SingTel's 'aggressive' channel acquisitions threaten StarHub's pay TV

The former now boasts of 130 channels.

According to CIMB, there are no foreseeable major catalysts for the telcos. The mobile segment in Singapore should benefit from surging data usage, but competition is rising in pay TV. 

A planned auction for 4G spectrum is unlikely to involve heated competition and therefore does not affect our view of higher dividends for StarHub.

Singapore's telcos are trying to monetise the surging usage of mobile data by reducing the volume of data bundled. They have cut data allowances from 12GB previously to 2GB for new contracts.

Here's more from CIMB:

As 10-20% of the users consume more than 2GB of data per month, telcos will be able to earn higher revenue by revising their data plans. We estimate that if 10% of postpaid users upgrade their plans to the next tier, ARPUs could rise by 5-6%, bolstering the core profits of M1, StarHub and SingTel by 7%, 4% and 0.4%.

We believe SingTel‟s aggressive acquisition of content and customers will continue to erode StarHub‟s market share in pay TV. StarHub's pay-TV churns could rise as we expect strong competition from SingTel. SingTel's mioTV offerings have broadened significantly after it added 40 channels from Fox International Channels to its line-up on 1 Nov 12.

With a new line-up of more than 130 channels, SingTel has substantially narrowed its gap with StarHub (157 channels), diminishing the latter‟s differentiation and dominance. In addition, SingTel has retained rights to broadcast Barclays Premier League in 2013-15.