Based on personal view, I still favour the Asian telecoms industry, given low economic sensitivity, continued growth in emerging and certain developed markets, and healthy finances. The future for mature telecoms markets is quad-play strategy. In less developed countries, it is better to service the different parts of the telecoms market individually. I believe the best time for restructuring has passed, due to depressed mobile tariffs and the lack of a pro-competition environment (China). Wireless operators’ earnings should rebound from here, driven by lower capex, ARPU improvements and cost-cutting (Korea). Somehow, I saw Singapore as an ideal market for fibre-to-thepremises; an FTTP-based NBN project can yield high positive NPV (Singapore).
Rough Asia-Pacific Telecoms round-up - again I still favour the Asian telecoms sector, given low economic sensitivity, growth not only in emerging markets but also in developed markets like Hong Kong and Singapore, and strong finances. I am recommending a telecoms bucket that reflects the sector’s attractions. This originally included SK Telecom, Taiwan Mobile, PCCW, DiGi, Telekom Malaysia, SingTel and StarHub. Also, may be DTAC in Thailand. I think DTAC has a good chance of winning a 3G licence by mid-2009; it is performing well operationally, and should deliver strong profit growth this year (ref. to their performance)
For China’s restructuring and other developments - current key story so far in 2Q is the announcement of the long-awaited restructuring of China’s telecoms market. I see this as too little, too late; and it will be very hard to reverse China Mobile’s huge market dominance. In Southeast Asia, I have saw forecasts for Telekom Malaysia, the new pure fixed-line operator, plus reports on TM International, the new pure mobile operator.
Anyway...what next?
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