We gather that SingTel will continue to be aggressive in acquiring market share despite its leadership positions in prepaid and postpaid mobile and fixed broadband to position itself for the changing behaviour of consumers in the next 3-5 years

• Volatile stability. We came away from SingTel’s investors’ day with the view thatdefensiveness is tempered in the short term by its aggressive ambitions in Singaporeand volatile currencies.

• Capital management. SingTel has no plans to buy back shares and prefers capitalreductions to reduce the number of shares outstanding. It believes there is room toraise its gearing, currently at 1.2x net debt/EBITDA and 0.35x net debt/equity, andwill review it when needed.

• Continued aggression in Singapore. We believe SingTel will continue to acquiremarket share aggressively despite its leadership position in mobile and broadband toposition itself for higher multimedia spending by consumers in the future.

• Australia ambitions. We continue to doubt Optus’s ability to pull off the nextgeneration broadband network (NBN) project without the support of larger partners.• No slowdown in India. Bharti does not expect its growth to be derailed by theeconomic downturn and does not expect its leadership position to be threatened.

• Further margin compression in Indonesia. Telkomsel expects EBITDA margins todecline 3-5% pts if mobile termination rates are cut. However, it has not felt anyimpact from plunging commodity prices on usage or subscriber growth.

• Maintain NEUTRAL with an unchanged S$2.72 sum-of-the-parts target price.Despite its historical trough valuations, we believe upside potential will be capped bypotential margin pressure in Singapore from aggressive customer acquisitions andvolatile regional currencies.