Telekom Malaysia Berhad (TM) is poised to significantly strengthen its position in the data centre (DC) market, with RHB Research projecting that earnings from this segment could double by the financial year ending 2027. The bullish outlook is underpinned by ongoing infrastructure expansion and increasing demand from hyperscale clients.
RHB Research noted that TM’s twin-core data centres in Cyberjaya and Iskandar Puteri are progressing well, with both facilities expected to be fully operational by the fourth quarter of 2025. Upon completion, the expanded IT load capacity is expected to reach approximately 40 megawatts (MW), setting the stage for full utilisation and a step-change in revenue potential.
In addition to its core data centre business, TM is also benefiting from growing revenues in managed wavelength and DC fibre connectivity services, as demand from hyperscalers continues to rise. These segments are seen as strategic growth pillars that complement TM’s broader digital transformation agenda.
The research house has maintained a “Buy” recommendation on TM shares, with a target price of RM8.15. At the time of analysis, TM’s shares were trading at RM6.71.
While the long-term outlook remains favourable, RHB Research cautioned that potential risks include delays in commercialising the expanded DC capacity, slower-than-expected uptake, increased competition from colocation providers, and broader geopolitical uncertainties that may impact enterprise IT spending.
Despite the company not disclosing specific revenue figures for its DC operations, RHB’s on-ground assessments indicate solid progress at TM’s key expansion sites. In the Klang Valley, the construction of KVDC2 (Klang Valley Data Centre Block 2) has surpassed the 60% completion mark. Structural works for the four-storey facility are completed, and upon full commissioning, KVDC2 is expected to offer a total IT load of 9.2MW. It will house eight data halls (two per floor), utilising conventional air-cooling systems.
Similarly, at the Iskandar Puteri Data Centre (IPDC) located in Nusajaya Technology Park, the second block (IPDC2) is slated for completion by the third quarter of 2025. Construction of the four-storey building has already progressed beyond 70%, reflecting strong execution capabilities and adherence to project timelines.
-The Star
