However, the investment bank maintained a ‘neutral’ call for the sector amid cautious mode due to uncertainties about the progress of the 5G dual wholesale network’s (DWN) business plan, a lack of growth drivers, and high operational costs resulting from ongoing tech refresh and site modernisation exercises.

“There could also be regulatory risks as the government pushes for lower-priced mobile connectivity,” it said in a research note.

AmInvestment said the telecommunications sector’s results for the fourth quarter of the financial year 2023 were within expectations.

“Axiata Group beat our forecasts due to strong performances from XL Axiata and Robi Bangladesh, albeit within expectations, CelcomDigi Bhd and Maxis Bhd were affected by the declining prepaid segment and higher interest cost.

“Meanwhile, Telekom Malaysia Bhd’s (TM) net profit registered a  double-digit growth in FY2023 on the back of tax credit savings and lower interest cost,” it said.

Meanwhile, AmInvestment reiterated its ‘buy’ call for TM with a fair value of RM7.02 per share, which is expected to be a beneficiary of the national DWN arrangement.

“TM is envisaged to enjoy higher wholesale business income from 5G rollouts and demand from data centres.

“Presently, Singapore has limited capacity to cater to demand from the data centre industry due to environmental and regulatory concerns,” it added.