...Limited Rating Headroom: Fitch Ratings expects Telekom Malaysia Berhad's (TM) funds flow from operations (FFO)-adjusted net leverage for 2016-2017 to be around 2.2x, due to the network rollout of long-term evolution (LTE), high-speed broadband (HSBB2) and sub-urban broadband (SUBB). The Stable Outlook reflects our view that TM will deleverage to 1.8x-2.0x in 2018-2019; we are likely to consider taking negative ratings action should that be delayed. FCF Deficit: Fitch believes TM's cash flow from operations of MYR3.0bn-3.2bn for 2016 will not be sufficient to cover its capex and dividend commitments. TM's expansion in fibre infrastructure and LTE is likely to increase gross capex to MYR3.3bn-3.6bn in 2016 and 2017 (2015: MYR2.5bn), with possible front-loading of HSBB2 and SUBB investment in the initial years. Our forecasts assume a flat operating EBITDAR in 2016, as operating expenditure rises to support subscriber acquisition and growth in fibre broadband services. We also expect EBITDA...
