Here's the real score in telecom's Big Three

Looks like SingTel and M1 are losing to Starhub.

According to Nomura, all three telcos recently reported 2QCY12 results, but StarHub was the only bright spark. Going forward, SingTel and StarHub have mostly kept their previous guidance of stable outlook, along with possible margin pressures in 2HCY12; but M1 has not reiterate its “stable” top and bottom-line statement. Nevertheless, thanks to their strong cashflow-generative businesses, the telcos have kept their dividend payout guidance.

Here's more from Nomura:

With the exception of StarHub (+23%), the other two stocks have underperformed (M1 +3%, SingTel +7%) versus the STI’s 14% gain YTD. But with markets likely to remain volatile, we believe that the telcos’ defensive earnings and still-attractive yields offer a safe harbour for the less risk-adverse investors.

Both M1 and SingTel turned in quarterly results that were somewhat disappointing. For M1, it attributed the softer showing to accounting treatment for a popular Android phone (where subsidies are expensed upfront), while SingTel cited weaker forex rates (affecting Optus and regional associates) as reason behind for its muted showing.

For the post-paid mobile market, there was no change to status quo – SingTel continues to dominate with a ~48% share, followed by StarHub with ~28% and M1 ~26%. Overall, the post-paid subscriber base here grew by 58k to 4125k, led by SingTel (+45k). We note that some 70% of new signups now take up smartphones, and data as a percentage of ARPU – currently around 37-42% - could increase further.

SingTel and StarHub have guided for a stable outlook ahead, although their EBITDA margin outlook continues to be fairly muted; this probably due to rising content cost for their Pay TV businesses. On the other hand, M1 has not reiterated its “stable performance at both top and bottom-line guidance”, given the continued strong interest in Android phones (also possibly expecting higher subsidies for another new iPhone, which should also affect both SingTel and StarHub). Nation-wide LTE roll-out is also on the cards for all three but it remains at best a 2013 story (largely dependent on availability of LTE handsets).

Again, StarHub has continued to do well (+23% YTD), while SingTel (+7%) and M1 (+3%) have continued to lag the STI’s 14% gain. But with markets likely to remain volatile, we believe that the telcos’ defensive earnings and still-attractive yields offer a safe harbour for the less risk-adverse investors.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia