SGT 0.00% $3.98 singapore telecommunications limited.

comparison study Singtel/Optus--Telstra, page-3

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    BK,

    Can you please explain again how you arrive at this conclusion.

    From an asset value, debt to equity ratio, times interest covered perspective, etc, I agree with you.

    From a business execution perspective, however, I do not.

    Telstra is already moving to re-introduce subsidies across the network, describing them, however, as "loyalty bonuses" for high end (ie: high ARPU) customers.

    The fact that Telstra is doing this means that they are either losing, or at risk of losing, the high end (highly prized) mobile customers.

    But, to who are these customers going?

    Answer, Optus, due to its specific targeting of this particular sector of he market.

    Answer, Hutchison, due to the concentration, and depth of CDMA offering in Melbourne and Sydney.

    During the March quarter, Telstra added 154k new subscribers, Optus 125k, Vodafone 26k, and Hutchison 42k.

    Due to its mobile revenue decline in the March quarter, one would have to argue that Telstra's customer growth during Q3 was of a poorer standard than previously, or that its churn rate was much higher in the quarter than previously.

    Conversely, Optus' financials suggest that the quality of its subscriber pick-up during Q3 was better than previously (ie: it may well have arrested its declining ARPU values, for now), but that the effective cost (ie: the customer acquisition cost) had risen due to the retention of subsidies.

    Vodafone, however, was a story of complete decay and remains the case with connected customers migrating away towards Optus and Telstra.

    Hutchison though not only took additional market share during Q3, but also kept its ARPU values intact (slightly improved) and further reduced its CAC (customer acqusition costs) values.

    To my way of thinking, Telstra is under incredible pressure at the moment and will continue to be for some time in the future.
 
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