OREANDA-NEWS. February 12, 2016. Across Southeast Asia, the Telecommunications Services sector comprises less than 50 primary-listed stocks in with a combined market capitalisation of S\\$235 billion. According to the Global Industry Classification System (GICS®), the Telecommunication Services sector comprises companies that provide communications services primarily through a fixed-line, cellular or wireless, high bandwidth and/or fiber optic cable network.

Singapore Exchange (SGX) lists 10 companies categorised by GICS® to the Telecommunications Sector, which have a combined market capitalisation of S\\$67.1 billion. The three largest capitalised listed telcos – Singapore Telecommunications, StarHub and M1 – have a combined market capitalisation of S\\$66.9 billion, with Singtel the largest capitalised listing on SGX. These three account for 28.4% of the total market cap of South East Asia’s Telecommunications Sector.

In the year thus far, these three stocks averaged a negative 3.7% total return, which brought their five-year total return to 57.7%. These three stocks maintain an average dividend yield and free cash flow yield of 5.5% and 4.3% respectively, which are higher than ASEAN telcos average. The free cash flow yield is free cash flow as a function of the market capitalisation of the stock. Free cash typically indicates how much money a company or trust had remaining after capital expenditure over the past 12 months. As noted in a Market Update on 20 January (click here), Singapore’s three largest telecoms operators averaged cash flow from operations of S\\$1.9 billion over the preceding 12-month period– the highest in Southeast Asia.

The table below details the three stocks, and is sorted according to market capitalisation. Click on each stock to visit its profile page on SGX StockFacts.

Name SGX Code Market Cap in S\\$B Total Return YTD % Total Return 5 Years % Dvd Ind Yld % Free Cash Flow Yld % Trailing 12M Free Cash Flow to Firm in S\\$M P/E P/B
Singapore Telecommunications Z74 58.4 -0.3 55.7 4.8 4.8 2,825 15.0 2.4
StarHub CC3 6.2 -2.4 81.4 5.6 3.6 226 16.1 32.7*
M1 B2F 2.3 -8.5 36.0 6.1 4.5 105 13.0 5.6
Average     -3.7 57.7 5.5 4.3 1,052 14.7 13.6

Source: SGX, Bloomberg & SGX StockFacts (data as of 10 February 2016)

* Shareholders’ equity at the listed company level is higher than the group level due to the adoption of merger accounting in July 2002, when the shares of cable TV provider, SCV, were acquired and consolidated into the StarHub Group.

Singtel provides a diverse range of services including fixed, mobile, data, Internet, TV, info-communications technology (ICT) and digital solutions. StarHub offers a full range of information, communications and entertainment services for both consumer and corporate markets. StarHub operates a mobile network that provides 4G, 3G and 2G services. It also manages an island-wide HFC network that delivers multi-channel pay TV services (including HDTV, Internet TV and on-demand services) as well as ultra-high speed residential broadband services. StarHub operates an extensive fixed business network that provides a wide range of data, voice and wholesale services. Over Singapore’s fibre-based Nationwide Broadband Network, StarHub offers a broad range of home and business broadband plans, as well as commercial and residential IPTV services. M1 provides a full range of mobile and fixed communication services. In the mobile segment, M1 operates nationwide 4G, 3G/High Speed Packet Access (HSPA) and 2G (GSM) networks, and offer a wide range of voice, data and value-added services on these networks. In the fixed segment, M1 offers various Fibre Broadband service plans, including fixed voice and other value-added services for residential homes. For corporate customers, besides connectivity services, M1 offers managed and data centre services, as well as cloud-based and other enterprise solutions.