We refer to our announcements dated 25 February 2015 [Ref No: TM-150225-52543].

1.0 Introduction

TM is pleased to announce that it has today, signed the Agreement on the High Speed Broadband 2 (“HSBB2”) Project (the “HSBB2 Agreement”) and Sub Urban Broadband (“SUBB”) Project (the “SUBB Agreement”) in Malaysia with the Government of Malaysia (the “Government”).

2.0 Details of the Transaction

2.1 High Speed Broadband 2 (“HSBB2”) Project

2.1.1. TM, had on 25 February 2015, announced that it has accepted the Letter of Award (“LoA”) from the Government for the implementation of the HSBB2 Project in collaboration with the Government to deploy the access and domestic core networks to deliver an end-to-end HSBB infrastructure.

2.1.2 The infrastructure will be rolled out over a period of ten (10) years with the Government investing RM500 million and TM RM1.3 billion to provide high-speed broadband access to over 390,000 premises by 2017.

2.1.3 Under the HSBB2 Agreement:-

i. Phase 2 of the project will cover other priority economic areas including the state capitals and selected major towns, including passing Public Universities, Institutions of Higher Education (Institut Pengajian Tinggi Awam or IPTAs) , Private Institutions of Higher Education (Institut Pengajian Tinggi Swasta or IPTS), Matriculation Colleges and other Government Colleges 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”).

iii. TM is to provide fair and equitable access to the HSBB network by offering HSBB Access Services, HSBB Transmission Services and/or HSBB Connection Services to access seekers.

2.2 Sub Urban Broadband (“SUBB”) Project

2.2.1 TM, had also on 25 February 2015, announced that it has accepted the LoAfrom the Government for the implementation of the SUBB Project in collaboration with the Government to deploy the access and domestic core networks to deliver an end-to-end SUBB infrastructure.

2.2.2 The infrastructure will be rolled out over a period of ten (10) years with the Government investing RM600 million and TM RM1.0 billion to provide high-speed broadband access to over 420,000 premises by 2019.

2.2.3 Under the SUBB Agreement:-

i. The project will cover sub urban and rural areas, including passing Public Universities, Institutions of Higher Education (Institut Pengajian Tinggi Awam or IPTAs), Private Institutions of Higher Education (Institut Pengajian Tinggi Swasta or IPTS), Matriculation Colleges and other Government Colleges 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. VDSL2, FTTHand ETTH.

3.0Rationale for the Transaction

The HSBB2 and SUBB Projects are key initiatives in the effort to widen broadband penetration in the country and the HSBB2 and SUBB will benefit the industry and the country as a whole. TM believes that it will be able to provide world-class infra-structure for applications and content development in Malaysia with speed of up to 100 Mbps for both homes and businesses.

4.0 Financial Effects of the Transaction

4.1 Issued and Paid-Up Share capital

The HSBB2 and SUBB Agreements will not have any effect on the issued and paid-up share capital of TM.

4.2 Earnings, Net Assets and Gearing

The HSBB2 and SUBB Projects are not expected to have any material impact on the earnings, net assets and gearing of TM Group for the financial year ending 31 December 2015.

4.3 Substantial Shareholders’ Shareholdings

The HSBB2 and SUBB Agreements will not have any effect on the shareholding of TM’s substantial shareholders.

5.0 Approvals Required

The execution of the HSBB2 and SUBB Agreements have 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 HSBB2 and SUBB Agreements.

This announcement is dated 17December 2015.