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Temasek seeks to sell $3.1 billion stake in Thailand's Shin Corp to Singtel. Is this good or bad for Singtel?

http://www.reuters.com/article/2014/02/1...H520140218

(18-02-2014, 09:45 AM)Ben Wrote: [ -> ]Temasek seeks to sell $3.1 billion stake in Thailand's Shin Corp to Singtel. Is this good or bad for Singtel?

http://www.reuters.com/article/2014/02/1...H520140218

One critical info is the price. It will further expand its reach within Asia, IMO. We can only comment further when more detail available.

Another question is how SingTel fund the acquisition, with its additional capex on digital life?

(vested)

That is definitely a political risk of AIS...

(vested)

Shares of Thailand's AIS, Shin down 3% as customers shift to rivals

24 Feb 2014 12:11
[ BANGKOK] Shares of Thailand's largest mobile operator Advanced Info Service Pcl (AIS) and biggest shareholder Shin Corp fell around 3 per cent on Monday after data showed more subscribers had switched to rival mobile networks.

The shift followed a call by anti-government protesters to boycott businesses linked to caretaker Prime Minister Yingluck Shinawatra.

At 0335 GMT, AIS was down 3 per cent at 204 baht, and Shin Corp was down 2.4 per cent at 70.25 baht. The broader index was 0.6 per cent lower.

Ref: Business Times Breaking News

One more telecom operator moved to A-LTE. M1 already has plan to install within this year, SingTel will start later of the year. Starhub?

It will increase the data usage of their subscribers...

(vested)

SingTel to launch new, improved 4G services with Ericsson

SINGAPORE — SingTel has announced the launch of new 4G/LTE services in collaboration with Ericsson.

These include LTE-Advanced, which offers 300Mbps mobile broadband speeds; LTE Broadcast, which improves video streaming; and enhanced indoor coverage with Ericsson’s Radio Dot System technology.

LTE-Advanced is expected to improve system capacity and network coverage on top of doubling current maximum data speeds, and SingTel’s network will be upgraded to LTE-Advanced later this year.
...
http://www.todayonline.com/tech/singtel-...s-ericsson

SingTel chief executive Chua Sock Koong has called on regulators to give carriers like Optus the right to charge rivals WhatsApp and Skype for use of their networks or risk a major decline in network investment.

Mr Koong praised Australia's regulatory market at the Mobile World Congress event in Barcelona as one of the few countries in the world to allow a foreign player to have total ownership of a telco provider.

The main problem we have as an industry is we have been unable to monetise this increased demand
SingTel owns Optus, which is Australia's second largest provider of telecommunications services. It invested almost $1 billion during financial year 2013 in its fixed line and mobile networks.

But the CEO warned such investments would be slashed unless regulators allowed them to start charging over-the-top (OTT) rivals like WhatsApp for using their networks.

WhatsApp was bought by Facebook last week for $US19 billion and provides free messaging services to its 450 million users. The rise of companies like it have helped cut revenues from phone calls and text messaging at traditional carriers.

"The main problem we have as an industry is we have been unable to monetise this increased demand ... and [average revenue per user] has fallen over time," she said. "I think the pace of change in our industry is relentless so clearly we can't afford to stand still.

"If we are not careful we could stand the risk of being totally disintermediated."

She called on regulators to allow carriers to detect and charge OTT players when their services were being provided over the network. While Telstra has experimented with such moves, the Australian Competition and Consumer Commission considers it to be anti-competitive.

But Ms Koong said the solution was not to simply levy companies like WhatsApp but to become their partners.

"Our ambition must be to become the preferred network partners of customers and OTT players," she said. "We must create sustainable revenue models."

Her comments echoed those of Optus head of networks Vic McClelland who told The Australian Financial Review earlier this year the company was working to provide priority services at a cost for customers wanting better access to streaming video services like YouTube.

The author travelled to Mobile World Congress courtesy of Huawei

http://m.smh.com.au/business/singtel-chi...33dmb.html

I have noticed the trend. It is not only in Australia, telecom operators in other regions also trying to push for the same e.g. US, China etc.

Let's see the outcome. It will release the pressure of telecom operators from OTT services, and hopefully a win-win will be achieved.

(vested)

(26-02-2014, 09:34 PM)maximillian Wrote: [ -> ]SingTel chief executive Chua Sock Koong has called on regulators to give carriers like Optus the right to charge rivals WhatsApp and Skype for use of their networks or risk a major decline in network investment.

Mr Koong praised Australia's regulatory market at the Mobile World Congress event in Barcelona as one of the few countries in the world to allow a foreign player to have total ownership of a telco provider.

The main problem we have as an industry is we have been unable to monetise this increased demand
SingTel owns Optus, which is Australia's second largest provider of telecommunications services. It invested almost $1 billion during financial year 2013 in its fixed line and mobile networks.

But the CEO warned such investments would be slashed unless regulators allowed them to start charging over-the-top (OTT) rivals like WhatsApp for using their networks.

WhatsApp was bought by Facebook last week for $US19 billion and provides free messaging services to its 450 million users. The rise of companies like it have helped cut revenues from phone calls and text messaging at traditional carriers.

"The main problem we have as an industry is we have been unable to monetise this increased demand ... and [average revenue per user] has fallen over time," she said. "I think the pace of change in our industry is relentless so clearly we can't afford to stand still.

"If we are not careful we could stand the risk of being totally disintermediated."

She called on regulators to allow carriers to detect and charge OTT players when their services were being provided over the network. While Telstra has experimented with such moves, the Australian Competition and Consumer Commission considers it to be anti-competitive.

But Ms Koong said the solution was not to simply levy companies like WhatsApp but to become their partners.

"Our ambition must be to become the preferred network partners of customers and OTT players," she said. "We must create sustainable revenue models."

Her comments echoed those of Optus head of networks Vic McClelland who told The Australian Financial Review earlier this year the company was working to provide priority services at a cost for customers wanting better access to streaming video services like YouTube.

The author travelled to Mobile World Congress courtesy of Huawei

http://m.smh.com.au/business/singtel-chi...33dmb.html

Price went down on high volume this morning. Is this a backlash for trying to bring out the subject of charging OTT rivals? Or are investors thinking that such a move is highly impossible.

Personally, I don't think Singtel, or other telcos can succeed in charging OTT rivals, at least in the near future. Even if they can, these OTT operators can easily pass on the increase cost to end consumers. With technology advancement, the operating environment for telcos is definitely getting more difficult.

http://www.channelnewsasia.com/news/busi...14578.html

Have divested SingTel shares, waiting for it to drop to attractive level again.

SingTel seems don't mind the cross-carriage. May be Singtel already has mastered the skill to extract value, even on cross-carriage programme.

(vested)

SingTel's mio TV wins exclusive World Cup 2014 deal

SingTel's mio TV has won exclusive rights to the 2014 FIFA World Cup Brazil matches.

This broadcast is subjected to the cross-carriage rule and therefore can be accessed from StarHub's cable TV platform.

The World Cup matches are free for customers who sign up for, or extend their, mio TV Gold Pack or mio Stadium+ contracts for 24 months. This applies to customers on both mio TV and StarHub platforms.

Those who want to watch the World Cup without signing a contract will have to pay a one-time fee of $105, excluding GST, on either platform.

Ref: http://www.theedgesingapore.com/the-dail...-deal.html

An analyst report from Citi Research on SingTel...

SingTel to gain from World Cup strategy, says Citi

THE EXCLUSIVE DEAL won by Singapore Telecommunications (SingTel) for broadcast rights to the 2014 FIFA World Cup tournament, has yet again brought into sharp focus, the contest with rival pay-TV operator, StarHub, for dominance of the Singapore market.

SingTel announced that its subscribers will be able to view the 64 matches at no extra cost, so long as they enter a re-contract agreement of 24 months for any of the telco’s existing pay-TV packages. Rival operator, StarHub, was suitably miffed, arguing that the viewing public would have been better served if the two operators had secured the rights on a joint basis.

Therefore, rather than paying $112.35 (plus GST) to SingTel, existing subscribers can lock themselves to the telco for two more years in exchange for viewership of the matches. Is this a smart move for SingTel in its race to overtake StarHub as the dominant pay-TV provider? Arthur Pineda, a telco analyst at Citi Research, thinks so.

He thinks SingTel stands to gain from the re-contracting strategy, even if StarHub wants to cross-carry the matches on its platform. “Given that the contracts are generally over a two-year period, this would also result in stickiness among mioTV subscriptions,” he says. “We have noticed that mioTV has continued to gain market share in Singapore's pay TV market. For 2013, mioTV gained 20,000 subscribers versus StarHub's loss of 3,000 subscribers.”

Furthermore, there has been no sign of any material migration of subscribers despite the introduction of media cross-carriage laws in Singapore since 2011. Pineda pointed to the fact that StarHub's subscriber base grew by only about 2,000 in 4Q2013 on a q-o-q basis compared to SingTel growth rate of 4,000 over the same period.

“We remain concerned on the outlook for StarHub's pay-TV business which makes up 17% of total service revenue in FY2013, given the intense competition posed by SingTel’s mioTV,” says Pineda. And there is an additional source of concern for both pay-TV operators as well. Over-the-top (OTT) content providers such as Apple TV, Netflix and Hulu (the latter two available through Virtual Private Networks subscriptions) have been making inroads into the market here, although their exact progress is difficult to gauge as subscriptions in this part of the world are not legally sanctioned.


NOT BULLISH ON EITHER TELCO
As a result, Pineda isn’t bullish on either Singapore telco. He rates SingTel only as “neutral” while StarHub is a “sell” with a target price of $3.55 versus a closing price of $4.03 on March 21. “Moreover, the evolution of pay-TV aggregators also weighs on StarHub's TV operations over the longer term,” he says. The current valuation of its shares is therefore rich, in his opinion. At a lower target price of $3.55, StarHub would already trade on a PE ratio of 15.6 times of its FY2014 earnings and a EV/EBITDA ratio of 9.3. Even at those valuations, the stock will “not be cheap”, although supported by a “firm and sustainable” dividend of 20 cents per share which allows for a “healthy yield”.


Where SingTel is concerned, Pineda says that its recent results for 3QFY14 were “well within expectations” but he did not see a positive catalyst to drive its stock price further. “Upside risk to SingTel's 5% yield is unlikely given the lack of assets and the potential capital requirement for its Digital Life business,” he adds. Despite his estimated fair value of $3.86 for the telco, Pineda’s target price incorporates a discount factor of 10% that is usually applied to stocks like SingTel which also operate as a holding company for listed affiliates. That lowers his long-term estimate of SingTel’s price to $3.66, only slightly above its close of $3.53 on March 21, to explain his “neutral” rating.

But downside risks to SingTel may include the risks of any overpayment in its M&A deals; continuing depreciation in the operating currencies of its listed affiliates against the Singapore dollar; and the “overhang threat” from the divestment of Temasek Holdings’ majority stake in the company due to Singapore’s bilateral Free Trade Agreement with the US. As far as the last risk is concerned, Pineda says he is “comforted by our view of Temasek not being a value-destroyer by looking to sell indiscriminately, but instead looking to structure a gradual stake reduction over the longer term”.

http://www.theedgesingapore.com/blog-hea...-citi.html#

I have fully divested on Singtel @3.67 and recycle the fund into others.

The Singtel story was on asset play, mainly on the Netlink, but a failed story due to the extension till 2018.

XIRR shows a return of 13.2%, not too bad. I will be back.

(not vested)