Telcommunications Analysis
Telecommunications Sector
Results Season Takeaways
Phillip Securities Research Pte Ltd 1 March 2012
Report type: Update
Sector Overview The Telecommunications Sector under our coverage consists of SingTel, Starhub & M1. Starhub (STH) and M1 are pure plays to the Singapore market, while SingTel (ST) has exposure to the Asia-Pacific region through its regional mobile associates. No major earnings surprise Launch of iPhone 4S lifted revenue in the quarter PayTV ARPU improved for Starhub 100k fibre broadband subscribers or 8% of total wired broadband Continue to prefer SingTel over Starhub & M1 Earnings Surprise? There were no major surprises in this quarter’s results. However, Starhub’s results were marginally above expectations due to one off items that flattered EBITDA by c.S$10mn and stronger than expected postpaid mobile ARPU. Even after stripping out the effects of one off gains, the results would still have beaten our estimates. Due to boosters from the launch from iPhone 4S in the quarter, M1 reported relatively strong equipment sales with its unique fair value accounting policy. SingTel’s Group level profits were negatively impacted by lower contributions from its regional mobile associates. SingTel’s focus in Singapore seems to be on growing its subscriber base. Mobile SingTel gained postpaid market share M1’s postpaid ARPU trended south due to early recognition of sales Handset sales flattered revenue in the quarter Better data pricing is the key to better profitability PayTV SingTel continued to increase its subscriber base, while Starhub’s subscriber base was stable ARPU: Starhub improved, SingTel stable Broadband 100k residential fibre broadband subscribers (8% of total residential wired broadband) SingTel: c.55k, M1: c.22k, Starhub: undisclosed Fibre take up rate still slow due to capacity constraints Capacity at OpenNet to improve in March 2012 Recommendation We continue to prefer SingTel for its cheaper valuation
Results Season Takeaways
Phillip Securities Research Pte Ltd 1 March 2012
Report type: Update
Sector Overview The Telecommunications Sector under our coverage consists of SingTel, Starhub & M1. Starhub (STH) and M1 are pure plays to the Singapore market, while SingTel (ST) has exposure to the Asia-Pacific region through its regional mobile associates. No major earnings surprise Launch of iPhone 4S lifted revenue in the quarter PayTV ARPU improved for Starhub 100k fibre broadband subscribers or 8% of total wired broadband Continue to prefer SingTel over Starhub & M1 Earnings Surprise? There were no major surprises in this quarter’s results. However, Starhub’s results were marginally above expectations due to one off items that flattered EBITDA by c.S$10mn and stronger than expected postpaid mobile ARPU. Even after stripping out the effects of one off gains, the results would still have beaten our estimates. Due to boosters from the launch from iPhone 4S in the quarter, M1 reported relatively strong equipment sales with its unique fair value accounting policy. SingTel’s Group level profits were negatively impacted by lower contributions from its regional mobile associates. SingTel’s focus in Singapore seems to be on growing its subscriber base. Mobile SingTel gained postpaid market share M1’s postpaid ARPU trended south due to early recognition of sales Handset sales flattered revenue in the quarter Better data pricing is the key to better profitability PayTV SingTel continued to increase its subscriber base, while Starhub’s subscriber base was stable ARPU: Starhub improved, SingTel stable Broadband 100k residential fibre broadband subscribers (8% of total residential wired broadband) SingTel: c.55k, M1: c.22k, Starhub: undisclosed Fibre take up rate still slow due to capacity constraints Capacity at OpenNet to improve in March 2012 Recommendation We continue to prefer SingTel for its cheaper valuation