Telco sector - OCBC Investment 2016-09-02: Three bids submitted for fourth license

STARHUB LTD CC3.SI SINGTEL Singapore Telecommunications Z74.SI M1 LIMITED B2F.SI

Telco sector - Three bids submitted for fourth license

IDA has received three bids for the fourth mobile phone operator license, namely MyRepublic, recently incorporated company named AirYotta and Australian telco TPG Telecom.
OMGTel, however, did not submit its bid, as the market had expected.

AirYotta is led by CEO, Michael DeNoma, and CTO, Philip Heah, both previously from OMGTel. According to Edge Singapore, AirYotta is backed by a regulated, fully-financed fund, which is supported by a single investor.
IDA will announce the winning bid by mid-Oct 16 and had said previously it would consider applicants’ track records among many other criteria before allowing their participation in the upcoming spectrum auction.
If in the event IDA does award the license to a fourth operator, our view remains that Singtel [HOLD; FV: S$4.26] will be the least impacted among the three incumbents on the back of diversified revenue base and established enterprise business.
Impact on Starhub [HOLD; FV: S$3.69] will be partly mitigated by its enterprise business and TV bundling options, while M1 [HOLD; FV: S$2.79] will likely be most impacted given the lack of such business segments.
All said, we believe until IDA announces the result of the bid, it is premature to make any conclusion.

Eugene Chua OCBC Investment | http://www.ocbcresearch.com/ 2016-09-02

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