Telekom Malaysia's near-term growth trajectory will be underpinned by the country's 5G rollout and its data centre business, according to a Star market note.

The framing positions TM at the intersection of two structural demand drivers in Malaysian digital infrastructure: nationwide fifth-generation mobile deployment and accelerating demand for data centre capacity across Southeast Asia.

Telekom Malaysia, traded on Bursa Malaysia as TM, is the country's incumbent fixed-line and mobile operator. The group combines a nationwide fibre backbone, multiple submarine cable landings, a 4G mobile network and an emerging 5G retail proposition. The 5G wholesale layer sits with Digital Nasional Berhad (DNB), the state-backed single wholesale network set up under the Malaysian Communications and Multimedia Commission's spectrum assignment programme. TM operates as a participating access provider, selling 5G retail services on top of the DNB wholesale layer under the regulator's reference access offer. Data centre capacity sits within TM's wholesale and enterprise division alongside its domestic fibre and submarine cable footprint.

What does the 5G exposure change for TM?

TM does not own the underlying 5G radio network. The commercial structure means retail monetisation at TM depends on access pricing set by DNB and on the pace at which TM converts its installed mobile base to 5G plans. Wholesale backhaul for 5G sites typically rides on TM's fibre footprint, giving the operator an additional monetisation route beyond retail.

Any move by the Malaysian government to restructure DNB ownership, or to shift toward a multi-wholesaler model, would reset TM's cost stack. Retail tariff competition, device penetration rates and the speed of 5G handset migration will determine how much wholesale access cost TM can recover through subscriber revenue. The Star framing implicitly rests on TM converting its converged fibre-and-mobile customer base into 5G plans at scale.

What is the data centre thesis anchored to?

Malaysia's data centre market has expanded on the back of cross-border spillover from Singapore. Land and power constraints in Singapore have pushed hyperscalers to evaluate sites in Johor and Cyberjaya. State incentives under the Malaysia Digital Economy Blueprint have reinforced that pull by streamlining approvals for hyperscale builds. Johor's proximity to submarine cable landings lowers latency for cross-border traffic.

TM's wholesale fibre footprint into Singapore and across Malaysia gives the operator a route to monetise cross-border enterprise demand through co-location, managed hosting and cloud-connect products. The economics depend on long-term hyperscale offtake contracts and on securing land and power inside the constrained Johor and Cyberjaya corridors.

What execution risks still apply?

Coverage on the DNB layer continues to expand but is not yet at the level of mature 5G markets in North Asia. Retail tariff competition from CelcomDigi, U Mobile and Maxis will determine revenue per user on the 5G retail side. Capital intensity on new data centre builds affects returns on the wholesale and enterprise side.

The MCMC's ongoing review of DNB ownership structure, and any subsequent change to access terms, would shift economics across both pillars. Power costs in Johor and water availability for hyperscale cooling are operational variables that influence build pacing. Singapore's stance on data centre moratoriums shapes regional capacity allocation and the pace of spillover demand into Johor.

Forward-looking: Malaysia's 5G framework is moving through a transition period as the government reviews the DNB wholesale model. TM's ability to translate wholesale 5G access into retail subscriber wins, alongside long-term hyperscale offtake contracts on the data centre side, will determine whether the operator matches the growth trajectory flagged in the Star note.