Telecommunications Weekly Review: 8th – 14th December 2008

December 15, 2008 at 9:04 am Leave a comment

· MNP registers 100,000 ported numbers…
About 100,000 numbers have switched mobile operators since mobile number portability (MNP) was implemented in October. This is merely a tiny portion of the total mobile subscriber base in the industry. It is still too early to tell which mobile operators have benefitted the most as it was reported that ported numbers had been evenly distributed without any mobile operators experiencing any major change.
· … while competition remains benign
But what is clear is that there has been a lack of all-out price war or handset subsidy war to snatch subscribers from each other. However, we do note that DiGi has been quite aggressive with its handset subsidies which caused a marginal contraction in EBITDA margins. Nonetheless, as long as competition remains rational, EBITDA margins should stabilize going forward.
· HSBB to be cheaper with use of TNB cables…
The cost of developing TM’s RM11.3bn high-speed broadband (HSBB) network may be scaled down with the use of the fibre optic cables of Tenaga Nasional Bhd. The Ministry of Energy, Water and Communications has asked TM to use the existing infrastructure available with TNB to avoid duplication of fibre optic usage. In addition, the ministry had also said TM had been directed to make all purchases through tenders to offer equal opportunity and trim down implementation costs. There is unlikely to be any positive impact to TM’s bottom line as according to the ministry, any cost-savings will be refunded.
· … but what of TdC cables?
However, this leads to the question of whether TM should make use of Time dotCom Bhd’s (TdC) existing fibre optic infrastructure that runs through the country’s North-South Expressway. No mention on using TdC’s fibre optic infrastructure was made by the ministry. As it currently stands, we understand TdC’s fibre optic infrastructure to be grossly underutilized. Utilizing TdC’s fibre optic cables as well should certainly lead to more cost-savings while developing TM’s HSBB network.

· MAINTAIN NEUTRAL on the sector

TMI recovers. TMI’s share price recovers in tandem with a recovery in the Rupiah. In a filing on December 5, EPF was seen scooping up more shares in the domestic telecom players, further adding to its positions since November 24. EPF bought an additional 664,300 shares in TM, bringing its equity stake to 15.5%. EPF also added 2,745,100 TMI shares to its portfolio and now owns 14.6% in TMI. In a filing on November 24, EPF had bought 824,700 TM shares and 651,300 TMI shares.


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Property Weekly Review: 8th – 14th December 2008 December 15, 2008 Daily Highlights

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