TELECOMMUNICATIONS companies have generally maintained their 2026 guidance, projecting low single-digit growth in both revenue and earnings.
RHB believes the indirect effects of geopolitical uncertainties remain manageable, supported by ongoing cost optimisation efforts across the sector.
However, weaker consumer spending stemming from a prolonged energy crisis is likely to keep competitive pressures elevated in the second half of 2026, with operators increasingly focusing on value-driven offerings.
At the same time, an uncertain global economic environment could lead businesses to delay IT and digital transformation spending, an area that has emerged as an important growth driver for telcos.
From a policy perspective, the rollout of the JENDELA Phase 2 (JP2) project is expected to benefit mobile network operators (MNOs) as well as telecommunications infrastructure players such as OCK Group and Reach Ten.
Nevertheless, ongoing developments surrounding the 5G landscape are likely to continue weighing on sector sentiment.
RHB remains positive on the wireline segment, which offers more resilient earnings and stronger growth prospects, underpinned by expanding data centre contributions and continued growth in wholesale services.
“We expect the JP2 tender outcomes (involving 1,000 sites nationwide) to be known in 3Q26, with a tender submission deadline of 19 Jun,” said the research house.
Similar to Jendela Phase 1, which concluded in late 2022, both Sabah and Sarawak have the largest site allocations, totalling 68% or 69% of overall sites nationwide.
In terms of access technologies, broadband wireless access includes the use of Starlink accounting for more than 60% of sites, with mobile towers making up the remainder.
RHB sees OCK and Reach Ten as key beneficiaries of the JP2 projects, given their execution track record in JP1 and various digitalisation initiatives.
Reach Ten is a reseller of Starlink BWA, having delivered the solutions to over 500 sites across Sabah and Sarawak.
“We expect the second part of the JP2 to be unveiled later this year. This should involve a larger number of sites, with the Government having identified 2,700 sites nationwide previously,” said RHB. —June 16, 2026
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