Singapore Stock Market News

Singtel - Investor day takeaways

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Publish date: Mon, 05 Dec 2011, 12:30 PM
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Following Message
Our view on Singtel is unchanged after its analysts' day. We are more positive on Telkomsel as we feel that it can now respond effectively to competition. Also, Globe would seize market opportunities when PLDT is emgrossed with merging with Digitel.

However, a weakening Indian rupee, regulatory risks in India and competition in Australia top our concerns. SingTel did not reveal anything new at the group level. OUTPERFORM and SOP-based TP unchanged, though we still prefer StarHub as our Singapore telco pick.


Telkomsel now able to fend off competition
We are more positive on Telkomsel as competition is receding and Telkomsel is benefiting from such an environment. With a new billing system and better distribution channels, it is better able to compete. However, guidance of revenue growth of 6-7% may not be met due to the forced de-registration of premium SMS subscribers.

Globe
The prospects for Globe are good given that the consolidation of the industry will restore price discipline. Globe feels it can better position itself in a 2-player market where it is a challenger rather than a 3-player market where it is the second largest of the three.

Difficult to challenge dominance in Singapore
We feel that it is tougher for SingTel to challenge StarHub's dominance in pay TV despite the advent of cross-carriage as pseudo-exclusive clauses could be built in. However, we also that believe SingTel's dominance in providing data services to large and small/medium enterprises will be tough to break given its track record and the value-added services it has lined up.

Concerns
The depreciating Indian rupee, regulatory risks and stiff competition in Australia are our key concerns for SingTel. We should have better clarity on the regulatory issues in India by Jan-Feb 2012. Optus expects that competition from Telstra and VHA remain intense. (Read full report)

See also reports from;
Credit Suisse : Monetising the data revolution, competition stabilising across all key associates
Deutsche Bank : Highlights from Regional Mobile Investor Day

Source : CIMB Research








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