Malaysia's largest telecommunications company Telekom Malaysia announced that its net profit plunged by 66 percent in 2005 after making a provision to pay an award to Germany's Deutsche Telekom.

The company posted a net profit of RM875.23 million (US$235.59 million) during its 2005 financial year compared to RM2.61 billion in 2004, it said in a statement to the stock exchange.

Telekom's mobile arm Celcom has been ordered to pay RM879.5 million to Deutsche Telekom's unit DeTeAsia after losing a dispute over a share sale agreement.

"The Group profit before taxation decreased by 140.0 percent (RM1,321.6 million), mainly due to provision for a claim which was made under protest in respect of the award to DeTeAsia Holding GmbH," it said.

Telekom also posted a fourth-quarter net loss to December of RM701.27 million compared to a net profit of RM824.20 million in the same period the previous year.

Internet and multimedia services

However, Telekom saw higher sales for the full year of RM13.94 billion against RM13.25 billion previously.

On the outlook for 2006, Telekom said it expected performance to improve, with revenue mainly driven by further growth in its Internet and multimedia services, mobile services and international operations.

Mobile and broadband services will be key engines of growth, while Telekom said it will continue its efforts to roll out 3G and improve mobile data services to further strengthen its market position.

Telekom will also enhance the value of its current overseas investments while exploring other potential markets in the region and expanding its global reach through partnerships and alliances, it added.