Month: November 2010
TELCOs – BT
Telcos may have to disclose actual broadband speeds
IDA is also proposing they not be allowed to block legitimate content and services
CONSUMERS could get a better idea of the real Internet broadband speeds they are paying for, instead of the maximum speeds advertised by service providers.
The Infocomm Development Authority of Singapore (IDA) issued a consultation paper yesterday seeking feedback on new policy recommendations it plans to put in place. And one recommendation is a new requirement for telcos to disclose real or average speeds consumers can expect with their broadband plans. While telcos typically advertise theoretical maximum speeds, these are rarely achievable due to various factors such as network congestion and peak consumer traffic times.
IDA said it aims to improve transparency so consumers can make informed choices about Internet services. The regulator also said: ‘(The recommendations) seek to protect consumer interests by ensuring that fierce competition in the market does not lead to Internet service providers (ISPs) or telecom network operators degrading the Internet access service quality to end-users, in their bid to compete on price or to lower cost.’
Telcos are also not to block legitimate content and services, said IDA. For example, they will not be able to block voice over Internet protocol (VoIP) applications such as Skype, which might cannibalise their voice revenues.
IDA is, however, allowing ISPs to throttle or slow down such services to manage service-level quality across their users, but they must disclose any such moves to consumers. ISPs are also allowed to provide premium-tier services – for example, a dedicated line for streaming video or other such bandwidth-intensive applications.
Once finalised, the recommendations will be made either as part of a directive to telcos here or included in legislation. IDA has not spelled out how prominently service providers will have to disclose their quality of service (QoS) levels.
The new policies will likely cover mobile broadband providers as well as the new players that will accompany the debut of the Next Generation Nationwide Broadband Network.
IDA already monitors fixed-line broadband QoS service levels and has a minimum set of availability and latency requirements for telcos to meet.
SingTel and StarHub said they will review the consultation paper and submit responses. The closing date for views and comments to be submitted to IDA is Dec 16.
SBSTransit – BT
SBS Transit Q3 profit up 20.4% to $12.7m
HIGHER bus and train ridership helped lift SBS Transit (SBST)’s net profit 20.4 per cent to $12.7 million for the third quarter ended Sept 30.
Revenue climbed 6 per cent year on year to $184.9 million, mainly on stronger bus and rail takings and higher advertisement earnings.
Operating expenses were 4.1 per cent higher at $169.1 million, mainly due to higher premises costs, higher fuel and electricity costs, higher depreciation expenses and higher other operating expenses. These were partly offset by lower repairs and maintenance costs.
Premises costs jumped 32.6 per cent to $9.3 million because of higher maintenance, including security fencing costs and the absence of Budget rebates from the government, while fuel and electricity cost 7 per cent more at $33.1 million.
Tax spiked 97.8 per cent to $3.1 million, due to certain receipts in the previous corresponding quarter being tax-exempt, as well as higher profits in the latest Q3.
Earnings per share increased to 4.14 cents, from 3.44 cents in Q3 last year.
SBST operates Singapore’s biggest public bus network, as well as a smaller rail network.
It said that Q3 revenue from bus operations rose 2.9 per cent to $140.2 million, mainly on a 5.7 per cent rise in average daily ridership compared with the same period last year.
Operating profit jumped 91.4 per cent to $3 million, mainly on higher bus fare revenue and lower repair and maintenance costs, although these were partly offset by hikes in premises costs, depreciations expense and other operating expenses.
Q3 rail revenue increased 13 per cent to $30.9 million as average daily ridership for the North-East Line rose 20 per cent, and that for the two light-rail transit systems went up 15.5 per cent. Operating profit improved 14.1 per cent to $4.1 million due to higher rail fare revenue.
But this was weighed down by higher electricity and staff costs, along with higher repair and maintenance costs.
Revenue from the advertisement business rose 42.2 per cent to $10.2 million, with operating profit 42.6 per cent higher at $6.1 million, mainly on higher bus advertisement revenue.
For the first nine months of the year, SBST’s net profit rose 2.6 per cent to $44 million, while revenue was 3.2 per cent higher at $539.3 million. Earnings per share for the nine months stood at 14.3 cents, up from 13.9 cents previously.
No dividend has been proposed. SBST’s stock closed one cent higher at $1.93 yesterday.
HLFin – Lim and Tan
• HLF’s performance in Q3 continues to disappoint: net profit fell 22% to $25.385 mln, a sharp contrast from the banks.
• While the contraction of the car hire purchase business is a “reasonable” excuse, HLF’s push into SME sector has clearly not yielded any results.
• Loans & Advances, at $6103.53 mln at end Sept’10, are still lower than $6136.99 mln at end’09, which was down sharply from $7412.92 mln at end 2008. And net interest Income dropped 15% to $47.40 mln.
• Assuming unchanged final dividend of 6 cents, full year total will be 10 cents, giving a yield of 3.2%.
• While trading at 0.89x book of $3.46, investors would be better off switching to bank stocks.
• We maintain HLF may be worth a look again at $2.70-2.80.
SingTel – Lim and Tan
• Net profit fell 6.7% in Q2 ended Sept’10 to $892 mln, as the decline in associates contributions (largely financing costs relating to the mega African acquisition by 32% owned Bharti of India) could not be offset by better performance in Singapore and Australia (benefitting from a strong A$).
• There will likely be some disappointment, but not likely, in our opinion, to be severe.
• Fact is, investors have not, for some time now, reacted too enthusiastically to the past rosy contributions from associates, as more came to realize the greater significance of cash flow from these associates than share of their accounting profits.
• Likely to pacify shareholders, management has raised the dividend policy to 55-70% of underlying profit from 45-60% previously.
• Interim dividend has therefore been raised by almost 10% to 6.8 cents per share, representing 59% of $1.834 bln underlying profit for the first half). Assuming unchanged final of 8 cents, that’s a 4.6% yield, thus qualifying Sing Tel as a quasi-bond.
• Boring is still likely the most appropriate description for Sing Tel. We are therefore maintaining HOLD / LONG TERM BUY call.
SingTel – BT
Bharti Q2 profit falls 26.6%
Bharti Airtel’s profit slid in the latest quarter as India’s largest mobile phone company lost market share and cut call rates amid hyper-competition in its fast-growing home market.
Net profit for the July- September quarter was 16.6 billion rupees (S$482.2 million), down 26.6 per cent from a year earlier, the company said yesterday.
Revenue grew 47 per cent from the year before to 152.2 billion rupees, including 38.9 billion rupees from its first full quarter of operations in Africa. India and South Asia revenue grew 9.2 per cent.
Bharti’s market share in India slid to 20.8 per cent from 23.4 per cent a year earlier, and rates per minute dropped 21 per cent to 0.44 rupees.
A poll of analysts by Thomson Reuters had forecast net profit of 16.7 billion rupees and revenue of 151.6 billion rupees.
Bharti said it plans to start rolling out high-speed 3G services in India this quarter. — AP