SingTel bets on regional associates for much-needed growth

Telkomsel and Bharti are the main drivers.

SingTel is counting on the stellar performance of its regional mobile associates for growth. According to UOB Kay Hian, SingTel benefits from pricing stability and growth in Indonesia and India, the two largest markets for its regional mobile associates. 

In Indonesia, growth from Telkomsel is driven by higher data traffic and expansion of subscriber base. Competition has eased in the country since the industry consolidated to four players, and local telcos are now seeing higher revenues.

Meanwhile, growth in its Indian associate Bharti is driven by expansion of subscriber base and financial deleveraging.

“SingTel will benefit from growth in Indonesia and India through Telkomsel and Bharti. Regional mobile associates, including contributions from AIS and Globe Telecom, accounted for 45.3% of group pre-tax profit. SingTel has declared an interim dividend of 6.8 S cents per share. The ex-date for the interim dividend is 19 Dec 14. The stock provides an attractive dividend yield of 4.6%, which is almost 1SD above long-term mean,” noted UOB Kay Hian.