Singtel

Singtel: UOBKH issues update, maintains Sell with TP$3.22. 32% own Bharti Airtel faces regulatory uncertainties which will affect its future earnings. The 2G auction has been delayed again for the 2nd time and the outcome will affect the future pricing of spectrum in India. This does not directly affect Bharti though. However Bharti is under investigation for excess spectrum allocated to it. Bharti will also be affected by the refarming of 900MHz to 1800MHz spectrum when the existing licence expires in 2014-16. The 900MHz spectrum is more efficient and the refarming will result in additional capex for Bharti. The 900MHz spectrum freed by refarming will be allocated in a new 900MHz auction to be conducted as early as 1H13. The price will be set at 2x the 2G auction mentioned above.