Daiwa Capital Markets says the concessions made by the Infocomm Development Authority’s (IDA) for new telcos to enter the market are minor.
IDA is setting aside 60 MHz of spectrum to facilitate the market entry of a new player for a reserve price of $40 million, substantially less than what the incumbent operators may have to pay. Other concessions include wholesale access for voice and data at rates lower than retail prices.
“Notably, IDA has not softened on either the rollout obligations or accepting some of the proposal - RAN sharing and national roaming - made by aspiring new entrant during consultation phase,” say analysts Ramakrishna Maruvada and Jame Osman in a July 7 flash report.
They believe new entrants will still need to commit to substantial network investments to meet rollout obligations.
Daiwa has maintained a “Neutral” rating for Singapore Telecom Sector.
Meanwhile, the house remains pessimistic about the existing telcos, saying that spectrum fees are likely to go up for all three of them.
It has a “Neutral” call on the sector.
SingTel has expertise using a 700 MHz band in Australia. IDA’s decision to auction spectrum in this band could help SingTel improve its economies of scale.
Daiwa is maintaining a “Hold” rating for the company with a target price of $4.27.
SingTel and M1 together hold five spectrum lots, but they will have to share three lots if a new entrant shows up. Most likely M1 will get the shorter end of the stick, say Daiwa's analysts, given its smaller balance sheet.
The house is maintaining a “Hold” rating with a target price of $3.21 for M1.
StarHub has an “Underperform” rating with a target price of $3.95, as the analysts believe talks of new entrant threats and a rise in domestic bond yields have likely contributed to the muted share-price performances.
“Shares are trading at 2015E PERs of 15.6-17.6x, still do not appear compelling relative to the moderate earnings prospects that we forecast,” say Maruvada and Osman.
SingTel, StarHub and M1 are up at $4.36, $4.01 and $3.31 respectively.
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IDA is setting aside 60 MHz of spectrum to facilitate the market entry of a new player for a reserve price of $40 million, substantially less than what the incumbent operators may have to pay. Other concessions include wholesale access for voice and data at rates lower than retail prices.
“Notably, IDA has not softened on either the rollout obligations or accepting some of the proposal - RAN sharing and national roaming - made by aspiring new entrant during consultation phase,” say analysts Ramakrishna Maruvada and Jame Osman in a July 7 flash report.
They believe new entrants will still need to commit to substantial network investments to meet rollout obligations.
Daiwa has maintained a “Neutral” rating for Singapore Telecom Sector.
Meanwhile, the house remains pessimistic about the existing telcos, saying that spectrum fees are likely to go up for all three of them.
It has a “Neutral” call on the sector.
SingTel has expertise using a 700 MHz band in Australia. IDA’s decision to auction spectrum in this band could help SingTel improve its economies of scale.
Daiwa is maintaining a “Hold” rating for the company with a target price of $4.27.
SingTel and M1 together hold five spectrum lots, but they will have to share three lots if a new entrant shows up. Most likely M1 will get the shorter end of the stick, say Daiwa's analysts, given its smaller balance sheet.
The house is maintaining a “Hold” rating with a target price of $3.21 for M1.
StarHub has an “Underperform” rating with a target price of $3.95, as the analysts believe talks of new entrant threats and a rise in domestic bond yields have likely contributed to the muted share-price performances.
“Shares are trading at 2015E PERs of 15.6-17.6x, still do not appear compelling relative to the moderate earnings prospects that we forecast,” say Maruvada and Osman.
SingTel, StarHub and M1 are up at $4.36, $4.01 and $3.31 respectively.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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