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

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
OCBC Securities SGX Stock Analyst Report HOLD Maintain HOLD 3.69 Same 3.69
HOLD Maintain HOLD 4.26 Same 4.26
HOLD Maintain HOLD 2.79 Same 2.79