• There are green shots in terms of 5G uplift in Singapore and Australia as recent wins of additional spectrum will help drive the consumer business. Elsewhere, SingTel's management is on track to achieve 170MW of data centre assets in the region (worth S$7-8b). A 30MW integrated cable landing station and data centre is underway in Singapore as SingTel seeks financing options while the Thailand-Indonesia partnership remains in active discussions.
• Maintain BUY call on SingTel.

Cementing 5G Coverage in Singapore With Encouraging Take-up for 5G Bundled Services..

• SingTel (SGX:Z74) and Antina (M1-StarHub consortium) have each been provisionally awarded 25MHz of the 2.1GHz spectrum, while TPG Telecom (TPG) obtained 10MHz. We believe this is a complementary spectrum for incumbent SingTel and Antina and there is little risk of TPG as the third 5G player in Singapore. This is because TPG is handicapped by the absence of 3.5GHz spectrum and the ARPU uplift might not ‘fit’ its customer value proposition.
• We gathered that SingTel currently have more than 1,000 standalone 5G sites across Singapore and SingTel is on track to meet Infocomm Media Development Authority’s (IMDA) target of 50% population coverage by end-22. SingTel also notes encouraging 5G adoption via bundled packages. This has led to ARPU uplift (for 5G bundles) and helped address dilution from 4G SIM-only plans. To recap, SingTel’s postpaid ARPU in 1HFY22 have stablised at S$28/month thanks to encouraging 5G bundled take-ups.

...and ARPU Uplift in Australia

• Additionally, Optus obtained a 900MHz 1HFY22 ARPU for Optus postpaid to A$40/month (stable q-o-q) and net add of 34,000 postpaid subscribers.

On Track to Shape a Green Regional Data Centre With S$8b Valuation

• To capitalise on the accelerating data centre Gulf’s power asset business (security of power supply being an integral part of data centre) and influence in the society.

Seeking “best Solutions” for Amobee and Trustwave

• We understand that Trustwave – a North America business – is currently carved out and management is looking for the best fit be it in terms of merger or divestment. Additionally, Amobee is currently under a new set of management to turn around the business. Both assets have been de-emphasised following the write-down in Dec 21 (amounting to about S$1b of impairment).

Maintain BUY Call on SingTel

• Maintain BUY call on SingTel with SingTel's share price currently trades at its five-year mean EV/EBITDA of 13x.

• Key re-rating catalysts include:
  1. successful monetisation of 5G,
  2. faster-than-expected recovery in Optus’ consumer and enterprise businesses, and
  3. market repair in Singapore and resumption of regional roaming revenue.
• SingTel is one of the UOBKH's Singapore Stock Alpha Picks.

Source: UOB Kay Hian Research - 16 Dec 2021