SingTel - UOB Kay Hian 2023-03-17: On Stronger Footing As The Group Focuses On Improving ROICs

• SingTel (SGX:Z74) provided updates on its business segments which face favourable tailwinds in 2023. With this and price increases in Jan 23, Singapore consumer is set to experience higher data roaming revenue from China’s reopening. Optus is back to customer net adds after its data security breach incident in 2022.
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Singapore consumer: Further upside from travel boost.

• We understand Singapore’s data roaming revenue is currently at 70-75% of pre-COVID-19 levels. The reopening of China towards end-Dec 22 will help to further lift roaming revenue for the group. We estimate China to potentially be one of the top three contributors of data roaming revenue for the group.Historically, data roaming revenue forms around 20% of Singapore consumer’s revenue and boasts EBITDA margins of about 80%.
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• Despite stiff competition from Mobile Virtual Network Operators (MVNO), prepaid ARPU is expected to remain largely stable, supported by recovering travel demand and the return of foreign workers. The loss of the English Premier League broadcasting rights would help support margins as it had been loss-making for the group.

Optus: Recovery in subscriber base.

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Chong Lee Len UOB Kay Hian Research | Llelleythan TAN UOB Kay Hian | https://research.uobkayhian.com/ 2023-03-17 SGinvestors.io

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