At the recent Investor Day (SID), SingTel reaffirmed its focus on investing for the future and transforming into a service-centric organisation. These initiatives should continue to weigh on earnings in the medium term. There is easing competition in a few markets but we believe it is not broad-based. The overall takeaways from the event do not alter our view on the stock, which lacks meaningful re-ratingcatalysts. Maintain our forecasts and SOP FV of SGD3.15. NEUTRAL.

Becoming more "engaged''. The CEOs of SingTel's new functional business pillars made presentations at its annual SID. The key themes were: (i) the value propositions within the digital space, (ii) customer centricity, and (iii) data bundling/monetisation opportunities. SingTel is creating an engagement layer that sits on top of its current relationship with subscribers to improve loyalty and drive future profits. It has grand plans to maximise monetisation of data across multiple platforms, although these may hurt group earnings in the medium term.

A sprinkling of positives. Competitive pressure appears to be easing in India as some telcos resorted to raising tariffs recently, but we suspect the price repair is not broad-based. Meanwhile, Optus believes it is in enviable position to compete with Telstra given the narrowing coverage gap and a visibly strong network. We expect competition to intensify in Thailand as AIS ramps up acquisition activities to migrate as many 2G subscribers as possible. In Indonesia, Telkomsel is keeping to its aggressive 3G site deployment while competition in the Philippines looks set to persist for a while, while putting pressure on Globe.

Maintain NEUTRAL. We make no changes to our forecast. The takeaways from the event do not change our view on the group, which continue to face medium-term pressure on profitability and decelerating revenue growth due to competitive headwinds in Singapore and Australia.

At the SID, SingTel held various breakout sessions for analysts with the management teams of its Singapore operations, Optus, Telkomsel, Advanced Info Service (ADVANC), Bharti and Globe. There were individual presentations by the CEOs of Group Digital Life (Allen Lew), Group Consumer (Paul O' Sullivan) and Group Enterprise (Bill Chang)- functional business pillars formed, following the organisation revamp in 2012 to better capitalise on group-wide synergies.

The event came to a close with a Q&A session with the senior management team, including Group CEO Chua Sock Koong and Group CFO Jeann Low.

Source: OSK