KUALA LUMPUR: Telekom Malaysia Bhd (TM) plans to sell more buildings and landbanks to unlock the value of its assets after putting two buildings up for sale recently.

Last month, a tender bid was called for two buildings (Annexe 1 and Annexe 2) at its headquarters and the reserve price range is said to be between RM273mil and RM312mil.

TM has various plots of land and buildings around the country, including in Hong Kong. The net book value of all its buildings and land as per its 2017 annual report is estimated at RM2.9bil. Part of the land belongs to the Federal Government.

“We are looking at various options to unlock the value of the buildings and land as we optimise our network. We have been doing this over the past few years,’’ TM acting group chief executive officer/chief operating office Imri Mokhtar said.

But TM will not sell until it gets “good value for its assets.’’

“The proceeds from the sale will be used to fund our business and for our working capital,’’ he said.

Imri was appointed acting CEO in November. Previously, he was head of Unifi for over four years.

Since taking on the new job, he has come up with a new three-year business plan (2019-2021) to chart a new direction for the telco.

He believes TM needs to be transformed into a more agile organisation in order to capitalise on opportunities. This is necessary with the changing demands of consumers in a converged and digital space.

“There are a lot of things we can improve on, and a lot of areas we can be better in,’’ he said.

Last year was a tough year for TM. It saw the departure of two CEOs and a chairman. Wholesale access pricing was reduced, broadband packages revised lower and competition intensified.

That will have an impact on TM’s earnings and one criticism is that it has been complacent for far too long.

Its share price suffered and the stock was dropped off the 30-stock benchmark FBM KLCI index.

Imri believes his new plan will create a “new TM’’ that will emerge stronger and able to withstand competition better.

“The transformation reinforces customer centricity. It is timely and much needed. It will be anchored on the customer. We have to recognise that the customer is our number one priority and we need to work on that,’’ he said in a media briefing recently.

There are six pillars to his new plan and they include expansion of infrastructure, bringing to market more simple products and processes, sweating the assets further, optimising cost and efficiencies, and changing the mind-set of the employees to focus on the customer.

“The big game changer will be people development. This is the fuel of our new TM plan. We need to remain relevant and be in sync with consumer demand,’’ he adds.

Imri believes there are plenty of opportunities in the broadband and enterprise market space. It is about tailoring its products to suit customer’s needs.

Unifi is TM’s flagship product and it serves 2.5 million homes currently. It is working to migrate more TMStreamyx users to Unifi. It is also working towards addressing copper wire connections. It wants to work with other mobile players to expand its mobile offering.

“We are open to partnering other players to reduce infrastructure duplication,’’ he adds.

TM plans to spend 18% to 20% of its revenue on capital expenditure to enhance connectivity and digital infrastructure.

He hopes this year would be better financially, though his guidance is “low to single digit decline in revenue, but EBIT to be higher than last year.’’

TM posted a 83.5% decline in net profit to RM153.1mil for full year 2018. This was due to a RM982.5mil provision made for the impairment of fixed and wireless network assets. Revenue was at RM11.8bil.

Analysts do expect more provisioning this year for its telco assets. For 2019, revenue is expected at RM11.4bil and net income at RM604mil as per Bloomberg consensus estimates. A total of 15 research houses have a “hold’’ call on the stock, three a “buy” and nine a “sell,’’ with a target price RM2.88 a share. The stock closed at RM3.18 on Friday.

Public Investment Bank believes that TM retail segment would be affected by a more substantial decline in average revenue per user (ARPU).

“We assume a 15% decline in Unifi ARPU to RM163 in FY19F, compared with only a 4% drop in FY18. Overall, we estimate FY19F revenue to fall by 7% mainly due to lower data and Internet revenue.’’