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Telekom is spoilt by years of monopoly of line telecommunications. People should boycott this service provider to force it to lower its rates further. Its advertising rates on its subsidiary Yellow Pages like its rental charged for telephone lines are exorbitant. It should be made a lean and mean organization with the downsizing of deadwoods who are in it for welfare cheques a legacy of a government organization and still is in spirit of third world mentality. Boycott and soon these analysts will be crying to sell.

You still hate Maxis, after all these years

ABN Amro (March 29 06)

Maturing nicely (overweight)

Malaysian telcos present an interesting mix of stable domestic cash flows and potentially sizeable foreign growth. Recent worries about domestic overcrowding and overly aggressive overseas expansion are unwarranted, in our view.

We believe concerns about the entry of new players are overdone

The MCMC has issued two new 3G licences, raising concern about a crowded market and competitive pressures. We highlight that we do not view the entry of new players
as a significant threat to Maxis and Telekom Malaysia.

The new players face significant entry barriers, such as high Malaysian mobile penetration rates, a
significant interconnection fee structure and limited margin and coverage potential from MVNOs. New players also need time to establish their distribution network,
branding and infrastructure given they have no existing mobile business. We believe
these barriers will prevent new players from encroaching upon Telekom Malaysia and Maxis's profitability.

Foreign investments are catalysts

We expect recent forays outside Malaysia to have a positive impact by diversifying
profits and providing new growth avenues through low-penetration countries. With the exception of Maxis' Natrindo Telepon Seluler, we expect all recent forays to be earnings accretive over the next three years. Since the investments have been
generally earnings accretive from FY07 onward, we see the Malaysian telcos skipping the typical downcycle of asset consolidation as previously experienced by Singtel
during the early stages of its expansion spree.

Valuations are attractive, in our view

We re-initiate coverage of Telekom Malaysia and Maxis with Buy recommendations
and target prices of RM11.0 (+16%) and RM9.60 (+12%), respectively, based on our
sum-of-the-parts valuations. We forecast balance sheets will remain strong even with
the significant capital outlays related to both companies' foreign acquisitions.

We also see dividend yields remaining sustainable even with the recent acquisitions and expansion. We initiate Digi at Hold with at a target price of RM8.55 (-3%). Although
valuations are attractive and dividend yield strong, we remain concerned about the company's long-term competitiveness in the absence of a 3G license.

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Jeff,

Buy on TM :) LOL ... i hope people are not banking too much on the new venture rumours we'd talked about last week.

I think if it's confirmed, 3 weeks from now, we'll hear official news from the other party. But this is a litle earlier to have a BUY call!!!!

Agree with UOB-Kay Hian advice on 2 0f 3. Like goks, I won't go with BUY on TM because it's still run like a typical Gomen mentality (like many GLCs!) not keeping [pace with free market competition. Why venture, so aggressively overseas esp India forays, when locally its services are still very mcuh up to customers' expectatuions? And detailed information, esp meaningful financials,on these foreign adventures is not that forthcoming or encouraging.

oops, left out key word ... "...when locally its services are still very mcuh NOT up to customers' expectatuions..." Sorry, eh!

desiderata,

You have a point, but int he race to expansion, one doesnt wait to tidy his own house before looking into owning someone elses house!!

TM did screw up in some of the apst ventures. It's local service for Mobile is actually good, coverage wise, average or below average for customer service.

Ofcourse, the rest of TM's business like adsl etc, has much to improve.

But most companies alike will not stop from expansion if they have $$$. Having allot of $$$ is not good [:D] ..heheheh!!

I strongly beleive this BUY call is based on a new venture that is being finalised now. However, it's very daring for the analyst to do a buy call when TM has NOT concluded and officially signed a partnership on this new venture

I'll keep my money for 3 more weeks and wait for any official news!!!

Forget the technical analysis. Malaysia's stock market's performance was very poor in the last year, the most dismal in South East Asia despite steady economic growth. Therefore price momentums don't mean anything, instead stick to strong fundamentals.
For this reason, I would still be bullish on the long term prospects of Maxis and might even short TM on the uptick.