After rallying to a record high of $4.53 on 15 April, SingTel has retreated 10% in the past six weeks, double the pullback seen in the benchmark STI. On Tuesday, the stock closed below the $4 mark for the first time since January this year.
 
The heavy retreat has come despite a strong set of results on 14 May and the potential opportunities arising from the Singapore government’s smart nation vision which has entered the ‘build’ phase…

Stirling results announced in May
Two weeks ago, SingTel announced a strong set of four quarter results ending 31 March which saw net profit up 4.5% over the same period last year. Its results were lifted by strong growth in customers and mobile data services from its regional mobile associates such as Optus. The latter’s pre-tax earnings jumped 12% in the fourth quarter.
SingTel’s CEO Chua Sock Koong said that the company’s strong core performance, especially in mobile would give SingTel “the capacity to invest in growth initiatives" like augmenting its digital marketing activities and investments in cyber security.
 
“Smart nation” to create opportunities?
The Singapore government's vision to become the world’s first "smart nation" may create opportunities for Singapore telecom operators. The first phase of the project involves connectivity: a project to keep everyone in the island city state perpetually connected to the internet via their mobile devices. Through an initiative termed HetNet (abbreviated from Heterogeneous Network), the government aims to enable everyone to remain online from the moment they leave their home until they return.

To achieve this, IDA is working with four Singapore telcos – Singtel, StarHub, M1, and MyRepublic – who will provide the infrastructure so that the user can seamlessly switch between his/her own personal connection and a public one provided by HetNet as he/she moves about the city. 

SingTel announced in January that they were committed to bringing 5G services to its customers and supporting Singapore’s vision of becoming a Smart Nation. Singtel’s Group Chief Technology Officer Mr Tay Soo Meng had said: “In Singapore, 5G technology development will enable the Smart Nation vision in the next five to 10 years, by providing a superb wireless connectivity layer with huge capacity and solid reliability for human-to-human and machine-to-machine communications. And Singtel is working towards being one of the first in the world to roll out 5G in the year 2020.” 

SingTel has already partnered strategic vendors such as Ericsson as part of its 5G exploration programme.

SingTel’s competitor StarHub, has said it is developing big-data analytics platforms storing and using information collected from its networks. It has established SmartHub with government sponsorship to provide research institutions and enterprise customers with data such as location-based information and consumer behaviour.

Singapore Telecommunications commands 50% of Singapore’s mobile-phone users while StarHub has approximately 26% market share and M1 around 23%.

Source: Macquarie Research - 4 Jun 2015