SingTel

[Raks]

Singtel is actually a good case study on what not to do for an investor.

Valuation  and business.

IPO valuation. I don't know but base on the earliest number for singtel investor website ( think 2002-2003) would say it was very rich.

Business. From sole provider of fixed line/ mobile line to the current 3 or more. ROE keep dropping. And a way of looking at the business is ask a 50 year old guy. Have you pay more for your bill in your lifetime? Singtel IPO at the time where only the rich own the giant mobile phone and now everyone has at least one and how many pay more for their bill?

This is simple. Really.

While Singtel does not rely on Singapore only, Singtel certainly isn't benefiting from any obvious favoritism in its home ground (I do not know if that "peanut" fine for data breach is the norm).

Another issue is how many telcos will there be in Singapore? Govs need to balance between price competitive (more licenses) & profitability of the major players (ideally to encourage improvements). 

Anyhow, I like Singtel's SEA reach in AIS (Thai), Telkomsel (Indonesia), and GLO (Philippines); all with major market share. Singtel and these telcos can stay uninteresting and generate cash. 

With cash comes startup/ investments in startups/ acquisitions. 
The remaining questions would be whether Singtel knows how to best create synergistic product offerings. As a consumer: I remember canceling "value-added" services that I didn't know I subscribed; I do not know why I've never tried Dash by Singtel.

Grab-Singtel digital banking license would be a very interesting beginning.

My favourite subsidiary of Singtel is NCS that was formerly a government body. So there may or not may be biasness in awarding it contracts.

Dont forget Singtel too has a wide base of corporate customers who will stick to Singtel 4G plans for their corporate use even though there are cheaper telecos like Circles or even M1. Therefore, imo, there is quite a big loyal base of customers

<Have to answer cryptically to avoid any potential lawsuit>

https://www.businesstimes.com.sg/compani...closed-sum

Immediately NCS is on news!

I've been following 2359 and wondering when will it get acquired for years. 2359 has grown from creating mobile friendly ("mobile first") sites to the overall digital solution provider (mobile, cloud, block chain...) currently.  

2359 value proposition should complement well with NCS/Singtel. With 5G coming in, 2359 has a lot of opportunity in some of my fav markets - Vietnam and Indonesia. NCS would also open doors for 2359. 

Before acquisition 2359 was nimble and pragmatic. They did all that's practical to survive as a start up and subsequently thrived as a go-to, top digital consultant in its niche. 

Hopefully the claim that singtel (ncs?) being too rigid is not true. Some of the "failed" consumer facing projects were me-too to existing offerings. Dash - probably wrong timing. 
Anyhow, unlike a new project or startup, 2359 is established.

[¯|_(ツ)_/¯]

SingTel - half year ended 30 September 2020 on 12 November 2020, before the start of trading
https://links.sgx.com/1.0.0/corporate-an...bdb05042cc


Stay home and stay safe, everyone.

[¯|_(ツ)_/¯]

SingTel - Optus A$250m acquisition of largest Mobile Virtual Network Operator MVNO
- will keep amaysim branding in tact
 
In parallel, Optus will launch a digital apps - Gomo 
to continue to compete with amaysim

I know I know.
It's complicated.

Just take note that SingTel is definitely is growing faster and faster.
A large amount of capital will be needed to sustain it's growth.



Stay home and stay safe, everyone.

[¯|_(ツ)_/¯]

SingTel - dispute
Notice of Arbitration from the Ministry of Digital Economy and Society (the “Ministry”), regarding a dispute over the Thaicom 5 satellite. The Ministry has made the following demands:

The Company and Thaicom Public Company Limited (“THAICOM”) have to build a replacement satellite for Thaicom 5 and hand it over to the Ministry. If a replacement is not built and launched, the Company and THAICOM must make the following payments to the Ministry: 
(i) the equivalent value of the satellite, currently 7,790,097,900 baht, plus 7.5% interest per annum from 30 October 2020;
(ii) a fine of 4,980,000 baht (calculated from 25 February 2020 to 30 October 2020) with 7.5% interest per annum from 30 October 2020 if it is not paid; and 
(iii) a daily fine from 1 November 2020 until the replacement satellite is handed over or the compensation is paid. 

The Company would also like to inform you that the dispute settlement process has just commenced and it is waiting for the case to be accepted. The Company is preparing a statement of defense but has not yet appointed an arbitrator. Therefore, the Company has no obligation to comply with any of the Ministry’s demands until an arbitral award has been rendered.
https://links.sgx.com/FileOpen/NR-202011...eID=638322

Stay home and stay safe, everyone.

[¯|_(ツ)_/¯]

SingTel 1H2020 Result as at 30 Sep 2020
Rev $7.4b (vs $8.2b)
GP  $1.9b (vs $2.3b)
NP  $0.4b (vs -$0.1b)
Div 5.1cts (vs 6.8cts)

Contingent Liability


Australia
In 2016 and 2017, Singapore Telecom Australia Investments Pty Limited ("STAI") received amended assessments from the Australian Taxation Office ("ATO") in connection with the acquisition financing of Optus. The assessments comprised of primary tax of A$268 million, interest of A$58 million and penalties of A$67 million. STAI's holding company, Singtel Australia Investment Ltd, would be entitled to refund of withholding tax estimated at A$89 million. STAI’s objections to the amended assessments were disallowed by the ATO on 27 September 2019. Based on legal advice, STAI has appealed the ATO’s objection decisions in the Federal Court of Australia on 11 November 2019. In accordance with the ATO administrative practice, STAI paid a minimum amount of 50% of the assessed primary tax on 21 November 2016. This payment continued to be recognised as a receivable as at 30 September 2020.

India
On 4 July 2019, the Telecom Disputes Settlement and Appellate Tribunal (“TDSAT”) in a similar matter of another unrelated telecom service provider, passed an order providing partial relief and confirming the basis for the balance of the one time spectrum charge. The said telecom service provider filed an appeal in the Hon’ble Supreme Court of India which was dismissed on 16 March 2020. With the ruling, Airtel Group has assessed and provided Rs. 18.08 billion (S$336 million) of the principal demand as well as the related interest. Notwithstanding this, Airtel Group intends to continue to pursue its legal remedies.

Other taxes, custom duties and demands under adjudication, appeal or disputes and related interest for some disputes as at 30 September 2020 amounted to approximately Rs. 135.9 billion (S$2.53 billion). In respect of some of the tax issues, pending final decisions, Airtel had deposited amounts with statutory authorities.

Thailand
AIS, a joint venture of the Group, has various commercial disputes and significant litigations which are pending adjudication. 

CAT Telecom Public Company Limited (“CAT”) has demanded that AIS’ subsidiary, Digital Phone Company Limited (“DPC”) pay additional revenue share of THB 3.4 billion (S$147 million) arising from the abolishment of excise tax, as well as to transfer the telecommunications systems which would have been supplied under the Concession Agreement between CAT and DPC of THB 13.4 billion (S$581 million) or to pay the same amount plus interest.

As at 30 September 2020, other claims against AIS and its subsidiaries which are pending adjudication amounted to THB 15.7 billion (S$678 million).

In October 2017, Intouch and its subsidiary, Thaicom Public Company Limited (“Thaicom”) received letters from the Ministry of Digital Economy and Society (the “Ministry”) stating that Thaicom 7 and Thaicom 8 satellites (the “Satellites”) are governed under the terms of a 1991 satellite operating agreement between Intouch and the Ministry which entails the transfer of asset ownership, procurement of backup satellites, payment of revenue share, and procurement of property insurance. Intouch and Thaicom have obtained legal advice and are of the opinion that the Satellites are not covered under the Agreement but instead under the licence from the National Broadcasting and Telecommunications Commission. This case is pending arbitration.

Philippines
In June 2016, the Philippine Competition Commission (“PCC”) claimed that the Joint Notice of Acquisition filed by Globe, PLDT and San Miguel Corporation (“SMC”) on the acquisition of SMC’s telecommunications business was deficient and cannot be claimed to be deemed approved. In July 2016, Globe filed a petition with the Court of Appeals of the Philippines (“CA”) to stop the PCC from reviewing the acquisition. In October 2017, the CA ruled in favour of Globe and PLDT, and declared the acquisition as valid and deemed approved. PCC subsequently elevated the case to the Supreme Court to review the CA’s rulings.

Indonesia
As at 30 September 2020, Telkomsel, a joint venture of the Group, has filed appeals and cross-appeals amounting to approximately IDR 465 billion (S$43 million) for various tax claims arising in certain tax assessments which are pending final decisions, the outcome of which is not presently determinable.
https://links.sgx.com/FileOpen/Halfyear-...eID=638828

Stay home and stay safe, everyone

[jaco]

This article gives an imho good summary of the problems Singtel is currently facing...

https://asia.nikkei.com/Business/Telecom...th-new-CEO

[reflection09]

Singapore Telecommunications Limited is currently in a long term downtrend where the price is trading 7.1% below its 200 day moving average.
From a valuation standpoint, the stock is 97.1% more expensive than other stocks from the Other sector with a price to sales ratio of 2.4.
Singapore Telecommunications Limited's total revenue sank by 6.1% to $4B since the same quarter in the previous year.
Its net income has increased by 186.0% to $574M since the same quarter in the previous year.
Finally, its free cash flow fell by 25.8% to $1B since the same quarter in the previous year.

[Wildreamz]

https://www.channelnewsasia.com/news/sin...1-11697576

Old article.

Recently tried to recontract my 2 years plan. And realize the scene is radical different from 2 years ago; and consumer options has exploded with a myriad of plans and 11 telcos to choose from (and the number is increasing by the month). How times has change. I expect at least 2-3 years more of contraction, consolidation and margin erosion for local telcos.

[Raks]

How banks are becoming telcos and telcos are becoming banks in Africa
https://medium.com/@wizaj/how-banks-are-...d9d45740e8

Are Partnerships Between Banks and Telcos the Next Big Thing in FinTech?
https://blog.strands.com/are-partnership...in-fintech

Telcos Expand Financial Services in Cooperation with Local Banks
http://koreabizwire.com/telcos-expand-fi...nks/162108

Regarding grab-Singtel (6:4) winning digital banking license, I believe it will go to a money burning stage a little more before the earnings will be reflected on the bottom line. Regardless, good development for Singtel/ telco finally. In the era of amt of data & user base (paying or not) can be taken into valuation, Singtel was not valued in such manner.

[Wildreamz]

How banks are becoming telcos and telcos are becoming banks in Africa
https://medium.com/@wizaj/how-banks-are-...d9d45740e8

Are Partnerships Between Banks and Telcos the Next Big Thing in FinTech?
https://blog.strands.com/are-partnership...in-fintech

Telcos Expand Financial Services in Cooperation with Local Banks
http://koreabizwire.com/telcos-expand-fi...nks/162108

Regarding grab-Singtel (6:4) winning digital banking license, I believe it will go to a money burning stage a little more before the earnings will be reflected on the bottom line. Regardless, good development for Singtel/ telco finally. In the era of amt of data & user base (paying or not) can be taken into valuation, Singtel was not valued in such manner.

Part of the reasons, is they have been struggling to monetize their user-base; which is also shrinking in recent years (TPG, MVNOs etc.).