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Execution of Agreement On High Speed Broadband Project In Malaysia Between The Government Of Malaysia And TM

16 September 2008

Type Announcement
Subject TELEKOM MALAYSIA BERHAD (“TM” OR THE “COMPANY”)
• Execution of Agreement on High Speed Broadband Project in Malaysia between the Government of Malaysia and TM
Contents We refer to our announcements dated 15 May 2008 [Ref No: TM-080515-63438] and 2 September 2008 [Ref No: TM-080902-62305] in respect of the High Speed Broadband Project.
1.0 Introduction
    • TM is pleased to announce that it has today, signed the Agreement on the High Speed Broadband (“HSBB”) Project (the “HSBB Agreement”) in Malaysia with the Government of Malaysia (the “Government”).
2.0 Details of the Transaction

2.1 TM, had on 2 September 2008, accepted the Letter of Award (“LoA”) from the Government for the implementation of the HSBB Project in collaboration with the Government to deploy the access, domestic core and international networks to deliver an end-to-end HSBB infrastructure.

2.2 The infrastructure will be rolled out over a period of ten (10) years with the Government investing RM2.4 billion and TM RM8.9 billion to provide high-speed broadband access to over 1.3 million premises by 2012.

2.3 Under the HSBB Agreement: -

i. Phase 1 of the project will cover the Inner Klang Valley, all key economic and industrial zones throughout the country, the Iskandar Malaysia Region, all Public Institutions of Higher Education (Institut Pengajian Tinggi Awam or IPTAs) throughout the nation and all Private Institutions of Higher Education (Institut Pengajian Tinggi Swasta or IPTS) within the rollout areas.

ii. TM will roll-out last mile access network to homes and businesses to facilitate HSBB services using three (3) main technologies, i.e. fibre-to-the home (“FTTH”), Ethernet-to-the-home (“ETTH”) and Very High Speed Digital Subscriber Line 2 (“VDSL2”). In addition, TM will be rolling out its Next-Generation Network (“NGN”) core backbone network based on an all IP Platform as well as grow the nation’s global capacities by building new international gateways for enhanced connectivity and network efficiency.

iii. TM is to provide fair and equitable access to the HSBB Network by offering High Speed Broadband Access Services, HSBB Transmission Services and/or HSBB Connection Services to access seekers. 3.0 Rationale for the Transaction
    • The HSBB Project is a key initiative in the effort to widen broadband penetration in the country and the HSBB will benefit the industry and the country as a whole. With speeds up to 1000 Mbps for both businesses and homes, TM believes that it will be able to provide world-class infrastructure for applications and content development in Malaysia.
4.0 Financial Effects of the Transaction

4.1 Issued and Paid-Up Share capital
    • The HSBB Agreement will not have any effect on the issued and paid-up share capital of TM.

4.2 Earnings, Net Assets and Gearing
    • The HSBB Project is not expected to have any material impact on the earnings, net assets and gearing of TM Group for the financial year ending 31 December 2008.
4.3 Substantial Shareholders’ Shareholdings
    • The HSBB Agreement will not have any effect on the shareholding of TM’s substantial shareholders.

5.0 Approvals Required
    • The execution of the HSBB Agreement has been duly approved by the Board of Directors of TM and is not subject to any other approvals.

6.0 Directors' and Major Shareholders' Interest

    • None of the Directors or major shareholders or persons connected to them has any direct or indirect interest in the HSBB Agreement.

7.0 Statement by Directors

    • The Board of Directors of TM, having considered all aspects of the HSBB Project, is of the opinion that the terms of the HSBB Agreement are fair and reasonable and are in the best interest of TM.

This announcement is dated 16 September 2008.

Announcement Info

Company Name TELEKOM MALAYSIA BERHAD
Stock Name TM
Date Announced 16 Sept 2008
Category General Announcement
Reference No TM-080916-AB2CA