Earnings slump in 2Q reveals telcos are biting off each other’s pies

See who is biting off more than the others.

Last quarter’s lines were pretty muted with weaker revenues and earnings for SingTel and StarHub, reporting 2% and 6% declines respectively.

Newcomer M1, however, is a different story. The underdog saw a 12% jump on the back of low pricing, one of its techniques to snatch market share away from the incumbents.

A report by OCBC Investment Research says that one main reason for the lower profitability is likely due to the still intense competition in the fiber broadband market.

OCBC adds that SingTel and Starhub are trimming their FY guidance. SingTel now expects core revenue to remain stable but cuts EBITDA growth guidance from single-digit previously to stable; StarHub now expects stable revenue versus low single-digit growth previously, but keeps 32% service EBITDA margin. Only M1 has kept its FY14 guidance unchanged.

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