Two reasons why analysts are not bullish on telcos

The players are facing higher subscriber acquisition costs.

For CIMB analysts, there will be no relief in mobile revenues and margin pressures as Singapore telcos continue to fight to protect their market share amidst higher subscriber acquisition costs (SAC).

Analyst Lim Siew Khee said the only highlight in M1's recent quarterly report was probably the announcement that its shareholders have decided not to proceed to sell their stakes.

For Singtel, its overseas operations and associates are also showing weakness on the back of keener competition.

"Although share prices have fallen year-to-date, the risk/reward is not attractive for us to turn bullish as we believe 2H17F earnings will likely worsen with heightened SAC in tandem with the launch of new handsets (iPhone 8, Samsung Note 8) to lock in market share ahead of TPG’s entry into Singapore as the nation's fourth mobile network operator," she said.