KUALA LUMPUR: OSK Research is maintaining its Neutral call on telcos but downgraded DiGi from Buy to Neutral.
It said on Thursday, April 21 Malaysia and Singapore have agreed to cut roaming rates by 20% for voice calls and 30% for SMS with effect from May 1. The mobile operators that have signed reciprocal agreements to cut roaming tariffs are SingTel, StarHub, M1, Celcom Axiata, Maxis, Digi and U Mobile.
'While lower roaming rates are typically negative for the telcos in the short term given the inelastic nature of roaming calls, it is expected to stimulate usage in the longer term to offset the revenue dilution,' it said.
OSK Research is maintaining its NEUTRAL recommendations for SINGTEL (FV: S$3.00) and STARHUB (FV: S$2.85) whilst keeping its BUY rating on M1 (FV: S$2.85), its'' top pick for the Singapore telecoms sector.
For the Malaysian mobile telcos, it is retaining its BUY recommendation on AXIATA (BUY, FV: RM5.83) and NEUTRAL call on MAXIS (FV: RM5.20).
'We are downgrading our recommendation on DIGI to NEUTRAL from BUY previously as its share price has rallied 15% since our upgrade in late January and has surpassed our DCF fair value of RM27.90,' it said.
It said on Thursday, April 21 Malaysia and Singapore have agreed to cut roaming rates by 20% for voice calls and 30% for SMS with effect from May 1. The mobile operators that have signed reciprocal agreements to cut roaming tariffs are SingTel, StarHub, M1, Celcom Axiata, Maxis, Digi and U Mobile.
'While lower roaming rates are typically negative for the telcos in the short term given the inelastic nature of roaming calls, it is expected to stimulate usage in the longer term to offset the revenue dilution,' it said.
OSK Research is maintaining its NEUTRAL recommendations for SINGTEL (FV: S$3.00) and STARHUB (FV: S$2.85) whilst keeping its BUY rating on M1 (FV: S$2.85), its'' top pick for the Singapore telecoms sector.
For the Malaysian mobile telcos, it is retaining its BUY recommendation on AXIATA (BUY, FV: RM5.83) and NEUTRAL call on MAXIS (FV: RM5.20).
'We are downgrading our recommendation on DIGI to NEUTRAL from BUY previously as its share price has rallied 15% since our upgrade in late January and has surpassed our DCF fair value of RM27.90,' it said.
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