Kenanga Research said the outlook for Telekom Malaysia (TM) remains promising as data/internet becomes a lifestyle.

Kenanga Research in its research note, said the TM management is optimistic of signing up a major telco player for High Speed Broadband (HSBB) access in September, bumping up utilisation.

'Current ongoing discussions with various parties could lead to more wholesale agreement to come,' the research house added.

While profitability pressure for TM should remain slightly elevated in the near term, Kenanga Research said its medium term positive on the stock remains intact.

This is premising on TM's superior infrastructure to cater to the intensifying demand for data as well being as an indirect beneficiary of the booming mobile data growth with its backhaul capability.

For the first half of 2010, it is business as usual for TM with capex at merely RM336 million, a far cry from the budgeted RM1.3 billion.

'The HSBB gross capex of RM437 million is expected to trend higher in the second half of 2010, reaching RM2 billion as per budgeted,' Kenanga Research said.

Half or 50 per cent of the HSBB capex, according to Kenanga Research will be funded by government. - Bernama