Telcommunication Sector : Game-changing webe unlimited data Neutral

STOCK FOCUS OF THE DAY

Telcommunication Sector : Game-changing webe unlimited data            Neutral

TM’s webe (formerly Packet 1 service) had a soft launch for its 4G Long Term Evolution (LTE) service last week to selected and existing Telekom Malaysia and P1 WiMAX subscribers, priced at RM79/month (excluding GST) for an unprecedented and unlimited Internet data, unlimited calls and SMS.

 At this point, the service is not available to all, as the full launch is expected within 1-2 months. For non-TM/PI customers, the webe 4G LTE is service is priced at a much higher RM199/month. The selected TM and P1 customers would enjoy a discount of RM60/month plus another RM60/month if they use a ‘webe-certified’ smartphone, which has around 40 models.

MalaysianWireless revealed that webe, which has a 4G LTE coverage of 70% in the Supported by TM’s domestic roaming arrangement with Axiata’s Celcom, webe 4G LTE customers will be able to roam on the Celcom 3G network (nationwide) at no additional cost for a seamless experience for areas beyond the current 850MHz range. Despite offering ‘unlimited’ data, webe is offering the service with a ‘Fair Usage Policy’. Customers who wants to use tethering or turn on WiFi Hotspot on their phone will have to pay RM6/2 hours.

Mobile operators have been revealing plans with higher data propositions to retain their subscriber market share and the latest game-changing development will be webe’s unlimited mobile data plan. Until webe has proven that it is able to meet customers’ requirements for faster data speed, we continue to view Axiata Group as the best-positioned to take advantage of the upcoming shakeout by offering a unified package together with TM’s broadband services, while Digi and Maxis are struggling to maintain ARPU rates.

Maintain NEUTRAL view given the increasingly competitive mobile market landscape with HOLD calls maintained for Maxis, Digi and TM. We reiterate our only BUY, on Axiata for its stronger contributions from overseas businesses, value accretive NCEL acquisition in Nepal and cross-selling opportunities arising from its domestic roaming arrangement together with HSBB and backhaul collaboration with TM.

Others :

Genting Plantations : Reducing FY16F FFB output assumption     Buy

QUICK TAKE

Plantation Sector : Newsflow for week of 27 June to 1 July           Neutral

ECONOMIC HIGHLIGHTS

Japan : Deflation likely to persist

Malaysia :  Expect a decent 4.0% GDP growth

NEWS HIGHLIGHTS

Kuala Lumpur Kepong : Forays further downstream

Malaysia Resources Corp : Bags RM189m contract to restore Pahang river estuary

Infrastructure Sector : Tussle for SEA port supremacy