Report
Alastair Jones

New Street: Asian Telcos: Dividend stability despite cuts elsewhere

Dividend cuts has been a focus for investors in Europe over the last month. In this note we run through why we think Asian telcos are likely to see much more stable shareholder remuneration driven by lower leverage, no evidence of any ‘solidarity measures’, and recent results highlighting dividend importance to the equity story.
Underlyings
China Tower Corp Ltd

Chunghwa Telecom Co. Ltd

Chunghwa Telecom is a telecommunications service provider. Co.'s principal services include domestic fixed communications services, including local and domestic long distance telephone services, broadband access services, Wi-Fi services, and other domestic services; mobile communications services, including mobile services, sales of mobile handsets, tablets, and other mobile services; internet services, including HiNet, internet value-added services, and other internet services; international fixed communications services, including international long distance telephone services, satellite services and other international services; and other services, including non-telecom services.

Digi Communications NV

Globe Telecom Inc.

Globe Telecom is a provider of telecommunications services. Co. operates mobile, fixed line and broadband networks, providing communications services to individual customers, small and medium-sized businesses, and corporate and enterprise clients. Co.'s business segments consist of: mobile communications services, which consists of digital cellular telecommunications services; and wireline communications services, which consists of fixed line telecommunications services. As of Dec 31 2014, Co. had about 44.0 million mobile subscribers, over 2.8 million broadband customers, and over 762,000 landline subscribers.

Jasmine International PCL

Jasmine International Public Company Limited is a Thailand-based holding company engaged in integrated telecommunication service provider. The Company and its subsidiaries categorize the businesses into four groups: broadband business, which is the provision of high-speed linkage for broadband Internet and software development, distribution, and services of general software including software systems that support value-added services for broadband business; telecom network and service provider business including the provision of marine services and submarine optical fiber maintenance services on the eastern and western coast lines and the provision of international private leased-circuit (IPLC); system integration business, which is the operation of telecom system integration and cloud computing with full services, and other businesses, which are the operation of space rental and related services for Jasmine International Tower.

Maxis Bhd.

Maxis is engaged as a communications service provider. Co. operates in three segments: mobile services, which comprises postpaid mobile, prepaid mobile, mobile data, broadband and roaming services; fixed line services, which comprises a range of voice services, data services, Very Small Aperture Terminal services and Internet Protocol and managed services to consumer and business customers; and international gateway services, which comprises services to international telecommunications carriers for termination of traffic into Malaysia, services to send Co.'s own international traffic abroad and bandwidth leasing services. As of Dec 31 2010, Co. had 13,954,000 mobile subscriptions.

NTT DoCoMo Inc.

NTT DOCOMO is a mobile telecommunications carrier. Co. has three operating segments. The telecommunications segment includes mobile phone services (LTE(Xi) services and FOMA services), optical-fiber broadband service, satellite mobile communications services, international services and the equipment sales related to these services. The smart life segment includes video and music distribution, electronic books and other services offered through DOCOMO's "dmarket" portal, as well as finance/payment services, shopping services and various other services. The others segment primarily includes "Mobile Device Protection Service," as well as development, sales and maintenance of IT systems.

PLDT Inc.

PLDT is telecommunications service provider in the Philippines. Co., through its three principal business segments, wireless, fixed line and others, offers a range of telecommunications services across the Philippines' extensive fiber optic network as well as wireless, fixed line and satellite networks. Through its wireless business, Co. provides cellular and wireless broadband, satellite and other services. Co.'s fixed line business group offers local exchange, international long distance, national long distance, data and other network and miscellaneous services. Co.'s other business segment includes investments in multi-media content and other companies.

PT XL Axiata Tbk

PT XL Axiata Tbk is a cellular provider in Indonesia. Co. maintains its extensive network infrastructure and services around the country. Co. provides services for retail customers and offers business solutions to corporate customers. Co.'s cellular network runs on 'GSM 900/DCS 1800' and 'IMT-2000/3G' technologies. Co. also holds several licenses, including closed regular network (leased line), Internet service provider (ISP), Voice over Internet protocol (VoIP), and Internet interconnection services (NAP). Co. has obtained an e-Money (electronic money) license from Bank Indonesia, the country's central bank, which enables Co. to provide remittance services to subscribers.

Rakuten Inc.

Rakuten is mainly engaged in the Internet-related business. Along with its affiliates, Co. operates in two business segments. The Internet Services segment is engaged in the operation of electronic commerce sites, including an Internet shopping mall "Rakuten Ichiba," an online cash back site, a travel booking site, portal sites and digital contents sites; the sale of advertising on Co.'s sites; the provision of messaging and communication services; and the management of a professional baseball team "Tohoku Rakuten Golden Eagles." FinTech segment is engaged in the provision of Internet banking services and online securities trading services, and the credit card and life insurance businesses.

Singapore Telecommunications Limited

Singapore Telecommunications is engaged in the operation and provision of telecommunications systems and services, and investment holding. Co. provides a range of multimedia and Information and communications technology solutions, including voice, data and video services over fixed and wireless platforms. Within both Singapore and Australia, Co. provides mobile communications, data and Internet, national telephone, information technology and engineering, sale of equipment, international telephone and pay television. Co.'s key businesses include: Group Consumer, Group Digital L!fe, and Group Information and communications technology.

Softbank Corporation

Telstra Corporation Limited

Telstra is engaged in providing telecommunications and information services for domestic and international customers. Co.'s operating segments are Telstra Retail, Global Enterprise and Services, Telstra Operations, and Telstra Wholesale. As of June 30 2016, Co. provided retail fixed data services to 3.4 million customers, retail fixed voice services to 5.7 million and domestic retail mobile services to 17.2 million customers.

Total Access Communication Public Co. Ltd.

Total Access Communication Public Company Limited is principally engaged in the provision of wireless telecommunications services and the sale of handsets and accessories. The Company operates in two segments: mobile telephone services and related services, and sales of handsets and starter kits. The Company offers various customer services, such as dtac wireless fidelity (Wi-Fi), e-Service, e-invoice, postpaid self-service numbers, prepaid self-service numbers, online order tracking and bill payment channels. The Company's personal services include postpaid, such as main packages, add-on packages, international calling and international roaming; prepaid, such as packages, happy subscriber identification modules (SIMs) and Happy Tourist SIM, as well as smartphones and tablets. The Company's products for business include voice package, mobile marketing, data and Internet connectivity, information and communication technology (ICT) and mobile solutions and services.

Vodafone Idea Ltd

Idea Cellular provides Global System for Mobile Communications (GSM) based mobile services and related telephony services to individuals and businesses in India. The company operates through three segments: Mobility Services, which provides GSM based mobile and related telephony services; International Long Distance (ILD), which provides international long distance services; and Passive Infrastructure, which provides passive infrastructure services. Co. offers 2G and 3G services that comprise roaming arrangements; ILD and other services; and a range of mobile broadband devices, including dongles and 3G smartphones that provide 3G applications and data services.

Provider
New Street Research
New Street Research

Provided by our team of experienced analysts, our work is idea driven, based on independence of thought, sector expertise, and firmly focussed on fundamentals and valuation.

New Street Research is an independent, partner-owned, research firm specialising in equity and debt research. Our equity research embraces the following sectors:

  • Pan European Telecom Services and Cable
  • US Telecoms, Cable, Satellite and Towers
  • Global Emerging Market Telecoms
  • Japan Telecoms
  • Asian Internet
  • Pan European Healthcare
  • Global healthcare thematic research

We provide debt research on:

  • Pan European Telecom Services and Cable


Analysts
Alastair Jones

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