ASTRO announced that the group is collaborating with Telekom Malaysia to provide broadband and content services across the country. With this collaboration, ASTRO has the means to bundle its very own broadband plans with their existing products as well as markets standalone broadband to non-Astro subscribers. BUY with a TP of RM1.22 based on FY23 PER of 10.2x. We believe this new partnership is a positive step taken by the group, tapping into a new market where we see it having the potential to grow and has a competitive advantage over other ISPs as they can bundle their internet plans with vernacular and non vernacular contents.

Astro and Telekom Malaysia announced that they will be entering into a partnership deal to deliver high-quality digital experience to all Malaysians via content bundles and broadband services which will be launched in either late CY22 or early CY23. We are positive on this collaboration as we see ASTRO benefiting from…

At present, ASTRO maintains collaborations with Maxis and Allo to provide bundled products of ASTRO’s Pay TV subscriptions with their partners providing internet access. The new partnership with TM positions ASTRO to purchase wholesale internet access from TM to be repackaged with ASTRO’s existing product portfolio. This facilitates ASTRO’s ambition to be an Internet Service Provider (ISP) with the ability to come up with their very own broadband plans and manage its pricing more effectively. Additionally, tapping into TM’s large nationwide broadband footprint could also allow ASTRO to market more effectively in previously untapped regions whilst still providing quality service.

With this collaboration we believe ASTRO stands a good chance in securing more broadband subscribers as Astro has a high household penetration rate of 73% as at 1HFY22. Even if they were to not increase its TV subscription pool, ASTRO could still supplement its broadband products with its freemium offerings to access more households, enterprise customers, hotels, etc.

Source: Rakuten Research - 30 Sept 2021