Month: January 2010
SingTel – BT
SingTel lowers cost of fibre connectivity for businesses
THE promise of cheaper business connectivity he-ralded by the upcoming Next Generation Nationwide Broadband Network (Next Gen NBN) appears to be materialising even before the landmark digital highway is ready.
Singapore Telecommunications yesterday launched its cheapest fibre optic-based network service for businesses – dubbed Meg@POP eLite – which offers symmetrical data transmission speeds of up to 100 Mbps.
The latest addition to SingTel’s existing suite of secure fibre-based services, it is aimed at businesses that run heavy-duty networking applications such as cloud computing services and high-definition video conferencing.
‘In the market today, businesses typically pay about $500 per month for a 10 Mbps copper connection to their private office network,’ said Chan Yim Leng, SingTel’s vice-president of business products. The new service provides up to 10 times the speed for around the same price, she said.
Besides targeting businesses, SingTel is also eyeing service providers which can leverage on Meg@POP eLite to offer services such as Web hosting to other businesses.
Market watchers expect the Next Gen NBN to lead to lower business connectivity prices in Singapore, as it heralds a level playing field where ownership of the network is separate from services that tap on the network.
As a result, it is also expected that prices of existing business connectivity services will be falling in the months ahead.
The all-fibre Next Gen NBN is expected to reach 60 per cent coverage of all residential premises and commercial buildings by year-end, and achieve 95 per cent coverage by 2012.
M1 – BT
M1 to test ‘4G’ in Feb
MOBILEONE (M1) is testing a so-called fourth-generation – or 4G – cellular technology known as Long Term Evolution (LTE), which promises mobile broadband speeds zippy enough to dispatch bandwidth-sapping high definition (HD) TV content to mobile device users.
The telco said yesterday that it will be conducting a two-month trial from next month, and the public can get to witness this technology’s power at M1’s flagship store in Paragon, where there will be showcases of HD TV streaming and high-speed Web surfing over LTE.
M1 is currently modernising its 2G network to prepare it for a smooth transition to LTE. In the process, the telco expects to slash its telecommunications networks carbon footprint by up to 35 per cent by early 2011. This will be possible due to the use of energy-efficient equipment from Nokia Siemens Networks, which will see action in the upcoming LTE trial.
‘Our network modernisation contract with Nokia Siemens Networks represented our first steps in our evolution to LTE,’ said M1 chief technical officer Patrick Scodeller. ‘The trial will help pave the way for faster and better quality mobile broadband services in the future.’
Demand for mobile broadband services has been soaring, sparked by bullish sales of Internet-savvy smartphones such as the iPhone and Android phones. This has fanned interest in next-generation cellular technologies like the LTE, which is expected to succeed the popular High Speed Packet Access (HSPA) technology.
The LTE market is expected to be huge. According to Juniper Research, LTE services will exceed US$70 billion globally by 2014.
Last November, SingTel said it will be conducting LTE trials across Singapore, Australia, Indonesia and the Philippines in the first half of this year. It will be partnering Australian subsidiary Optus, Indonesia’s Telkomsel and the Philippines’ Globe Telecom for the trials.
STEng – DBS
ST Engineering bids for Indian defence contracts worth US$3bn
At a press conference in New Delhi last week, ST Kinetics, the Land Systems subsidiary of ST Engineering, said that it has bid for five Indian defence contracts worth USD 3 billion and is keen to set up a manufacturing base in the country. The tenders comprise two artillery gun projects and a light strike
vehicle for the army and two carbine rifle projects for internal security. ST Kinetics will begin field trials for the Indian Army next month of its 155 mm Towed Howitzer, where it will compete against the Bofors guns. The company is also hopeful that the stalled trial of the 155 mm Pegasus Lightweight Howitzer (LWH) will also recommence very shortly.
While the original tenders were floated last year, the trials had been put on hold till now, following the arrest of an Indian official for corruption charges in May 2009 – which had resulted in the apparent “blacklisting” of seven defence firms including ST Kinetics as the CBI was investigating their role in the charges. Last month, the defence ministry allowed field trials involving these companies and now ST Kinetics has affirmed that they were never blacklisted by India. We view this as a positive development, as it now allows STE to participate in the Indian Army’s urgent armament upgrade plans. India is upgrading its largely Soviet-era arsenal to counter potential threats from Pakistan and China. The Indian army needs new weapons urgently as its last major acquisition of Bofors Howitzers, was way back in 1986.
Among the other tenders, ST Kinetics will also bid to supply the Bronco All Terrain Tracked Carrier for frontline defence and disaster relief applications. According to ST Kinetics’ management, if all five tenders STE have bid for come through, it will generate additional revenue of USD 3 billion over five years. The Company also hopes to rake in USD 1 billion from nondefence business in India over 3-5 years, mainly through selling specialty vehicles used in mining, excavation and road construction. This is in line with our belief that STE will continue to benefit from increased government spending on defence and infrastructure in the region. Thus, we maintain our positive view on STE’s orderbooks and revenues, going forward, and continue to expect double digit earnings growth rates over FY09-11. Maintain BUY, TP S$3.80.
SingTel – BT
SingTel’s Premier League update
SINGTEL yesterday released some details of its Barclays Premier League programming for next season but said that it was still in negotiations with various production houses for review and analysis shows.
A fans feedback programme, an analysis show and a preview show will be aired every week, with content produced in high-definition in Singapore studios by ‘respected’ hosts and pundits, SingTel said.
Selected fans will also get a chance every week to attend a football game in England and also be part of the mio TV crew in the stadiums there, with access to press facilities and interviews.
While SingTel has poached sports channel ESPN to its cable television platform from competitor StarHub, ESPN is ‘just one’ of the houses that SingTel has approached, Singapore CEO Allan Lew said yesterday. Negotiations are under way and will be concluded by May, he said.
All 380 matches of the football season will be broadcast, and there is an option for customers to receive live ‘streaming’ of matches through their mobile phones.
Mr Lew said that subscriptions to mio TV had increased 70 per cent since SingTel launched its sports subscription package last November. Updated subscription numbers will be released when SingTel reports its quarterly results next month.
Mr Lew said that the Infocomm Development Authority of Singapore was studying the possibility of allowing pay TV signals to be carried by co-axial cables within the home for home networking purposes.
SingTel caused a storm when it beat StarHub to the rights to broadcast the next three seasons of Barclays Premier League football in Singapore. Fans in Singapore complained of the inconvenience and cost of a different delivery platform.
StarHub yesterday said that it had secured exclusive rights to screen Brazilian league games in Singapore until 2011. Broadcast for the January to December season will begin this weekend.
SPH – DBS
Positioning for stronger pick-up
• 1Q10 net profit doubled to S$144.7m on property development, lower newsprint and investment
income; within expectations
• Ad revenues to gather momentum on activities ahead – IR, property launches, recruitment
• Overpayment for Clementi Mall is already priced in
• Upgrade to Buy, TP: S$4.33 (25% total return upside)
1Q10 earnings doubled, within expectations. SPH’s 1Q10 revenue grew by 4% yoy to S$354m driven by recognition of Sky@Eleven, but offset by a 2.5% drop from its Newspaper & Magazine operations. EBIT grew to S$164.7m (+24% yoy, +S$31.8m) contributed largely by property development’s EBIT at S$50.3m (+38% yoy, +S$14m) and lower newsprint chargeout costs at S$22.1m (-38% yoy, -S$13.6m). Net profit surged 98% yoy to S$144.7m largely due to the absence of a S$33.7m investment loss recorded in 1Q09, versus S$10.2m gain in 1Q10.
Ad revenue still down but expect improvement. Although total ad revenue dipped 3.1% yoy to S$182.4m in 1Q10, this was an improvement over 4Q09’s 18.4% yoy drop. Display ads growth turned positive at 2% yoy, not seen since 4Q08. We are now assuming a stronger growth for ad revenues (+8%, vs 4% previously) on expectations that ad revenues will be stronger sequentially on the opening of both IRs, pick up in property launches and employment market. As such, we revised our forecasts up by 3-6%.
Clementi Mall “hiccup” priced in. While we feel SPH has overpaid for Clementi Mall, the market has already priced that in after a knee-jerk reaction to its share price. A write-down in future is possible but impact should be minimal at c.6 Scents per share based on our estimates.
Upgrade to Buy, TP revised to S$4.33. We revised up our TP to S$4.33 (from S$4.00) factoring in higher earnings assumption and as we adjust our sum-of-parts valuation to factor in a potential write-down of Clementi Mall (S$95.9m or S$0.06/share) instead of a 5% discount. Dividend yield at an attractive 6.8% (based on our DPS forecast of 25 Scents) should provide a good support to share price.