TELCOs – BT
SingTel, StarHub to double mobile broadband speeds by this year
SINGAPORE Telecom and StarHub aim to upgrade their cellular networks to double mobile data broadband speeds by the end of this year. This will allow users to surf the Web and download applications on their handphones at speeds of up to 42.2 Mbps (megabits per second) – twice as fast as the current 21.1 Mbps limit.
SingTel expects to complete its upgrade by the second half of this year, while StarHub said its network will be ready by the third quarter. Neither company has disclosed the cost of the upgrade.
When contacted, MobileOne said it will be ready for 42.2 Mbps by this quarter.
Although the speed boost can be achieved this year, SingTel’s executive vice-president for consumer business Yuan Kuan Moon said ‘it will take a while for devices to catch up’.
Most smart phones and mobile broadband dongles available today support download speeds of only 7.2Mbps to 14.4Mbps.
‘We are talking to all the major (handset) providers,’ Mr Yuan told reporters at a media briefing.
Swedish telecom equipment maker Ericsson clinched the upgrading contract with SingTel, while StarHub chose to go with China’s Huawei.
Besides the ongoing improvements, both operators said yesterday they are also embarking on local technical trials of another technology called Long Term Evolution (LTE). MobileOne launched a similar trial in January this year and it expects its LTE network to be ready in 2011.
LTE is considered by pundits to be the obvious successor to existing third-generation cellular technology. It will allow telcos to offer mobile broadband speeds of 100Mbps or more – a feat that rivals the fastest fixed-line broadband speeds available in Singapore today.
In Europe, Swedish operator Telia has already started on this upgrade, while NTT Docomo plans to launch its LTE network in Japan by the end of the year.
‘While we are committed to LTE for the future growth of our network, the upgrade of our existing HSPA+ network to 42Mbps DC (dual-carrier) is relatively straightforward and will provide peak data rates for our customers comparable to that which can be achieved with current LTE technologies,’ a StarHub spokeswoman said.
SingPost – EPS vs DPS
Data for EPS, DPS and Payout Ratio
|
EPS (ct) |
DPS (ct) |
Payout |
|||||||||
|
Q1 |
Q2 |
Q3 |
Q4 |
Total |
Q1 |
Q2 |
Q3 |
Q4 |
Total |
||
|
FY10 |
2.045 |
2.104 |
2.291 |
? |
? |
1.25 |
1.25 |
1.25 |
? |
? |
? |
|
FY09 |
2.051 |
1.943 |
1.899 |
1.834 |
7.726 |
1.25 |
1.25 |
1.25 |
2.50 |
6.25 |
80.90% |
|
FY08 |
1.998 |
2.065 |
1.914 |
1.793 |
7.766 |
1.25 |
1.25 |
1.25 |
2.50 |
6.25 |
80.48% |
|
FY07 |
1.610 |
1.888 |
1.780 |
2.100 |
7.290 |
1.25 |
1.25 |
1.25 |
2.50 |
6.25 |
85.73% |
|
FY06 |
1.540 |
1.580 |
1.720 |
1.620 |
6.460 |
1.25 |
1.25 |
1.25 |
1.75 |
5.50 |
85.14% |
Note : FY is End-March
Observation
– EPS had been on an uptrend since Q409 ie. 3 consecutive quarters
– Payout Ratio is around 80% for the past two years
SPH – EPS vs DPS
Data for EPS, DPS and Payout Ratio
|
EPS (ct) |
DPS (ct) |
Payout |
|||||||
|
Q1 |
Q2 |
Q3 |
Q4 |
Total |
1H |
2H |
Total |
||
|
FY10 |
9 |
? |
? |
||||||
|
FY09 |
5 |
5 |
8 |
8 |
26 |
7 |
18 |
25 |
96.2% |
|
FY08 |
7 |
6 |
8 |
6 |
27 |
8 |
19 |
27 |
100.0% |
|
FY07 |
7 |
7 |
10 |
8 |
32 |
7 |
19 |
26 |
81.3% |
|
FY06 |
6 |
5 |
11 |
5 |
27 |
7 |
17 |
24 |
88.9% |
Note : FY is End-Aug
Observation
– 1H DPS is 7ct or 8ct for the past 4 years
– Q110 EPS is the highest for the past 5 years
SMRT – Lim and Tan
New Milestone
• The stock hit an intraday high of $2.02 yesterday, before ending below the $2.00 resistance, that being the record closing high and first reached in May '07.
• The April 17th opening of 11 more Circle Line stations (Stages 1&2 / Dhoby Ghaut to Tai Seng) could be a factor, although that's been known for a while now.
• Stages 4 & 5 (12 stations / Caldecott to Harbourfront are scheduled for completion in 2011.
• Other contributing factors behind SMRT's performance include:
– Singapore's continued population growth, now passing 5 mln.
– Strong recovery of tourist arrivals, with 2010 likely to surpass 2007's 10.3 mln peak.
– Continued growth in train ridership (hitting a record high of 47.25 mln in Dec '09), especially relative to bus, which has stagnated, and which explains SMRT outperforming Comfort Delgro, which remains stuck in the $1.50-1.70 range, and despite being the "favorite" of many to be appointed the operator of the new Downtown Line (40 km / 33 stations), scheduled for completion in 2016.
– The refurbishment of the Esplanade Exchange is expected to result in 2000 sq meters of additional rentable space. (Rental income is an increasingly important contributor to SMRT's bottom-line. As at end Dec '09, retail space totaled 29,028 sq meters, vs 23,501 sm three years ago.)
– Likely fare increase when PTC next conducts its annual review in July.
• SMRT is expected to release results for fiscal year ended Mar '10 around Apr 23rd. Final dividend will be no less than 6 cents after the 1.75 cents interim, which would make this the third consecutive year SMRT is paying 7.75 cents per share. At $1.99, yield is still a "decent" 3.9%.
• We are keeping our BUY call. Trailing PE is 16.9x. (Profit for 9 months ended Dec '09 of $140.23 mln was up 13% over the same period the year before.)
SingTel – BT
SingTel's BPL bid cast in a different light
SINGTEL'S BPL (Barclays Premier League) victory is widely seen as the goal it needed to start challenging incumbent StarHub. While that is undoubtedly true for the short term, the ultimate aim behind its willingness to pay top dollar could lie in forcing the policy change that will tilt the balance of pay-TV power in the long run.
And things couldn't have worked out better for SingTel when the government last Friday finally reversed its long-standing position of non-intervention when it comes to pay-TV content.
While the authorities did not prohibit the signing of exclusive contracts, what they did do was to kill off the impetus for signing such agreements in the first place.
A draconian ban would seem far too interventionist under free- market rules, so authorities opted for a softer 'cross-carriage' approach. However, the intention is the same: avoid the bruising bidding war that led to the dramatic escalation of pay-TV prices in recent years.
This could be the exact outcome SingTel was gunning for when it shelled out a reported US$400 million to land the BPL, the crown jewel of StarHub's sports programming for the last decade. The exact price tag for the 2010-2013 BPL broadcast rights remains a closely guarded trade secret but the red camp's bid must have been a lot higher than StarHub's for Premier League officials to make a snap decision without the usual practice of lengthy deliberations.
At that time, market analysts questioned the business sense in SingTel's bidding strategy, while consumers were up in arms over the need to pay for a separate mio TV subscription on top of a StarHub one to watch BPL matches.
However, if SingTel were any less aggressive with its bid, the pay-TV regulatory landscape would likely have maintained status quo in the near term.
In 2006, SingTel tried unsuccessfully to secure BPL rights when preparing its foray into the pay-TV market.
The operator subsequently appealed to the Media Development Authority of Singapore (MDA) to ban exclusive content on the grounds that it was anti-competitive, but the authorities chose not to interfere in such commercial decisions.
The status quo is detrimental to SingTel's pay-TV ambitions in many ways. For years, StarHub has managed to lock in a stable of prized content such as its popular TVB drama serials, AXN and Star World through exclusive agreements, leaving SingTel with little room to manoeuvre in terms of content acquisition. And content providers will also continue to lean towards the incumbent as it has a larger pool of subscribers and therefore can afford to pay more for their programmes.
However, the unwavering stance of non-interference returned to confront MDA when SingTel scored the BPL with an extremely aggressive bid the second time around. Beyond the stated goal of scoring more pay-TV customers, the victory may have also driven home to all the point that being held ransom to exclusive content is detrimental to both industry players and consumers alike.
And while MDA initially refused to budge despite consumer uproar, the impasse over the 2010 FIFA World Cup broadcast rights may have been the straw that busted the camel's back.
This change in policy vindicates SingTel's failed appeal in 2006. In addition, the company also stands to gain the most from the new cross-carriage mandate by a sheer stroke of timing.
The new rule is not being applied retrospectively, meaning SingTel gets to keep its 2010-2013 BPL rights to itself.
Content agreements are getting shorter as the pay-TV industry is undergoing rapid change, so no one wants to be locked into a long-term contract.
The three-year tenure makes SingTel's BPL agreement one of the longest in local pay-TV circles today. With the new rule in place, SingTel can now bid for any content in StarHub's cable TV arsenal once their current exclusivity period runs out, and this timeframe is likely to be under three years.
With StarHub still the market leader (notwithstanding the loss of most of the sports channels), there is definitely more content to poach from the green camp than the other way around. In other words, SingTel can unlock StarHub's content faster than the green camp can reclaim its BPL crown.
All other things being equal, the BPL could be the crucial swing vote in many households. This is because with the new ruling, SingTel's mio TV set-top box can now be used to access both the BPL as well as programmes that were once restricted to StarHub's cable TV platform.
Although the new rule does allow M1 to throw its hat into the pay-TV ring, it will still take some time for Singapore's smallest operator to get acquainted with a new line of business. SingTel, on the other hand, has had more than three years to get its mio TV machinery up and running.
The devil is usually in the details and in trying to foster fairer competition, regulators should consider the implications for current players, especially StarHub, when enforcing the new policy.
As for SingTel, it may just have shown there was indeed much method behind the madness of its all-out BPL offensive.