News    TM announced that its IPTV service, HyppTV (powered by TM’s HSBB service), will be made available nationwide via Streamyx as well as on multi-screen devices effective 1 August 2013.

TM will be making its HyppTV service available to its new and existing 4Mbps and 8Mbps Streamyx broadband customers, thus expanding the reach of the IPTV service to a greater number of viewers nationwide. Its HyppTV Everywhere, the first ever multi-screen offering will enable its Unifi and Streamyx (4Mbps & 8Mbps) customers to watch HyppTV anywhere anytime on various devices. 

For existing and new Streamyx 8Mbps customers, HyppTV will be offered as part of its triple-play service of Voice, Internet and IPTV packaged at RM160 a month with 17 free channels and an option to subscribe to HyppTV's Platinum Pack. For existing and new Streamyx 4Mbps customers, HyppTV is offered as an add-on for RM30 a month from the existing two-play service of Voice and Internet, or at the package price of RM140 a month.

To enjoy HyppTV on their multiple screens, new and existing HyppTV customers need only to pay RM5 per month for two (2) devices or RM10 per month for five (5) devices.

To date, HyppTV is Malaysia's fastest growing IPTV service, offering its customers 109 channels with 27 channels in High Definition (HD) - comprising 25 free-toair channels, including 8 radio channels, 48 premium channels, 16 Video-On-Demand (VOD) genres and 20 interactive channels.

Comments    We are positive on TM’s HyppTV latest offers as this could further widen and strengthen its IPTV services and maintain its leading position as a triple-play service provider.    

We understand that TM activated 1.58m Streamyx subscribers in 1QFY13, of which 1.92m users were SME users while the balance were from the residential segment.  For the packages segmentation, we estimated that there are about 5% of Streamyx users who are currently the higher-end subscribers.    

Meanwhile, the group recorded RM82 (+RM1 QoQ) ARPU under the Streamyx segment as of 1Q13.  Thus, with the current latest HyppTV services coupled with the new mobility features with HyppTV Everywhere, there are rooms for potential ARPU uplift. 

Outlook    TM’s outlook remains solid despite escalating competition in its home broadband segment. 

Forecast   No changes in our FY13-FY14 earnings forecasts. 

Rating   Maintain OUTPERFORM

Valuation    Maintaining our Target Price at RM5.91 based on a targeted FY14 EV/forward EBITDA of 6.7x (+0.5 SD).

Risks    Regulation risk and persisting margin pressure.

Source: Kenanga