A REVAMP in Telekom Malaysia Bhd (TM) is afoot to restore investors’ confidence in Malaysia’s largest fixed line operator after its new head honcho clocked in on Thursday.
In an exclusive interview with the New Straits Times , newly-appointed managing director and group chief executive officer Datuk Noor Kamarul Anuar Nuruddin revealed his plans that could turn the struggling firm around and deliver “quick wins” as soon as this year.
TM, which lost around RM5 billion in market capitalisation between July 31, 2017 and the end of last month (before the recovery in the share price over a report that a new CEO would step in), has hardly grown in revenue.
With competition more intense than ever, last year saw the group’s earnings drop to its lowest point in history. Its quarterly earnings have not breached the RM300 million mark since the first quarter of 2016.
TM, however, made a significant growth in net profit in the first quarter of this year due to its cost saving strategy, but Noor Kamarul is convinced that it would not be sustainable.
“How long can you save cost?” he asked.
“The revenue was still down. This is why I was brought in. My goal is for the revenue to grow and bring it back to its glory days as soon as possible — getting the quick wins.”
Noor Kamarul said the pain for TM, for example, was its failure to extend connectivity coverage with the right medium, while keeping Internet signal strong and seamless for consumers.
“TM had always limited its options when building connectivity. It had been focusing only on one medium to set up Internet coverage, but failed to make returns on the investments when they found out later that the cost was way higher than the revenue.
“This is why TM has been left far behind (in the competition). It failed to use the right strategy at the right time. When it implemented its strategy, other operators were already far ahead.
“In comparison, we can see that Celcom has 10,000 sites, while TM has only around 4,000 sites that build coverage. We need to keep up. With the right strategies, we can build upon what we have and grow our revenue.”
As such, Noor Kamarul said, TM would focus on three basic winning strategies — providing quality products, competitive tariff/prices and good customer experience.
Firstly, he added, it would require TM to change its mindset of how it worked in the past.
He said one of his big plans for TM was to explore all mediums to build connectivity, including wireless (5G/4G, satellite and microwave) with sufficient bandwidth, as well as wired LAN (copper and fibre), depending on area density and costs, apart from providing content that customers want. This, he hoped, would increase the nation’s Internet coverage at the right cost, while keeping connectivity stable.
“It does not stop there. There will be more to come. The next important key is to provide customers personalised services, giving content that customers want.
“We will address the Streamyx issue and TM’s mobile business, which did not make money.”
Noor Kamarul said other strategies for TM moving forward included reviewing contracts with its partners and vendors to see whether they were in its favour, as well as looking into other leakages that had been hurting revenue.
‘Govt didn’t interfere in vetting process’
TM chairman Rosli Man said the appointment of its new chief executive went through a thorough recruitment and selection process.
Refuting allegations that the group’s corporate governance in the appointment was a red flag, he said TM had sought candidates who had the ability and attitude required to achieve its turnaround goal.
Rosli clarified that the government did not interfere in deciding who should take the hot seat.
On Thursday, TM announced the appointment of Datuk Noor Kamarul Anuar Nuruddin as its new managing director and group chief executive officer (CEO).
Former acting group CEO Imri Mokhtar resumes his role as chief operating officer to drive the business operations of unifi, TM ONE, TM GLOBAL and Information Technology & Network Technology.
Rosli said the TM board had approved Noor Kamarul’s appointment as the new group CEO after taking the view that he was most suited for the position.
“TM’s current strategy is not working. Therefore, someone who knows about the technical aspect of how TM works and can really turn around the company should take over the post.
“This is why the board agreed with the view that a new CEO needs to be appointed,” he told the New Straits Times .
“There was a few criteria that the group’s Nomination and Remuneration Committee had set in its selection process, and Noor Kamarul seems to tick all the boxes.
“There was evaluation of candidates and proper interviews.”
Rosli said a letter recommending Imri as the new group CEO was sent to the Minister of Finance Incorporated (MoF Inc) by the previous chairman and was done without his knowledge.
“The announcement that Imri will be appointed (group) CEO came when the recruitment process was being carried out.
“You have to understand that the process, which saw some candidates being shortlisted for the post, took time to complete. It was completed long after our last annual general meeting.”
MoF Inc has special rights on the appointment of the group CEO by virtue of its status as a special shareholder.
The appointment of Imri as group CEO was approved by MoF Inc in February, but there were reportedly instructions by the Prime Minister’s Office to defer the announcement.
Rosli was appointed chairman in December last year.
TM chief’s technical background sets him apart
TM has changed the status quo in nominating a candidate to helm the telecommunication giant.
After making a few appointments involving leaders with accounting and finance backgrounds in the past, TM took the road less travelled and picked a managing director (MD) and group chief executive officer (CEO) with a technical background who knows the products, industry and customers better than most.
Datuk Noor Kamarul Anuar Nuruddin, who has 34 years of experience in managing telecommunication networks and services in Malaysia and Indonesia, is TM’s new MD and group CEO, effective Thursday.
TM chairman Rosli Man said it was time the group looked outside the organisation but within the industry for a new chief executive.
“We need someone with technical and turnaround capabilities, as well as credible experience in the industry.
“The CEO must be able to understand the business,” he told the New Straits Times.
Rosli believed Noor Kamarul could deliver drastic change to the group in terms of financial performance.
Noor Kamarul has managed projects ranging from greenfield network, 3G, 4G to merger of cellular networks in the past.
He was involved in driving the turnaround of Celcom Axiata Bhd’s performance. Notably, Celcom Axiata achieved 31 quarters of consecutive growth from 2003 to March last year.
During Noor Kamarul’s time in Celcom, he was responsible for and part of the eventful merger of TM and Celcom 16 years ago.
In 2003, Celcom paid RM1.68 billion for the acquisition of TM Cellular, the mobile subsidiary of TM. The deal saw Celcom receive shares in TM Cellular, which would see its stake rising to 48 per cent, thus triggering a mandatory general offer at RM2.75 per Celcom share.
Back then, Noor Kamarul was Celcom’s chief technology officer responsible for the telco’s network strategic plan.
Rosli said Imri Mokhtar, who remains as TM’s chief operating officer, would get his chance to be CEO once he was ready.