Mobile prices in India are expected to rise over the next three to four years. Bharti Airtel can also lift ARPU organically as users switch to smartphones, move to postpaid, roam more and pay excess data charges, adding 5 to 8 rupees annually. Stronger cash flow and lower capital intensity should support higher dividends for Bharti, with further upside from potential disposals of Robi, Dialog and an Airtel Payments Bank IPO.
In Thailand, mobile prices have been stable in the past year after the removal of unlimited data plans. AIS reported blended ARPU increased 3.9% year-on-year in 2QFY2025, while 5G adoption and its planned virtual bank are expected to drive further growth.
In Australia, Optus has benefited from industry-wide price hikes, including at its MVNO unit amaysim. A new management team, flat operating expenses despite high inflation, and efforts to modernise its systems are expected to lift Optus’s margins, with room for ebitda to expand from 27% towards peers’ mid-30% range.
Chew notes that mobile prices in the Philippines appear to be bottoming. Globe Telecom continues to face pressure from incumbents but has seen its fintech arm Myint (or GCash) grow into a key earnings contributor, contributing to 26% of net income before tax in 2QFY2025.
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In Indonesia, Telkomsel’s efforts to raise prices remain fragile amid weaker consumer sentiment, though broadband demand is a bright spot.
In Singapore, downward pressure persists, but there are “fingers-crossed expectations” following the planned consolidation of Simba and M1, notes Chew. Cost savings from network modernisation, the use of AI and shifting to new data centres are expected to help support Singtel’s industry-leading 39% ebitda margins, with over 80% of enterprise revenue still coming from core connectivity.
Chew also cites stronger earnings visibility from Singtel’s data centre business, Nxera, which is set to double capacity and ebitda.
Its GPU-as-a-Service will launch in 2HFY2025 after a year of fine-tuning, catering to sovereign and government demand. Contracts will typically run three to five years, with GPUs largely underwritten by customers or redeployed at expiry, targeting mid-teens or higher returns.
Moreover, Singtel’s 58 megawatt (MW) data centre in Tuas, which will open in January 2026, is already 50% sold. The facility will double Singapore's capacity to 120MW.
Overseas expansion is also underway, with a 26MW site in Thailand 80% sold and a 38MW project due in 2QFY2027 already one-third pre-sold.
According to Singtel, Nxera will prioritise Singapore clients, with Johor and Batam serving as spillover zones, and is entering Tokyo to capture strong GPU demand.
“We increased our EV/Ebitda multiple for Singtel from 7 times to 8 times, in line with peers as operations improve in Australia and data-centre earnings accelerate. Value realisation (or medium-term special) dividends are likely to remain at the higher end of expectations at around 6 cents with the larger pipeline of assets to monetise,” writes Chew.
As at 12.18 pm, shares in Singtel are trading 1 cent lower or 0.23% down at $4.30.
