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Negatives of telco wars not yet fully priced in, says Maybank

Stanislaus Jude Chan
Stanislaus Jude Chan9/14/2017 03:14 PM GMT+08  • 4 min read
Negatives of telco wars not yet fully priced in, says Maybank
SINGAPORE (Sept 14): Maybank Kim Eng Research is initiating coverage on the Singapore telecommunications sector with a “negative” rating, backed by its belief that the market has not fully priced in the impending entry of TPG Telecom.
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SINGAPORE (Sept 14): Maybank Kim Eng Research is initiating coverage on the Singapore telecommunications sector with a “negative” rating, backed by its belief that the market has not fully priced in the impending entry of TPG Telecom.

“We believe consensus forecasts that currently show slow erosion in margins during a period of theoretically heightened competition do not factor in higher subsidies or a price war,” says Maybank analyst Luis Hilado in a Wednesday report.

Taking into account acquisition and retention subsidies, Maybank says its FY18 estimated EBITDA and core profit forecasts for the three incumbent telcos – SingTel, StarHub, and M1 – are “significantly lower” than consensus.

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