1Q 2011 RESULTS

BRIEFING TO ANALYST

25 May 2011

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Disclaimer

Performance Overview

Financial review

Operating highlights

Concluding remarks

3

Key Highlights 1Q 2011

4

Broadband leadership:Streamyx customer base grew 15.0% YoY

Strong Unifi takeup

EBITDA improved 1.5% YoY

Revenue improved by 1.1% YoY on the back of Data & Internet growth

Capex/Revenue ratio improved from 13.9% to 9.7%

Key Operating Indicators

Financial Highlights 1Q 2011

Financial Performance

Improved YoY performance

1Q11 vs1Q10

5

Operating revenue increased by 1.1% YoY to RM2,148.2mn in 1Q11 from higher contribution from data services, internet & multimedia

EBITDA for 1Q11 up 1.5% YoY to RM730.9mn, Normalised EBITDA up 0.4% YoY

Normalised PATAMI up 40.3% YoY from RM87.2mn in 1Q10 to RM122.3mn

High growth of internet revenue at +12.7% YoY

Continuous growth in broadband with Streamyx customers up by 15.0% YoY

Strong expansion of WiFi Hotspots Zones to 13,251 sites, up 490.2% YoY

Unifi takeup increased 93.2% QoQ, from 32,896 customers to 63,541 customers

n/a

0.1

3.6

4.7

1Q11

14.8%

10.7%

5.7%

1.11.21.4

Cash Balance (RM bn) 2.1 3.5 3.5

ROIC

2008

Capital Expenditure, excluding HSBB(RM bn)

Our capital management approach is guided by two major principles :

Striving to optimize capital productivity and ROIC

Creating shareholder value with strong commitment to dividend policy

1 TRS: Source Bloomberg2 Normalised EBIT / Total Revenue

16.7 14.1

2009 2010

12.8

Focus on Shareholder Value CreationGrowing enterprise value through improving return on capital

1Total Return to Shareholder (TRS)

7.7% 42.9% 24.0%

EBIT Margin 10.8%10.9% 10.6%2

5.9% 5.8% 6.0%

Capex / Revenue ratio( %)

6

Performance Overview

Financial review

Operating highlights

Concluding remarks

7

Note: EBITDA Margin is calculated as percentage of EBITDA against Revenue + Other Operating Income* Excludes FX (Gain )/Loss

RMmn

ReportedComments

(QoQ)1Q11 4Q10

% Change QoQ

1Q10% Change

YoY

Revenue 2,148.2 2,320.6 -7.4 2,124.9 +1.1Lower due to lower data services, voice, SchoolNet and Yellow Pages revenue

Other Operating Income

21.3 52.7 -59.6 30.9 -31.1Lower due to lower sale of scrap and insurance claims

EBITDA 730.9 758.6 -3.7 720.0 +1.5Lower due to lower revenue and other operating income

EBITDA margin 33.7% 32.0% +1.7pp 33.4% +0.3pp -

Normalised EBITDA 729.0 795.9 -8.4 726.2 +0.4 -

Normalised EBITDA Margin

33.6% 33.5% +0.1pp 33.7% -0.1pp -

Depn & Amort. 500.0 565.7 -11.6 456.8 +9.5Lower due to 4Q2010 included RM66mn provision for write-off

Net Finance Cost* 42.7 57.9 -26.3 72.3 -40.9Lower due to repayment of Global Bond 2010 in Dec 2010

FX (Gain) / Loss (38.4) 15.8 +343.0 (157.5) -75.6RM strengthened by 1.3% [USD1:RM3.06 at Dec 2010; USD 1: RM3.02 at 31 March 2011]

Profit Before Tax 227.3 334.8 -32.1 352.6 -35.5

4Q2010 included gain on disposal of Axiata shares of RM213.1mn, provision for PPE write off of RM66mn

PATAMI 163.3 400.7 -59.2 242.9 -32.8 -

Normalised PATAMI 122.3 238.4 -48.7 87.2 +40.34Q2010 included RM57.2mn deferred tax income

Group Results 1Q11

8

In RM mn 1Q10 4Q10 1Q11

Reported EBITDA 720.0 758.6 730.9

Non Operational

ESOS (Income) / Cost - net 11.9 - -

FX (Gain)/Loss on International trade settlement

(5.7) 20.9 (2.3)

Impairment of AFS (available for sale)receivables

- 15.4 -

(Gain)/Loss on sale of staff housing loans - 1.0 0.4

Normalised EBITDA 726.2 795.9 729.0

Normalised EBITDA Margin 33.7% 33.5% 33.6%

Reported EBITDA Margin 33.4% 32.0% 33.7%

Normalised EBITDA

EBITDA is calculated as Total Revenue (Operating Revenue + Oth. Operating Income) less Operating Cost (Exc. Depreciation, Amortisation & Impairment).EBITDA Margin is calculated as percentage of EBITDA against Total Revenue

9

In RM mn 1Q10 4Q10 1Q11

Reported PATAMI 242.9 400.7 163.3

Non Operational

ESOS (Income) / Cost - net 11.9 - -

FX (Gain)/Loss on International trade settlement

(5.7) 20.9 (2.3)

Impairment of AFS (available for sale) receivables - 15.4 -

(Gain)/Loss on sale of staff housing loans - 1.0 0.4

Other (Gain)/Loss – net* (4.4) (215.4) (0.7)

Unrealised FX (Gain)/Loss on Long Term loans (157.5) 15.8 (38.4)

Normalised PATAMI 87.2 238.4 122.3

Normalised PATAMI

* Comprise fair value (FV) changes of FVTPL (FV through P&L) investment and gain/loss on disposal for AFS (available for sale) investments. 4Q10 included gain on disposal of AXIATA shares.

10

Revenue = Operating Revenue + Other Operating Income

Cost % of Revenue1

Note: The classification of cost is as per financial reporting

(Please refer to Appendix for quarterly details & breakdown)

Improvement in Cost/revenue ratios will continue to be emphasized

1

11

RM mnRM mn

Total Cost / Revenue ( %)

RM2,180.4

91.9%

RM1,938.6

89.4%87.8%

RM1,892.6Year on Year:

• Higher Depreciation &Amortisation mainly due to newasset additions

• Lower Direct Cost mainly due tolower interconnect andinternational outpayment

• Higher Manpower cost mainlydue to new collectiveagreement, higher salescommissions

• Higher Other Operating Costmainly due to higherprofessional charges & fees andprovision for stock writeoff

21.2 23.8 23.0

21.3 19.4 18.6

19.1 20.9 20.8

10.410.6 11.2

5.15.1 4.7

5.27.4

5.04.1

3.74.31.6

0.91.7

1Q10 4Q10 1Q11

Bad Debt

Marketing Expenses

Supplies & material

Maintenance Cost

Other operating cost

Manpower cost

Direct cost

Dep & Amortisation

119

466

14363

470

49113

338

17

0

200

400

600

800

1000

1200

1400

1Q10 4Q10 1Q11

Access Core Network Support System*

Group Capital Expenditure

** Gross capex to be shared with Government equallyNote: Government grant treated as deferred income, to be amortised progressively to match against the depreciation of assets

*Include Application, Support System &Others (building, land improvement, moveable plants,application & other assets)

Improved Capex/Revenue ratio

12

64

23386

25

302

2282

192

0

100

200

300

400

500

600

700

800

1Q10 4Q10 1Q11

Access Core Network Support System*

55

233

5738

168

2731

146

17

0

100

200

300

400

500

600

1Q10 4Q10 1Q11

Access Core Network Support System*

Total Capex

HSBB Capex**

Note : BAU – Business As Usual

RM mn

295

1,274

171

72713.9

54.9

BAU Capex

124

547

5.8

23.6

Capex / Revenue ( %)

209

101

108

4.7

9.7

31 Dec 2010 31 Dec 10 31 Dec 10 31 Dec 10Return on Invested Capital 5.70% 6.03% Gross Debt to EBITDA 1.88 2.09

Return on Equity 6.26% 7.67% Gross Debt/ Equity 0.69 0.72

Return on Assets 4.40% 4.73% Net Debt/ Equity 0.24 0.27

Current Ratio 1.88 1.62 Net Assets/Share (sen) 221.1 216.1

2

31 March 11

2 Based on Normalised PATAMI, comparative for Dec’10 is amended to be consistent with current year computation

31 March 11

Group Cash Flow & Key Financial Ratios

31 Dec 10 31 Dec 10

RM mn 1Q11 1Q10

Cash & cash equivalent at start 3,488.0 3,490.2

Cashflows from operating activities 445.9 577.0

Cashflows from / (used-in) investing activities (412.2) (182.2)

Capex* 209.0 87.4

Cashflows from financing activities 23.5 7.5

Effect of exchange rate changes 0.1 2.6

Cash & cash equivalent at end 3,555.3 3,895.1

Free cash-flow (EBITDA – Capex) 521.9 632.6

•net of HSBB grant received from Government ( 1Q11 – 0, 1Q10 - RM207.6mn)

Strong Cash Balance to support futurebusiness requirements

1

Based on Normalised EBIT1

1

13

Performance Overview

Financial review

Operating highlights

Concluding remarks

14

Group Total Revenue by Product

15

Voice43%

Data20%

Internet21%

Others16%

Voice44%

Data19%

Internet20%

Others17%

Voice Internet1Q11

1Q10

RM mn

RM mn

RM2,148mn

RM2,125mn

402 437 453

1Q10 4Q10 1Q11

398491

425

1Q10 4Q10 1Q11

357440

346

1Q10 4Q10 1Q11

Data

RM mn RM mn

Others

-3.1%

-21.4%

+12.7%

+3.7%

-4.5%

-3.0%

+6.8%

-13.4%

Note: Due to lower revenue by TM Global Note: Due to lower revenue by GITN and Yellow Pages

Note: 1Q2010 revenue of RM20mn reclassified from internet to voice

968 953 924

1Q10 4Q10 1Q11

RM mn RM mn

Group Total Revenue by Line of Business

16

Retail78%

Global10%

Wholesale9%

Others3%

1Q11

1Q10

RM2,148mn

RM2,125mn

* Others comprise of revenue from Property Development, TM R&D, TMIM, UTSB and MKL

Retail Wholesale

Retail79%

Global8%

Wholesale9%

Others4%

561 585 592

437 446 440

347 358 337

320 347 328

1Q10 4Q10 1Q11

Consumer SME Enterprise Government

202276

182

1Q10 4Q10 1Q11

190 193 190

1Q10 4Q10 1Q11

+14.5%

RM mn

-1.6%

+0.0%

RM mn

-31.9%

RM mn

-34.1%

-9.9%

RM mn

-2.2%

+1.9%

69116

79

1Q10 4Q10 1Q11

1,6971,7361,665

Note: Due to lower IRU sales and reduced traffic minutes Note: Lower due to reduction from Yellow Pages and TMF

Global Others*

UniFi update – leading & shaping the future

17

1

UniFi update as at today*…

2

4

delivered 855,000 premises passed covering 66 exchanges

Signed MOU with an access-seeker toprovide HSBB (Access) service, HSBB(Transmission) on a wholesale arrangementand expect to sign definitive agreement byend-May.

HSBB ARPU as at 31 March 2011 is RM199

Ramping-up of Unifi service and takeup

5

On track to deliver 1.1 million premisespassed by end 2011 covering 78 exchanges

3

Activated more than 86,000 customers

*as at 24 May 2011

3,60312,456

28,77155,156

448

1,445

4,125

8,385

2Q10 3Q10 4Q10 1Q11

Residential Business

4,051

13,901

32,896

63,541

+93.2%

+10 +19 +31

Net adds (in thousand)

1,499 1,761 1,4926,608 7,894

746772 940

4,3745,357

1Q10 2Q10 3Q10 4Q10 1Q11Other States Klang Valley

2,763 2,775 2,794 2,799 2,710

1,553 1,558 1,533 1,535 1,607

0

1,000

2,000

3,000

4,000

5,000

1Q10 2Q10 3Q10 4Q10 1Q11

Residential Business

1,212 1,261 1,311 1,393 1,417

273 280 285 287 291

0

500

1,000

1,500

2,000

1Q10 2Q10 3Q10 4Q10 1Q11

Residential Business

In thousand

In thousand

+0.0%

+15.0%

-0.4%

1,485

+1.7%

4,316

Physical Highlights

Streamyx Customer Growth

Fixed Line Customer Growth

WiFi Hotspot Zones

2,245

+490.2%

+20.7%

*Call Usage Only ** Streamyx Gross ARPU only

Net adds (in thousand)

1,541

+56

2,533

4,333

2,432

4,327

+55

1,596 10,982

+84

1,680

4,334

Note: inclusive of NBI initiative

18

Broadband champion - with continued growth in all segments

+28

1,708

4,317

13,251

ARPU (RM) 1Q10 2Q10 3Q10 4Q10 1Q11

Fixed Line* 35 35 35 34 33

Streamyx Broadband* 82 81 77 78 77

Performance Overview

Financial review

Operating highlights

Concluding remarks

19

Key Takeaways

Capital Management

Financial Performance• Revenue and EBITDA grew by 1.1% and 1.5% YoY.

• Non-voice revenue continues to surpass voice

• Capex / revenue ratio for total capex improved from 13.9% for

to 9.7%.

• Continued monetization of non-core assets

Broadband leadership

• Continued growth for broadband products

• Streamyx grew 15.0% YoY to 1.7mn

• Wifi hotspots zones grew by 490.2% YoY to 13,251 sites

Unifi

• Unifi subscribership grew by 93.2% QoQ to 63,541 customers

• 808,000 premises passed over 63 exchange areas in 1Q2011

• HSBB rollout on track to reach 2011 target of 1.1mn premises

Appendices

1Q11 4Q10 1Q10 1Q11 vs 1Q10

Operating Revenue (RM mil) 2,148.2 2,320.6 2,124.9 -

Other Operating Income(RM mil)

21.3 52.7 30.9 -

Direct Costs % 18.6 19.4 21.3 Lower interconnect and international outpaymentRM mil. 403.1 460.1 458.7

Manpower % 20.8 20.9 19.1 •New collective agreement,•Higher sales commissionsRM mil. 452.2 497.2 410.7

Supplies & Materials % 5.0 7.4 5.2•Lower project cost in line with lower revenue

RM mil. 108.5 176.0 111.2

Bad & Doubtful Debts % 1.7 0.9 1.6 Higher trade bad debts from consumer & SMERM mil. 35.9 21.6 33.6

Marketing Expenses % 4.3 3.7 4.1 Higher charges & commission incurred for Unifi, Smart Call and Streamyx

RM mil. 93.9 87.8 87.7

Maintenance Cost % 4.7 5.1 5.1 •Lower maintenance at TM, VADS and MKL,•Reduction at Support BusinessRM mil. 102.9 121.4 110.5

Other Operating Costs % 11.2 10.6 10.4 •Higher charges & commissions•Provision for stock writeoffRM mil. 242.1 250.6 223.4

Depreciation & Amortisation % 23.0 23.8 21.2New asset additions

RM mil. 500.0 565.7 456.8

Total (RM mil) 1,938.6 2,180.4 1,892.6 -

Total (%) 89.4 91.9 87.8 -

Cost % of Revenue

22

7,910.7

162.2

8,872.2

5,456.2

1,616.5

1,760.3

39.2

16,945.1

7,375.9

1,808.5

851.9

3,555.8

1,159.7

3,933.3

3,257.6

16.4

659.3

3,442.6

12,834.2

668.3

16,945.1

7,709.4

150.8

8,630.3

5,506.0

1,664.2

1,432.1

28.0

16,490.5

6,938.5

1,801.5

527.8

3,488.5

1,120.7

4,289.5

3,639.2

26.0

624.3

2,649.0

13,112.1

729.4

16,490.5

Shareholders’ Funds

Non-Controlling Interests

Deferred & Long Term Liabilities

Long Term Borrowings

Deferred Tax

Deferred Income

Derivative financial liabilities

Current Assets

Trade Receivables

Other Receivables

Cash & Bank Balances

Others

Current Liabilities

Trade and other Payables

Short Term Borrowings

Others

Net Current Assets

Property Plant & Equipment

Other Non-current Assets

RM MillionAs at 31 March 2011 As at 31 Dec 2010

Group Balance Sheet

23

788 787 769

208 215 229

399 431 448

333394 343

0

500

1000

1500

2000

1Q10 4Q10 1Q11

Voice Data Internet Others

Consumer34%

SME26%

Enterprise21%

Government19%

Consumer35%

SME26%

Enterprise20%

Government19%

Total Revenue By Products

RM mn

-2.2%

1,7361,665

1Q11

+1.9%

RETAIL

Revenue by ProductRevenue by Business Unit

1Q10

Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination

1,697

RM mn

RM mn

RM1,697mn

RM1,665mn

24

69 58 55

134 154 149

1623

21

0

50

100

150

200

250

1Q10 4Q10 1Q11

Voice Data Others

RM mn

MC : Malaysian CarrierASP : Application Service Provider

Others : Include internet

WHOLESALE

Revenue by ProductRevenue by Customer Segment

190193

190

-1.6%

+0.0%

1Q11

1Q10

Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination 25

ASP16%

MC84%

ASP17%

MC83%

113 111 102

101

168

87

5

5

2

0

100

200

300

1Q10 4Q10 1Q11

Voice Data Others

Africa & Middle East

8%America

7%

Europe10%

South Asia38%

North Asia18%

Oceania8%

Others12%

1Q11

1Q10

RM mn

Others : Include internet

202

GLOBAL

Revenue by Product

Revenue by Region

276

182

-9.9%

-34.1%

Note: Total revenue is after inter-co elimination. Revenue of product is before inter-co elimination26

Africa & Middle East

9%America

6%

Europe12%

South Asia42%

North Asia12%

Oceania7%

Others13%

THANK YOUAny queries please email to : investor@tm.com.my

•Investor Relations• Level 11 (South Wing)•Menara TM •JlnPantaiBharu •50672 Kuala Lumpur, Malaysia • Tel (603) 2240 4848/ 7366 / 7388