1.0 INTRODUCTION

TM wishes to announce that the Company and its subsidiary, Packet One Networks (Malaysia) Sdn Bhd (“P1”) have today entered into the following agreements (“Definitive Agreements”):

i) Domestic Roaming Services and Facilities Agreement (“DR Agreement”) between TM, P1 and Celcom Axiata Berhad (“Celcom”); and

ii) Memorandum of Agreement for the next phase of infrastructure collaboration comprising TM Next-Gen Backhaul™ Services and TM’s High Speed Broadband (Access) between TM, Celcom, Celcom Mobile Sdn Bhd (“Celcom Mobile”) and Celcom Networks Sdn Bhd (“Celcom Networks”) (“Infrastructure Collaboration”),

(to be collectively known as “Collaboration”).

The Memorandum of Agreement comprise of the following agreements:

i) the Supplemental Agreement No. 5 to the High Speed Broadband (“HSBB”) Service Agreement between TM and Celcom Mobile;

ii) the Addendum No. 1 to the Specific Terms and Conditions for Wholesale Internet Access Services between TM and Celcom Networks;

iii) the Specific Terms and Conditions for Fiber Backhaul Connectivity Services between TM and Celcom Networks;

iv) The Supplemental Agreement No. 2 to the Wholesale Bandwidth Services Agreement between TM and Celcom.

TM and P1’s agreement with Celcom entails a strategic business cooperation that enables P1 to provide Domestic Roaming services as part of its plan to deliver seamless access for mobile network connectivity to its customers. At the same time, the Infrastructure Collaboration agreements with Celcom, Celcom Mobile and Celcom Networks will provide wholesale arrangement on fiber backhaul connectivity through its Next Generation Backhaul (“NGBH”) Services and High Speed Broadband (Access) (“HSBA”) for Celcom’s mobile access sites and fixed broadband coverage.

2.0 SALIENT POINTS OF THE DEFINITIVE AGREEEMENTS

The salient points of the Collaboration are as follows:-

2.1 Scope

a) Scope of the Domestic Roaming services

Celcom shall provide the following to TM or P1:

i) 2G and/or 3G Domestic Roaming services and Circuit Switch Fall Back (“CSFB”) voice and Enhanced Single Radio Voice Call Continuity (“eSRVCC”) to support seamless voice service handover from P1 Long Term Evolution (“LTE”) to Celcom 2G and/or 3G or any similar technology whenever it’s made available by P1 to Celcom and accepted by Celcom (hereinafter referred to as “the Domestic Roaming Arrangement”);

ii) The 2G and/or 3G Domestic Roaming services to be provided under the Domestic Roaming Arrangement shall be Voice, Short Messaging Service (“SMS”), Multimedia Messaging Service (“MMS”), Data and International Direct Dialling (“IDD”), if any.

b) Scope of the Infrastructure Collaboration

The Infrastructure Collaboration will extend Celcom’s nationwide coverage and network capabilities beyond its current capacity with its progressive roll-out of its LTE network. The collaboration will elevate the existing partnership between TM and Celcom for TM Next-Gen Backhaul™ services to another level as it extends the additional provision of Celcom’s LTE sites and access to HSBB’s network.

2.2 Duration

a) Term of the Domestic Roaming services

The proposed Domestic Roaming agreement is for a minimum period of five (5) years with an automatic renewal for a further period of five (5) years.

b) Term of the Infrastructure Collaboration

The period for the Infrastructure Collaboration ranges from one (1) year to ten (10) years based on the services provided.

3.0 RATIONALE FOR THE COLLABORATION

In the spirit of supporting the Government’s aspiration in fostering partnerships amongst industry players, TM is partnering with Celcom to leverage on existing infrastructure in order to enhance and develop the end user experience for all parties.

The Domestic Roaming arrangement will enable P1 to access Celcom’s mobile network coverage nationwide. In return, Celcom will have access to enhanced network facilities and infrastructure provided by TM.

4.0 BRIEF INFORMATION ON PARTIES

4.1 TM

TM, a public listed company duly incorporated in Malaysia on 12 October 1984, has an authorised share capital of RM3,528,003,015.00 divided into 5,040,000,020 ordinary shares of RM0.70 each, 1 Special Rights Redeemable Preference Share of RM1.00, 2,000 Class C Non-Convertible Redeemable Preference Shares (“NCRPS”) of RM1.00 each, 1,000 Class D NCRPS of RM1.00 each. The issued and paid up share capital of the Company is RM2,630,555,302.10 divided into 3,757,934,823 ordinary shares of RM0.70 each, 1 Special Rights Redeemable Preference Share of RM1.00 and 925 Class D NCRPS of RM1.00 each. The principal activity of TM is the establishment, maintenance and provision of telecommunication and related services.

4.2 P1

P1 was incorporated in Malaysia under the Companies Act, 1965 (“CA”) on 11 February 2002 as a private limited company under the name of MIB Comm Sdn Bhd and subsequently assumed its present name on 24 January 2007. The authorised share capital of P1 is RM100,000,000.00 divided into 100,000,000 ordinary shares of RM1.00 each. Its issued and paid-up capital stands at RM16,697,425.00 held by Mobikom Sdn Bhd (55.3%), a wholly-owned subsidiary of TM, Packet One Sdn Bhd, a wholly-owned subsidiary of Green Packet Berhad (31.1%) and SK Telecom Co. Ltd. (13.6%). It is principally involved in the provision of last mile broadband network infrastructure facilities and services in Malaysia.

4.2 Celcom

Celcom was incorporated in Malaysia on 5 January 1988. The issued and paid-up share capital of Celcom stands at RM1,237,534,681.00 comprising 1,237,534,681 ordinary shares of RM1.00 each. Celcom was the first privately owned company in Malaysia to offer mobile services when it launched its “Art 900” analogue mobile system in 1989. In 1995, Celcom was one of the first operators in Malaysia to provide digital services through its GSM 900 network. Celcom currently operates 2G, 3G and 4G LTE and provides mobile telecommunication services in Malaysia under the brand name “Celcom”.

4.3 Celcom Mobile

Celcom Mobile was incorporated in Malaysia on 15 July 1976. The issued and paid-up share capital of Celcom Mobile stands at RM313,000,000.00 comprising 313,000,000 ordinary shares of RM1.00 each. The principal activities of Celcom Mobile are the provision of mobile communications, network and application services and content.

4.4 Celcom Network

Celcom Networks was incorporated in Malaysia on 30 March 1990. The issued and paid-up share capital of Celcom Networks stands at RM535,000,000.00 comprising 535,000,000 ordinary shares of RM1.00 each. Celcom Networks is principally involved in the provision of network telecommunications, capacity and related services.

5.0 FINANCIAL EFFECT

5.1 Share Capital

The Collaboration would not have any effect on the issued and paid-up share capital of TM.

5.2 Earnings and Net Assets

The Collaboration is not expected to have any material effect to the earnings and net assets of the TM Group for the financial year ending 31 December 2016. However, the Collaboration is expected to contribute positively to the future earnings of TM Group.

6.0 APPROVALS REQUIRED

The Collaboration is not subject to shareholders or any government authorities’ approval. TM will procure its shareholders’ approval at the next annual general meeting for recurrent related party transactions under the Definitive Agreements pursuant to paragraph 10.09 (2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

7.0 DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS’ INTEREST

Save as disclosed below, none of the Directors and other major shareholders of TM and/or persons connected to them has any interest, whether direct or indirect, in the Collaboration:-

i) Khazanah Nasional Berhad (“Khazanah”), a common major shareholder of both TM and Axiata Group Berhad (“Axiata”). Celcom, Celcom Mobile and Celcom Networks are wholly-owned subsidiaries of Axiata.

ii) Minister of Finance Incorporated (“MOF Inc”), the holding company of Khazanah.

iii) YM Tunku Dato’ Mahmood Fawzy Tunku Muhiyiddin, a nominee Director of Khazanah.

iv) Encik Nik Rizal Kamil Tan Sri Dato’ Nik Ibrahim Kamil, alternate director to Tunku Dato’ Mahmood Fawzy Tunku Muhiyiddin.

v) YBhg Dato’ Dr Mohmad Isa Hussain, a nominee director of MOF Inc.

vi) Encik Asri Hamidin @ Hamidon, alternate director to Dato’ Dr Mohmad Isa Hussain.

8.0 AUDIT COMMITTEE STATEMENT

The Board Audit Committee (“BAC”) of TM, (save for Tunku Dato’ Mahmood Fawzy Tunku Muhiyiddin, an Interested Director by virtue of his position as a nominee Director of Khazanah, a common major shareholder of TM and Axiata), having considered all aspects of the proposed Collaboration is of the view that the proposed Collaboration is in the best interest of TM, fair and reasonable and on normal commercial terms, and is not detrimental to the interest of the minority shareholders of TM.

The above view is arrived at after having considered that the proposed Collaboration will derive greater value for the whole of TM Group and will enable TM to execute its convergence strategies.

9.0 STATEMENT BY THE BOARD OF DIRECTORS

The Board of Directors of TM save for Interested Directors, namely Tunku Dato’ Mahmood Fawzy Tunku Muhiyiddin and his alternate, Nik Rizal Kamil Tan Sri Dato’ Nik Ibrahim Kamil, Dato’ Dr Mohmad Isa Hussain and his alternate, Asri Hamidin @ Hamidon, having considered the recommendations of the BAC and the rationale of the proposed Collaboration, is of the view that the proposed Collaboration is in the best interest of TM Group.

10.0 TRANSACTION WITH THE SAME RELATED PARTY FOR THE PRECEDING 12 MONTHS

Save for the proposed Collaboration and recurrent related party transactions of revenue and trading nature, there were no other transactions entered into between the Company with the same related party for the 12 months preceding the date of this announcement.

This announcement is dated 28th January 2016.