KENANGA Research has maintained its “overweight” recommendation on the telecommunications (telco) sector.
In a sector update, the research house believes that investors are less cautious on 5G as monetisation opportunities emerge from selling managed solutions and cloud offerings to enterprise clients in the immediate term.
“Furthermore, as adoption of generative artificial intelligence (AI) cloud solutions gain momentum, this could emerge as an earnings growth driver for telco operators over the longer term,” it said.
“On top of that, the looming announcement of the official 5G Dual Network policy directive would finally resolve uncertainty that has weighed on sector sentiment.”
The research house’s top picks are TM (OP; TP: RM7.22) and CDB (OP; TP: RM5.83).
Meanwhile, Kenanga Research noted Infocomm Media Development Authority of Singapore (IMDA) assistant director Vanessa Wilfred as saying at MCMC’s International Regulatory Conference 2024 recently that the development of AI governance policies is essential to inspire trust and displace suspicion surrounding AI.
“Therefore, legislation and guidelines should be in place to counter cybersecurity threats to the telco industry and its users arising from AI,” it stated.
“This includes the perpetration of online scams, proliferation of deep fakes, phishing, etc. At this early juncture, only the European Union (EU) has implemented broad-based acts to regulate AI.
“For other countries, in order to kick start the journey of regulating AI, IMDA believes that AI providers should be transparent and forthcoming in their disclosures to highlight any risks presented by AI.
“Hence, this would result in better understanding, and thus enable organisations and regulators to work towards risk management measures in mitigating AI threats.”
Kenanga Research also cited Blackberry Cybersecurity’s Jonathan Jackson’s speech where the latter had spoken about other ways to combat cybersecurity threats.
“Jackson believes that organisations and digital citizens should leverage on AI as an effective tool to enhance cybersecurity. In other words, this involves ‘using AI to fight AI’.”
On the future of AI in Malaysia, the research house further noted that YTL Communications CEO Wing K Lee is steering the group in playing its part in shaping the future of AI in the country via its upcoming YTL AI Cloud service.
The AI cloud service will be powered by Nvidia Grace Blackwell-powered DGX Cloud to accelerate the development of generative AI.
Its AI compute power will surpass more than 300 exaflops, rendering it as one of the fastest supercomputers in the world. – May 8, 2024
Main pic credit: BusinessToday
