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The potential sale of M1

Singtel has two babies in Thailand:

• AIS - AIS reports 4.7% drop in first-quarter net profit http://www.nationmultimedia.com/news/business/corporate/30313565
• Thaicom - Thaicom net profit slides 63% in first quarter http://www.nationmultimedia.com/news/business/30315079

Singtel should tap into the potential cashouts from the listing of Netlink Trust to takeover M1 or Starhub.

 

IMDA reviews Netlink Trust' s wholesale prices https://www.telecompaper.com/news/imda-reviews-netlink-trusts-wholesale-prices--1195211

IMDA reviews NetLink Trust&rsquo s ICO every three to five years &ldquo to ensure its reasonableness and cost efficiency&rdquo . The IMDA says most of NetLink Trust&rsquo s wholesale prices to the industry will be reduced from their current levels.

Switching a fibre-internet ISP in Singapore can take 4-8 weeks for businesses in Singapore.

MarcPh      ( Date: 12-May-2017 15:30) Posted: NetLink Trust, which announced Monday the government has cut most of its prices, has been discussing a potential annual dividend yield of about 4 percent to 5 percent, the people said, asking not to be identified because the information is private. https://www.bloomberg.com/news/articles/2017-05-09/netlink-said-to-brief-analysts-on-s-2-billion-ipo-as-fees-cut

 

NetLink Trust, which announced Monday the government has cut most of its prices, has been discussing a potential annual dividend yield of about 4 percent to 5 percent, the people said, asking not to be identified because the information is private.

https://www.bloomberg.com/news/articles/2017-05-09/netlink-said-to-brief-analysts-on-s-2-billion-ipo-as-fees-cut

 

It is getting crazy worldwide. India' s Reliance groups' Jio 4G became the world' s fastest growing telco with 100million within 6-months of launch. How did they do it? Free this & Free that.

Reliance Jio launched commercial services a month after Singtel expanded shareholdings to > 1/3 in India Bharti Airtel last year.

Bharti Airtel Q4 net profit slumps nearly 72% Reliance Jio' s free offers hurt
http://telecom.economictimes.indiatimes.com/news/bharti-airtel-q4-net-profit-slumps-nearly-72-jio-free-offers-hurt/58597492

Three years ago, Singtel was still dreaming about making Whatsapp and Whatsapp user pay for their loss in revenue - https://www.techgoondu.com/2014/02/26/commentary-singtel-wants-whatsapp-and-skype-to-pay

 

 

Local school kids are reportingly using third-party vendors such as knowroaming which provide free US or UK tel numbers, with unlimited or 1GB free Whatsapp Call and Messaging services. Industry disruptors in the new economy are commoditizing telco services. https://www.knowroaming.com/press/press_release/KnowRoaming%20free%20WhatsApp%20release.pdf

Investment funds are gradually exiting this sunset industry burdened with high management costs inherited from the old good days. http://www.businesstimes.com.sg/companies-markets/a-us130b-manager-sells-singtel-as-competition-intensifies

 

 

 

Let' s take clue about Starhub' s latest results. Their quarterly profit drops about 21%.

They lost about 22,000 prepaid mobile customers (not an issue, they still have almost 900K prepaid mobile customers) and the revenue dollars are not high in this segment. But wait a minute, isn' t starhub the most competitively-priced mobile operator in its earlier days? M1 and Singtel are usually more expensive and Circles.Life did not launch prepaid services. What went wrong?

In the post-paid arena, with the upcoming 4th operator, revenue dollar in post-paid is also expected to be narrow. Starhub is now reporting $3 drop in revenue per customer as Circles.Life is also offering $4 per 100min, $6 per GB for voice plans or $28 for 20GB data plans.

(Circles.Life taps on M1' s resources)

Starhub lost about 40,000 pay TV. On surface, they are blaming it on online-streaming. Technically, they have little competition in this arena (Mio-TV is a lightweight competitor) but in recent years, they split up TV packages/theme to make customers pay more for two packages instead of one in the past. Their refusal to address cable signal frequencies had caused 1 or 2 channels within some TV-package to be distorted for some subscribers. No refunds were given. Lastly, they continued to increase the charges for each additional setup box so that they can maximize the revenue per household. As a result, Starhub was like a cashcow darling two years ago, as they squeeze their existing customers. By now, those who have fulfilled their 2-years Pay TV contract are free to ditch Starhub.

Like M1, Starhub can' t achieve organic growth in the years ahead. If there is an industry-wide M& A consolidation:

• Singtel will be the loser due to stronger competition or the need to acquire peers.
• Starhub is at cross-roads. Their business will continue to weaken and for long-term good, Starhub should also bid for M1 (declined recently by management but not their shareholders ST Telemedia), this will crash their cashflow and dividend payouts). On the other hand, Starhub investors will see better valuations for their shares if Starhub is also put up for sale. 
• M1 can only be the bride, so investors look set rewarded with higher P/Es in the immediate future, despite a dismay business outlook.
• SPH will never be sold. They bow out of public TV business and left with a fairly sucessful radio stations. However, if SPH is enrolled to bail out Singtel, we could see SPH bidding for Starhub or M1.

 

can paint several scenarios / assumptions  here .....

supposing  if China Mobile interest in M1 is real .....

then a guess is Singtel will then try to grab Starhub, as this will be a chance to ward off  the possible threat by China Mobile ......

 

MarcPh      ( Date: 25-Apr-2017 16:34) Posted: hahah, then we will see Singtel crashing like Telstra seanpent      ( Date: 25-Apr-2017 16:02) Posted: however, assuming if Starhub becomes  an acquisition target of China Mobile ..... then it' s another story all together .....

 

hahah, then we will see Singtel crashing like Telstra

seanpent      ( Date: 25-Apr-2017 16:02) Posted: however, assuming if Starhub becomes  an acquisition target of China Mobile ..... then it' s another story all together ..... seanpent      ( Date: 25-Apr-2017 10:01) Posted: but if Starhub show interest in M1 ..... it' s also possible that Starhub price may probably turn weaker ..... sometimes the fate of acquirer and acquiree can be very different .....

 

big corporate actions (if any) is always exciting ..... :)

 

however, assuming if Starhub becomes  an acquisition target of China Mobile ..... then it' s another story all together .....

seanpent      ( Date: 25-Apr-2017 10:01) Posted: but if Starhub show interest in M1 ..... it' s also possible that Starhub price may probably turn weaker ..... sometimes the fate of acquirer and acquiree can be very different ..... MarcPh      ( Date: 25-Apr-2017 09:44) Posted: A month ago, Starhub claims that they are not interested in M1. Temasek owns ST which controls ST Telemedia which owns > 50 of Starhub. Starhub and M1 have been sharing some network resources to reduce costs.  Temasek also controls Singtel. If competition from China Mobile leadership in M1 significantly threatens Singtel, will Starhub change her mind and swallow M1 as national service?

 

Once upon a time, Singtel attempted to buy HK Telecom from Cable & Wireless. If we had suceeded, it would be the biggest Asian telco, ex Japan.

We lost to Li Ka Shing' s son' s Pacific Century. Pacific Century was smarter and inflated her share prices to offer the British a stock & cash offer, and thereafter PCCW share value dropped over 90% within 3 years.

http://money.cnn.com/2000/02/29/asia/hk_telecom

 

but if Starhub show interest in M1 ..... it' s also possible that Starhub price may probably turn weaker .....

sometimes the fate of acquirer and acquiree can be very different .....

MarcPh      ( Date: 25-Apr-2017 09:44) Posted: A month ago, Starhub claims that they are not interested in M1. Temasek owns ST which controls ST Telemedia which owns > 50 of Starhub. Starhub and M1 have been sharing some network resources to reduce costs.  Temasek also controls Singtel. If competition from China Mobile leadership in M1 significantly threatens Singtel, will Starhub change her mind and swallow M1 as national service? seanpent      ( Date: 24-Apr-2017 14:45) Posted: Just an  assumption, if  China Mobile  were to  lose out on M1, there' s till Starhub to think about and consider ..... Hopefully, Starhub will benefit from any acquisition competition (if any) .....

 

A month ago, Starhub claims that they are not interested in M1. Temasek owns ST which controls ST Telemedia which owns > 50 of Starhub. Starhub and M1 have been sharing some network resources to reduce costs. 

Temasek also controls Singtel.

If competition from China Mobile leadership in M1 significantly threatens Singtel, will Starhub change her mind and swallow M1 as national service?

seanpent      ( Date: 24-Apr-2017 14:45) Posted: Just an  assumption, if  China Mobile  were to  lose out on M1, there' s till Starhub to think about and consider ..... Hopefully, Starhub will benefit from any acquisition competition (if any) .....

 

https://www.msn.com/en-sg/news/other/keppel-tandt-to-benefit-the-most-from-m1-stake-review/ar-BBytWpN

seanpent      ( Date: 24-Apr-2017 17:06) Posted: any sale of M1 likely to benefit KepT& T more than SPH ? seanpent      ( Date: 24-Apr-2017 16:45) Posted: Looks like M1 or Starhub can be utilised as  good chess pieces for the big players' strategic move .....

 

SPH has about 13-14% of M1 and < 1% of Starhub

Keppel controls about 19% of M1.
 

 

any sale of M1 likely to benefit KepT& T more than SPH ?

seanpent      ( Date: 24-Apr-2017 16:45) Posted: Looks like M1 or Starhub can be utilised as  good chess pieces for the big players' strategic move .....

 

Just my personal thoughts, if I am Singtel, I will either join TPG or swallow M1, not likely Starhub (due to pay-tv monopoly) or get myself dual-listed in NYSE to fetch better valuations.

 

Otherwise, global investors will just buy recent sold-down Telstra (8% yield based on 2016 dividends) for Asia-Pacific Telco exposure.

 

Looks like M1 or Starhub can be utilised as  good chess pieces for the big players' strategic move .....

 

 

 

TPG rocks mobile phone market

http://www.theaustralian.com.au/business/technology/tpg-rocks-mobile-phone-market/news-story/c988a150acb2a8cda5dba61a1cceb804

 

Australia -