SingTel – CIMB

SingTel wins media rights to UEFA for 2009-12

SingTel announced on 20 Mar 08 that it had been awarded exclusive media rights to the UEFA Champions League and UEFA Cup for 2009-12. These are exclusive rights across the mobile, Internet and mio TV platforms.

The UEFA Champions League is currently made available to Singapore sports fans via ESPN and STAR Sports, packaged by ESPN STAR Sports. ESPN and STAR Sports are sports channels under StarHub’s pay-TV services.

Strategically positive for mio TV but no significant bottom-line impact. We view this win as strategically important for mio TV’s long-term prospects but do not see material near-term earnings benefits for SingTel. The win should help increase takeup rates for SingTel’s mio TV which currently has around 27,000 subscribers vs. StarHub’s estimated 500,000 subscribers. However, we believe SingTel went in with a clear objective of outbidding its competitors and it remains to be seen how the win would benefit its bottom line.

Valuation and recommendation
Maintain Outperform and sum-of-the-parts target price of S$4.45. We continue to like SingTel for its highly liquid exposure to reliable earnings growth from regional associates and decent yield of 4%. Key catalysts could include news flow on its bids for Vietnamese telco assets in 2H08.

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