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Asia-Pacific Telecoms
News to the node
Thought of the week
DiGi’s 3Q results gave evidence that mobile operators can drive data revenue
growth and boost EBITDA margins simultaneously. We find this encouraging
when data traffic is expanding and smartphones are increasingly the device of
choice. Often we see smartphones causing short-term margin compression,
but DiGi has been able to limit handset subsidies and to control volumes of
bundled data. Competitive dynamics are also an important part of the mix. As
DiGi users consume more data, they either have to upgrade their plans or pay
for additional usage at similar speeds, or they can expect to be throttled back
to slow speeds. This appears to be supporting sales, margins, and service
quality. The competitors either cut users off or shock them with giant bills.
Latest Research
Malaysian telecoms: Prem upgraded DiGi.com to Outperform as 3Q11
results continued to show strong execution on DiGi’s data strategy, while cost
savings helped drive record EBITDA margins. Dividend yields are also set to
rise. Prem also took a fresh look at Time dotCom and although delays in node
fiberisation are bad for growth and good for margins, he notes the market is
valuing TDC’s core earnings at an undemanding 8x FY12E PER and 3.5x
EV/EBITDA despite an estimated core earnings CAGR of 17%. Also, Maxis
said it signed an agreement with the fourth mobile operator, u-Mobile
(unlisted) to share Maxis’s 3G radio access network. We view this news as
incrementally positive for Maxis but believe it is unlikely to have a significant
bearing on earnings.
Japanese 2Q results starting well: At both KDDI and subsidiary Okinawa
Cellular we saw a pickup of smartphone sales, which is supporting data
ARPU growth. Both have also started selling the iPhone4S (their first Apple
product) this month. Smartphone growth is putting pressure on short-term
margins, but we expect it can result in better long-term sales and profits.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Asia-Pacific Telecoms
News to the node
Thought of the week
DiGi’s 3Q results gave evidence that mobile operators can drive data revenue
growth and boost EBITDA margins simultaneously. We find this encouraging
when data traffic is expanding and smartphones are increasingly the device of
choice. Often we see smartphones causing short-term margin compression,
but DiGi has been able to limit handset subsidies and to control volumes of
bundled data. Competitive dynamics are also an important part of the mix. As
DiGi users consume more data, they either have to upgrade their plans or pay
for additional usage at similar speeds, or they can expect to be throttled back
to slow speeds. This appears to be supporting sales, margins, and service
quality. The competitors either cut users off or shock them with giant bills.
Latest Research
Malaysian telecoms: Prem upgraded DiGi.com to Outperform as 3Q11
results continued to show strong execution on DiGi’s data strategy, while cost
savings helped drive record EBITDA margins. Dividend yields are also set to
rise. Prem also took a fresh look at Time dotCom and although delays in node
fiberisation are bad for growth and good for margins, he notes the market is
valuing TDC’s core earnings at an undemanding 8x FY12E PER and 3.5x
EV/EBITDA despite an estimated core earnings CAGR of 17%. Also, Maxis
said it signed an agreement with the fourth mobile operator, u-Mobile
(unlisted) to share Maxis’s 3G radio access network. We view this news as
incrementally positive for Maxis but believe it is unlikely to have a significant
bearing on earnings.
Japanese 2Q results starting well: At both KDDI and subsidiary Okinawa
Cellular we saw a pickup of smartphone sales, which is supporting data
ARPU growth. Both have also started selling the iPhone4S (their first Apple
product) this month. Smartphone growth is putting pressure on short-term
margins, but we expect it can result in better long-term sales and profits.
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