Singtel doubled excess usage charges to $10.7 per gigabyte

Are M1 and Starhub following suit?

From 16 Sep 2013 onwards, SingTel has doubled excess usage charges to S$10.70 per GB.

Meanwhile, M1 & StarHub have been offering promotional prices of S$5.35 & S$6.42 per GB, compared to their regular prices of S$10.70 & S$8.56 respectively.

DBS Group Research believes that M1 & StarHub were forced to offer the promotional prices due to SingTel’s reluctance to raise rates, but that has changed now.

Here's more from DBS:

M1 is also benefitting from its Sep 2012 price-hike, where it raised monthly subscription fees by S$3 across the board to match price plans offered by its competitors.

We raise our FY14F/15F earnings 7%/14%, assuming that M1 charges S$10.70 per GB from Jan 2014 onwards.

M1 offers double-digit growth with FY14F yield of 5.3%. Our TP is raised to S$3.60 based on DCF (WACC 6.5%, terminal growth 0%). M1 is trading at 17x FY14F PE versus 19x for StarHub, despite achieving superior growth. M1’s FY14F dividend yield of 5.3% is also superior to StarHub’s 4.7%.

M1 is the only telco in Singapore, Malaysia & Indonesia, which offers more than 5% yield with double-digit earnings growth. In ASEAN, only Thai telcos offer superior growth and yield to M1,in our estimates.