coverage areas to UniFi at the same
price of their current plan.

ii. Portable Wi-Fi

Telekom Malaysia already have wireless Wi-Fi but it is not portable and convenient to use. Thus,
it is advised to develop a portable wi-fi that a simple and yet sufficiently accurate device. Telekom
Malaysia can produce a portable Wi-Fi based on some of the characteristics as an initiative to
attract their customers. Portable Wi-Fi a device that should be lighter, portable to carry anywhere
and battery powered. It also could be measured and transferred data by Wi-Fi to any devices or
laptop.

iii. Price

It is also doubling Streamyx speed at the same price of customers’ current broadband plan for free,
for those in non- UniFi areas. Telekom Malaysia is expected to complete the speed upgrade which
is available to about 180,000 Streamyx users.To date, Telekom Malaysia , TIME dotCom Bhd,
Maxis Bhd and Celcom Axiata Bhd have introduced broadband entry-level packages priced below
RM100. Besides that, before this, Telekom Malaysia had expanded their service with communities
at Sri Alam, Sarawak, where they can enjoy Telekom Malaysia’s Unifi high speed broadband on
January 2018.

7.3 Benefits of Recommendations

i. Expanding Coverage

Telekom Malaysia must be in line with others telecommunication service providers such as
Celcom and Yes. If Telekom Malaysia providing the service to the other areas such as rural areas,
Telekom Malaysia will achieve their vision and mission which is to keep people connected in more
ways than one. People that live in the rural areas will get more involved in their communities and
the chance to be connected as in personal life or business life. It will give the benefit to Telekom

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Malaysia as it will attract more people to subscribe to the plan provided by them. As mentioned in
an article written by Peter and Younjun 2018, providing the coverage in rural areas, will give an
impact to the economic growth in that areas. Economic growth in the sense of, entrepreneur will
start to open their business, and students can use internet in learning and gaining knowledge and
company from outside will widen their business in the area. With this, people will keep connected
and keep subscribing to the Telekom Malaysia plan and eventually will increase the profit of the
company.

ii. Portable Wi-Fi

Portable Wi-Fi is one of the most preferred by consumer since it is convenient and easy to carry
wherever they go. With providing this service with high quality, it can increase the revenue and
profit of Telekom Malaysia which also will make Telekom Malaysia having the most subscribers
in this country. People will look forward for this type of convenient portable Wi-Fi as it is the new
important technology that everyone should have in order to survive in this 21 st century.

8.0 Best Strategies Based on Analysis

i. Acquisition Strategy

Review of sales and distribution methods will improve direct sales resources, Wireless products
will stop churn, Broadband price will be adjusted while addressing frequent pain points. Telekom
Malaysia was incorporated to pursue international business opportunities and provide international
facilities on resale of common carrier services in Singapore. It will be used to develop bilateral
relations with all carriers and also serve as Telekom Malaysia’s gateway to the Singaporean market
for business development activities.

ii. Marketing Strategy

Telekom Malaysia should prioritize values and benefits over product features by conducting
campaigns to provide clients with attractive perks as well as delivering convergence with a full
range of services. Thus, promotions and special discount of internet packages will make Telekom
Malaysia to grow more financially since it is the core product for consumer category of the product
and Telekom Malaysia have created new product for TMHP. TMHP is focus on low ECP which
that have more cable to encourage their new customer who not installed the fixed line.

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iii. Verticalization Strategy

TM need to understand customers’ need according to industry and business environment and offer
tailor-made digital solutions targeted at specific verticals in order to increase sales effort on high-
value verticals and key accounts. Among other verticals, leading BFSI and oil & gas companies
are building their digital transformation strategies as the foundation for sustained growth. While,
the BFSI sector has leveraged digital extensively over the years, there is continued focus on
adopting technologies that can enable improved cost of operations, streamline processes and create
better customer experience. Big Data and AI tools are being deployed extensively by banks in the
region to ensure greater compliance as well as gain deeper customer insights to identify cross-sell
opportunities. Besides, emerging technologies like blockchain, continue to transform the industry,
in a way that may completely disrupt traditional banking in years to come.

9.0 Conclusion

In overall, Telekom Malaysia has been performing well in terms of strategic plannings and
execution of management’s decisions. From the thorough financial and theory analysis, we could
conclude that Telekom Malaysia has the potential to be a well recognised telecommunication
company in the global market. The competitive advantages and the brand of TM would be a pride
and honour to Malaysia where TM’s services should be high in quality and accessible wherever
we are. Telekom Malaysia’s high technology and the solutions it brings to the community is most
welcomed by the government and the public for a bright future.

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partners-cisco-accelerate-5g-innovation-digital-acceleration-smes-malaysia

CANERKEK, A. (2019, February 18). What is SAP TM module? SAP Blogs. Retrieved January
22, 2023, from https://blogs.sap.com/2019/02/18/what-is-sap-tm-module/

Robust topline by Telekom Malaysia extended to 2023? (n.d.). Retrieved January 22, 2023, from
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Telekom Malaysia - investor relations. Telekom Malaysia - Investor Relations. (n.d.). Retrieved
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Plc, G. D. (n.d.). Telekom Malaysia Bhd Company Profile - Overview. GlobalData. Retrieved
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Naulleau, M. (2018, September 25). When TM strategy is not self-evident: Action research with a
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Eng, S. (2022, June 15). Here's how Malaysia is stepping up our ESG efforts. TM One. Retrieved
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Team, M. B. A. S. (2020, April 12). Telekom Malaysia SWOT analysis, competitors & USP. MBA
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service-providers/2530-telekom-malaysia.html

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