KUALA LUMPUR (Dec 29): Telekom Malaysia Bhd (TM) has clarified that the telecommunications giant's decision to exit the Kuala Lumpur Tower (KL Tower) concession was part of a business transformation programme to focus its efforts and resources on strengthening its core business of telecommunications and technology.

In a statement filed with Bursa Malaysia on Thursday (Dec 29), TM clarified that KL Tower is owned by the government, while the operations and maintenance of the tower are granted under a concession.

It was reported on Tuesday (Dec 27) that the Ministry of Communications and Digital was examining the acquisition of the ownership of the management of KL Tower from TM through its wholly owned subsidiary Menara Kuala Lumpur Sdn Bhd (MKLSB) by Hydroshoppe Sdn Bhd.

Communications and Digital Minister Fahmi Fadzil said he would receive a comprehensive briefing on this matter from TM on Jan 3, after receiving a detailed briefing on the KL Tower management concession from the Ministry of Communications and Digital on Dec 14.

TM via MKLSB had undertaken the concession since 1996, the utility said.

TM said that in October 2021 it decided to not renew the KL Tower concession after taking into consideration the change in the business nature of KL Tower — from telecommunications services to tourism and hospitality.

"Subsequently in 2022, the selection process of the new concessionaire was then taken up by the government upon which TM was informed on the appointed company to take over the shares of MKLSB and the KL Tower concession.

"MKLSB shall continue to operate the concession and ensure the continuity of KL Tower operations for the Malaysian public, including international visitors," TM said, adding that employees will remain employed with MKLSB under the new concessionaire for a minimum period of three years.

According to TM's filing for its third quarter ended Sept 30, 2022, the company completed a share purchase agreement in end-October 2022 to dispose of its 100% interest in MKLSB for a consideration of RM3.8 million.

Shares in TM slipped 10 sen or 1.85% to RM5.30, giving the company a market capitalisation of RM20.25 billion.