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Mobile Telecommunications Returned 16.5% In 2013
Perspective | 07 January 2014
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Singapore is a city well-known for world-class connectivity and its telecommunications sector has played a significant role in the national economy, both at a corporate and a retail level.

Singapore Exchange (SGX) lists three mobile telecommunication companies, two of which are a part of the Straits Times Index (STI). Each of these two STI stocks have their own highlights – SingTel is the largest capitalised company listed on SGX and coincidentally distributes the highest dollar amount in dividends, while StarHub has the third highest indicative dividend yield of the STI stocks and is one of three STI stocks that pay stockholders dividends on a quarterly basis. The third mobile telecommunication company, M1 is one of the 50 stocks that make up the FTSE ST Mid Cap Index.

Last year, the FTSE ST Telecommunications (Mobile) Index generated a total return of 16.5 percent, which includes dividends distribution. A glance at the FTSE Asia Monthly Index Performance Report shows that at the end of 2013, this Index has been one of the most consistent over the different time frames of one month, one year, three years and five years. The total returns of the Sector Index are tabled below. Note that of all the FTSE ST Sector Indices, the FTSE ST Telecommunications (Mobile) Index generated the highest three year return and the seventh highest five year return.

Performance Of The FTSE ST Telecommunications (Mobile) as of 31 Dec 2013

Sector diversity is a key aspect of the stocks listed on SGX and there are a total of 28 FTSE ST Sector Indices. Of these indices, there are just six with a single constituent. Together, the 28 Indices provide a higher level of sectoral detail than the standard FTSE ST Industry Indices used in the daily summary on the SGX website.

The combined market capitalisation of the three mobile telecommunication companies is $67.6 billion which is approximately 7.2 percent of the total market capitalisation of all primary and secondary listings on SGX.

Source: Bloomberg (data as of 5 January 2014)

According to FTSE, the mobile telecommunications subsector comprises of mobile telephone services, including cellular, satellite and paging services. SingTel has segmented more than 40 percent of revenue reported in its recent Annual Report to Mobile Communications while StarHub and M1 segmented more than 50 percent of its revenue to Mobile Communications. A standard business measure for mobile telephone providers is the subscriber base. All three mobile telephone providers report their prepaid and postpaid mobile subscriber base on a quarterly basis. The quarterly numbers as of 30 September 2013, the most recent quarter, are detailed below.

From the table, it can be observed that postpaid mobile subscriber base is higher than prepaid mobile subscriber base for all three providers, indicating preference for postpaid mobile subscription in Singapore. SingTel leads the subscriber base with postpaid numbers almost twice that of Starhub and M1, both of which are nearly equal in postpaid subscriber base size.

Singtel  3.160 -0.01 -0.32%   
Business: Asia's leading communications group. [FY19 Turnover] Mobile Comm (31.1%), Data & Internet (19.2%), Infocomm Technology (17.5%), Sale of Eqmt (16.5%), Digital Biz (7.2%), Fixed Voice (5.2%), Pay-TV (2.1%), Leasing (0.8%), others (0.4%).

Insight: May-19, FY19 operating revenue remained flat at $1... Read More
StarHub  1.280 -0.010 -0.78%   
Business: [FY18 Turnover] Mobile (34.9%), sale of equipment (22.4%), enterprise fixed (21.6%), pay TV (13.2%), broadband (7.9%).

Insight: May-19, 1Q19 total revenue rose 6% to $596.8m attr... Read More

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