Telco

Telco: Broadband competition has intensified materially, driven by NGNBN progress; MyRepublic launched a new promotion, offering 1Gbps broadband for $49.99/month, aggressive compared to peers' offerings. This offer adds to the pressure, though MyRepublic at least did not undercut the lowest price-point and might only offer this plan for limited time. However, if the promotion is offered for an extended period and provokes response from other players, it would basically limit the sector's opportunity to monetise subscribers who upgrade to higher speed. CS believe Starhub is most vulnerable to competition, with residential broadband accounting for ~11% of its service revenue and full impact from the recent price cut yet to come through. Within the sector, House prefer M1 (higher mobile exposure, increasing broadband market share from low base) and SingTel with its international exposure to help offset domestic pressure and drive earnings.