Kenanga stays optimistic with telco sector following Jendela 1’s success

08 Jun 2023 - Free Malaysia Today

PETALING JAYA: Kenanga Investment Bank Bhd has maintained its positive outlook on the telecommunications industry, reaffirming its “overweight” recommendation on the sector.

The call was made following a recent briefing on the Jalinan Digital Negara (Jendela) plan by the Malaysian Communications and Multimedia Commission (MCMC).

According to analyst Ramzani Ramli, the recent briefing highlighted Jendela Phase 1’s achievements, surpassing its initial targets and setting the stage for an expedited deployment of the 5G network.

These developments also pave the way for the upcoming Jendela Phase 2 initiative, he said in a research note today.

“Most of the telcos surpassed their original targets in terms of upgrading, fiberisation and building new towers, but some missed their marks due to issues with local authorities,” he said.

Jendela was formulated to enhance broadband coverage and improve the overall quality of internet services for the people, while simultaneously preparing the country for the implementation of 5G technology.

Phase 1, which was completed in December 2022, aimed to expand 4G coverage to 96.9%, increase mobile broadband speed to 35Mbps, and provide gigabit-speed fixed broadband access to 83% of premises nationwide.

Phase 2 envisions the expansion of network coverage to the remaining 3% of the population which would include communities living in inland and remote areas.

“Jendela Phase 1 cost RM28 billion, of which 40% was borne by the government, while Phase 2 is expected to be launched by the end of 2023, but so far there has been no mention of how much the expenditure will be,” added Ramzani.

Ramzani remarked that the implementation of new 4G towers during Phase 1 also contributed to a decline in complaints, particularly from rural areas.

“The efforts made by MCMC have proven successful, resulting in a significant reduction of complaints by 63% by December 2022 compared to the highest recorded number of 8,616 complaints in January 2022,” Ramzani noted.

As of April, the 5G coverage of populated areas stood at 57.9%, and MCMC is confident that the percentage will reach 80% within the next six months.


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