Essay About Telekom Malaysia Berhad And Public Telephone Services

Business Case Study
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Exploring Business Growth through
Scenario Planning at Telekom Malaysia Berhad ( * )
1. Telekom Malaysia Berhad: an introduction
Telekom Malaysia (TM) Berhad establishes, maintains and provides telecommunication and related
services under a license issued by the Ministry of Energy, Telecommunications and Posts of
Malaysia. Other business activities include printing and publications, consultancy and engineering
services, public telephone services, provision of mobile telecommunication services, investment
holding and other services relating to telecommunications.
Telekom Malaysia Berhad looks large, not only in the specific context of the Malaysian
telecommunications industry, but also in ordinary life. Since it opened in October 1996, the Menara
Kuala Lumpur 421 meters tower, it provided Malaysia a national landmark that places the country
as a qualified site in the world map in terms of tourism, telecommunications, and development.
Menara is the highest telecommunications tower in Southeast Asia and the 4th in the world. As a
source of pride for every Malaysian, it has become a “must-see” destination for every tourist with
The case should be used as a basis for class discussion rather than to illustrate “solutions” to problems.
its observation deck and revolving restaurant at 282 meters above the ground. Undoubtedly, it was
the singular showpiece that symbolized the nations claim to leadership in the telecommunications
industry in the region. TM claimed a large stake in this national pride.
Aside from towering over the nations collective cultural psyche, TM has also been playing a
crucial role in the Malaysian economy. In a relatively small nation of a little more than 20 million
people, it is a big employer with more than 25,000 personnel. It has the largest capitalization on the
Kuala Lumpur Stock Exchange.
Like all giants, TM had its infancy. It was no more than a single 43 kilometre copper line traversing
the dense jungles of Perak that connected the British Residents office in Kuala Kangsar to his
assistant in Taiping. Several years after, it included the first submarine cable that connected
Province Wellesley with Penang. Through a merger between the Telecommunications Department
of Peninsular Malaysia and the Posts and Telecommunications Department of Sabah and Sarawak,
Jabatan Telekom Malaysia was born. Then it was privatized in 1987 as Syarikat Telekom Malaysia
Bhd and was subsequently given a 20-year operating license. Finally, in 1991, Telekom became a
listed company bearing its current name 1.
2. Telecommunications in Malaysia
The telecommunications component of Malaysias IT sector has been changing rapidly in recent
years. This is part of the restructuring and liberalizing processes that are underway in nearly all
regions and all countries of the world. TM, the countrys telephone system operator has begun the
liberalization process by going from government-owned status to commercial status.
Corporatisation started the process in 1987 and privatisation occurred in 1990; this has added new
accountabilities. “Telekom Malaysias company goal is to complete the network digitalisation
process by the end of the decade and take it to the final step of providing services not unequal to
those in developed countries by the year 2005. These ambitious goals inspired by Vision 2020 are
necessary to maintain the companys role and position as an industry leader. They are also key to
ensuring corporate growth beyond this decade” 2.
Malaysia has a target of attaining 30 telephones per 100 population; this includes rural areas. In
order to meet such a goal, it is estimated that it will take a doubling of the countrys gross domestic
product per capita from $3,000 to $6,000.
1 Asian Institute of Management – Eugenio Lуpez Foundation, Telekom Training Colleges Strategic Direction: Wean to
Wwin: a Learning case
2 Telekom Malaysia 1993: 1992 Annual Report, Telekom Malaysia Berhad, Kuala Lumpur.
г 2001 CUSA – System Dynamics Group – Web address:
Malaysias basic telephone infrastructure is already very good, with telephone penetration rates of
25 per hundred in urban areas and an overall average penetration rate of 15 per hundred for the
entire country.
TM also has an extensive leased line service offering both analog and digital leased lines. Analog
lines officially support data rates of up to 14.4 Kbps, but these circuits are commonly used at 32
Kbps. By the end of 1995, the customer base for analog leased lines had risen to 37,476. Two forms
of digital leased lines are also available.
Digitaline, which is unmanaged, and Digitaline II which is managed. In both cases, the digital
leased circuits provide transmission speeds from 64 Kbps to 2 Mbps. As of