by winston » Wed Jun 20, 2018 11:00 am
not vested
Singtel: Embracing a digital future
Singtel’s core markets (Australia and Singapore) continue to face competitive pressures in the consumer segment with the impending entry of TPG as the fourth telco in both markets.
For Singapore, Singtel will continue to differentiate itself by:
1) investing to maintain superior network quality,
2) ensuring better customer experience,
3) offering higher value services, and
4) offering innovative offerings such as handset leasing plans.
Singtel is also digitalizing its operations to lower costs and improve customer experience.
For Optus in Australia, it will continue to focus on four key pillars:
1) lead in customer experience,
2) lead in mobile networks,
3) differentiate with premium content offering (e.g. EPL, National Geographic, etc.), and
4) improve business productivity.
Over the longer-term, Management targets to keep traditional carriage revenues flat over five years as voice-to-data migration continues, but aims to grow digital and enterprise revenues as a proportion of consolidated revenues from 24% in FY18 to 50% by FY23.
Maintain BUY on Singtel with unchanged FV of S$4.10, as we continue to like its diversified earnings base and growing exposure into the digital and enterprise segments.
Source: OCBC
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