Telco

Telco: OCBC notes it was a pretty dull 2QCY14 for all the telcos, with all of them reporting results within expectations. One main reason for the lower profitability is likely due to the still intense competition in the fiber broadband market, with the smaller players (including M1) using low pricing to snatch market share away from incumbents. Accordingly, SingTel and Starhub trimmed their FY guidance , and outlook seems muted , with still a long road ahead to monetize data to make up for falling voice and SMS usage. In addition, there could be more competition with recent news that MyRepublic is interested in being the 4th telco here. With earnings growth likley to stagnate this year, OCBC maintains Neutral on the sector, with decent yields being the redeeming grace.