Tuesday, May 13, 2008

SingTel, Starhub & M1: A Comparative Analysis

(Z74 = SingTel, CC3 = Starhub, B2F = M1)


Singapore Telecommunications Limited, together with its subsidiaries, provides services and solutions in fixed, mobile and data communications, Internet, IT and consultancy, and satellite.

  • Wireline services include cable-based and satellite-based fixed telecommunications network services, such as domestic and IDD services, leased lines, data communications, lease of satellite capacity, Inmarsat, and Internet services.
  • Wireless services comprise mobile telecommunications services, such as cellular and paging services, and sale of handsets and pagers.
  • Information technology and engineering services portfolio consists of information technology consultancy, systems integration, and engineering services.
  • Other businesses include subscription television; technical and management consultancy services; ownership and chartering of barges; provision of storage facilities for submarine cables and related equipment; billing services; IT disaster recovery services; operation and maintenance of fibre optic network between Brisbane and Cairns; research and development of software; and managing and operating a call centre for telecommunications services.
Singapore Telecommunications provides its services to corporate and consumer markets primarily in Singapore and Australia. The company was founded in 1879 and is headquartered in Singapore, Singapore. Singapore Telecommunications Limited is a subsidiary of Temasek Holdings (Private) Limited.

SingTel also has extensive overseas investments in Mobile operators around Asia. These include Bharti Airtel of India and Telkomsel of Indonesia.


StarHub, Ltd., an info-communications company, provides a range of information, communications, and entertainment services over its fixed, cable, mobile, and Internet platforms for residential and commercial customers in Singapore.

  • Mobile services include 3G that enables users to make video calls and 3.5G that offers broadband Internet access over mobile phone; mobile voice services; mobile data services, including video downloads, Web SMS, MMS animation and wallpapers, MMS retrieval centre, Disney mobile, mobile ESPN premiership, and themes, as well as call, MP3, and true tones; green prepaid card; and roaming services.
  • Cable TV services comprise operation of news, movies, entertainment, sports, music, and education channels.
  • Broadband services include mobile and home broadband access, as well as other Internet services; and fixed network services comprise voice, data, Internet, and wholesale services for businesses.
  • StarHub offers online value-added services, such as online music portal; email and broadband content filtering service, family access network, and anti-virus email scan services; data/Web storage services; corporate portal and IP-VPN solutions; and content creation and development solutions.
It is also involved in the sale of customer premise telecommunication equipment. The company was incorporated in 1998 and is based in Singapore, Singapore. StarHub, Ltd. is a subsidiary of Asia Mobile Holdings Pte., Ltd.


MobileOne, Ltd. provides cellular mobile communications services in Singapore. It provides

  • a range of mobile voice and data communications services over its 2G/3G/3.5G network.
  • international call services to mobile and fixed line users; and wireless broadband Internet services to home, office, and mobile users.
  • a range of mobile voice, nonvoice, and value-added services on its cellular network and as an operator.
It has a network of operator-owned retail shops (M1 Shop) and operator-appointed distributor outlets in Singapore. As of December 31, 2007, MobileOne operated approximately 13 M1 shop outlets, as well as an e-shop, which sells mobile phones and accessories online. The company also had approximately 1,535,000 mobile customers comprising 856,000 postpaid customers and 679,000 prepaid customers.

In addition, it involves in the research and development of mobile telecommunications product and services, as well as provision of after sales support and customer services. MobileOne has a partnership with Vodafone to provide a range of wireless business products and solutions, as well as has a joint venture with PLDT (SG) Retail Service Pte, Ltd. to provide prepaid mobile services. The company was founded in 1994 and is headquartered in Singapore, Singapore.


The following is a comparative financial analysis of the three companies:


As can be seen SingTel has the highest margins whereas Starhub has the highest profitability ratios. However, SingTel has contributions from associates above the EBITDA line, so this skews the results.

Leverage & Multiples:

SingTel has the strongest leverage ratios. However it is also the most expensive, compared to M1 which is the cheapest stock, and has the highest yield.

Saturday, May 10, 2008

Lee Kuan Yew Wrong Again! This Time, It's Oil.

Two months ago, Lee Kuan Yew, Minister Mentor of Singapore and Chairman of GIC, made the following statements about oil prices, as reported by the Straits Times:
Oil prices 'unlikely to rise further'
March 8, 2008 (Straits Times)

OIL prices are not likely to go higher, Minister Mentor Lee Kuan Yew said yesterday.

As crude oil prices hit US$105 (S$145) per barrel,
MM Lee believes it is not likely to creep further up to US$110.

'The oil suppliers are testing the limits. They believe that China and India now form a new long-term base demand. They may be right,' he said.

'I don't think it can go up US$110, US$120, US$150 and the world economy goes on. Inflation will go through the roof.

'Economies of the West will go down, hyper-inflation in many developing countries. So it will go into reverse. There's no projection right to the end.'
Well, shortly after Lee Kuan Yew's pronouncement, Oil prices shot up above $110, and today is trading at above $125.

(Image courtesy of theenergycollective)

On top of that, just a few days ago, respected Goldman Sachs Analysts have predicted that oil could spike up towards $150 and even maybe $200!
Goldman Says Oil `Likely' to Reach $150-200 a Barrel
By Nesa Subrahmaniyan

May 6 (Bloomberg) -- Crude oil prices may rise to between $150 and $200 a barrel within two years because of a lack of adequate supply growth, Goldman Sachs Group Inc. analysts led by Arjun N. Murti said in a report.

``The possibility of $150-$200 per barrel seems increasingly likely over the next six-24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty,'' the Goldman analysts wrote in the report dated May 5.

Global fuel demand growth is outpacing gains in output. China, the world's fastest growing major economy, has more than doubled oil use since New York crude dropped to this decade's low of $16.70 a barrel on Nov. 19, 2001. That's soaked up most of the world's spare capacity amid supply cuts in Nigeria, Iraq and Venezuela.
Well well, wrong again, Mr. Lee Kuan Yew.

Wrong on energy, and wrong on banking.

Not only are the industry's most respected analysts holding opinions diametrically opposite to you, the world's most respected investors, such as Warren Buffett and Jim Rogers, have also made the opposite investment decisions compared to you.

Seriously, what is Lee Kuan Yew doing as the Chairman of GIC, Singapore's $300 billion investment fund? The man isn't qualified for the post!

Lee Kuan Yew vs Warren Buffett: Part 2
Lee Kuan Yew Ain't No Warren Buffett
GIC, UBS & Jim Rogers

Monday, May 05, 2008

Lee Kuan Yew vs. Warren Buffett - Round 2

Some time last week, Lee Kuan Yew made a few comments about GIC's investments in the big banks, and also about Warren Buffett. He said in a Bloomberg interview:
Singapore's GIC May Seek More Bank Assets, Lee Says
By Haslinda Amin and Linus Chua

April 30 (Bloomberg) -- Government of Singapore Investment Corp. may add more bank assets to its $18 billion of investments in UBS AG and Citigroup Inc. as it chases stable returns over periods as long as 30 years, Minister Mentor Lee Kuan Yew said.

The Singapore sovereign wealth fund, which manages more than $100 billion, bought stakes in the two banks as they sought to repair balance sheets after writedowns linked to U.S. subprime mortgages. GIC, as the fund is known, may hold the stakes for two to three decades, said Lee, who's GIC's chairman.

``If there are other banks of the quality of the two that we bought into, with the promise and the capabilities and inherent capabilities to recover, we have got the liquidity to meet it, to make such an investment,'' Lee, 84, said in a Bloomberg Television interview late yesterday. ``We will not rule it out.''
This week, Warren Buffett, the wealthiest man in the world, gets his chance to give his take on the credit crunch and the banking sector:
Buffett says U.S. in recession; banks to face pain
Sun May 4, 2008 7:51pm EDT

OMAHA, Nebraska (Reuters) - Warren Buffett on Sunday said he does not expect financial markets to panic as write-downs and losses for bad debts mount in the financial services industry, but said those losses were not over "by a long shot."

The world's richest person, who runs Berkshire Hathaway Inc, said at a press conference the Federal Reserve brought markets back from a precipice in March in helping broker JPMorgan Chase & Co's purchase of Bear Stearns Cos, which was on the brink of bankruptcy.

"There's going to be more pain, sure," Buffett said. "The action of the Fed, in terms of Bear Stearns, prevented in my opinion the contagion where you're essentially going to have bank runs on the investment banks ... The idea of a financial panic ... has been pretty well taken care of. That was a watershed event."

He added, though: "That doesn't mean the losses are over by a long shot ... We've looked at some of the investment banks, and it's clear some more losses are going to be incurred."
Is Lee Kuan Yew listening?

He showed he clearly didn't listen to Jim Rogers by making comments about GIC possibly buying into more banks. And he most probably isn't listening to Warren Buffett either. Hell, Lee doesn't even really understand Warren Buffett's investment philosophy.

Buffett was speaking at his annual shareholder meeting, and had more to add:
In a question-and-answer session at the shareholder meeting, Buffett said that from a risk perspective, some banks got ``too big to manage.''
Sound familiar? What's the biggest bank in the world? I think it's one of the banks that Lee Kuan Yew's GIC invested in: Citigroup! which according to LKY, has
"an enormous spread worldwide as a retail bank".
Well, now we really know what an "enormous spread" is - it's a liability.

To finish off, be sure that it's not just about words, but it's also about making prudent investment decisions. Warren Buffett, like LKY & GIC, had the chance to pick up a stake in the banks. But Mr Buffett chose differently:
And Mr Buffett said banks need better risk management. He said he recently considered the prospects of a large investment bank, which he did not identify, by reading its 270-page annual report. He said he highlighted 25 pages where he did not understand what he had read.

'I decided not to pick that one,' Mr Buffett added.
Lee Kuan Yew and GIC, however, decided to plonk billions into Citigroup and UBS, now two of the greatest loss making banks since the credit crunch began.

Who do you think made the correct decision? Mr. Buffett or Mr. Lee?

I seriously think there's no debate!

[Update - A reader has kindly informed:
"LKY is a senior advisor to Citigroup which means that he get millions off from Citigroup from deal, salary and payment every month, every year.
Please add this important disclosure as it might shred light why LKY is so eager to invest in frailing banks."]

Related Posts:
Lee Kuan Yew Ain't No Warren Buffett
GIC, UBS & Jim Rogers

Saturday, May 03, 2008

Is an Incompetent Cabinet What We Have?

As of the writing of this post, it has been no less than 65 days since Mas Selamat made his escape from the Whitney road detention center (WRDC). Most of the attention and writings in the blogosphere and the press to date surround the question of whether DPM Wong Kan Seng should resign from his post. Especially taking center stage has been the manner of the government's accountability and the way PM Lee Hsien Loong exonerated DPM Wong from any fault with regards to Mas Selamat's escape.

While these are certainly important and valid issues to raise, I fear that harping over whether WKS should resign is to risk losing the forest for the trees. Yes, WKS is the minister overseeing the ISD and the WRDC. But demanding his resignation because of the operational lapses at WRDC is a tough act, as WP Opposition leader Low Thia Khiang found out when he was forced into an embarrassing silence by the PM. This is simply because it is difficult to draw a direct link between Wong Kan Seng and the lack of grills on the window that Mas Selamat used to escape.

What, perhaps, is more telling about the competence of the government, and what netizens need to turn their attention to, is the fact that the cabinet ministers are now directly responsible for the recapture of Mas Selamat. There is no doubt about their responsibility for the coordination of National Security and there is no question that they are ultimately responsible for a failure to recapture Mas Selamat.

Mas Selamat has been at large for a lengthy period of time. If Mas Selamat is still in Singapore, then we seriously have to question the competence of our internal security forces for being unable to catch the man in tiny Singapore. If Mas Selamat has escaped our shores, again we have to question the competence of our internal security forces and border defences for letting the man escape.

Here is the low down on the main characters involved:

1. Prime Minister Lee Hsien Loong as the head of the government will bear overall responsibility for the coordination of the various ministries and government bodies responsible for the capture of Mas Selamat. The Prime Minister's Office oversees the National Security Coordination Secretariat (NSCS), tasked with national security planning and the coordination of policy and intelligence issues. A branch of the NSCS, the Joint Counter Terrorism Centre (JCTC), is a multi-agency centre which provides strategic analysis of terrorism-related issues to support policy-making and the development of counter-terrorism capabilities; as well as providing strategic early warning of terrorism-related developments.
2. Deputy Prime Minister Wong Kan Seng is the Minister for Home Affairs, and oversees the following government bodies directly related to Mas Selamat's recapture:
  • Singapore Police Force (SPF) - The SPF is the main agency tasked with maintaining law and order in the city-state. Part of the SPF is the Special Operations Command (SOC), a frontline unit grouping together various specialist units into a single strategic reserve of the regular forces to be called upon in any contingency and serious case of public disorder. They will no doubt be the frontline involved in the domestic search and recapture of Mas Selamat.
  • Internal Security Department (ISD) - The ISD's mission is to confront and address security threats, including international terrorism, foreign subversion and espionage. The ISD also monitors domestic counterterrorism, international counterterrorism, surveillance, apprehension of suspected militants or terrorists and protection of Singapore's national borders.
  • Immigration and Checkpoints Authority (ICA) - The ICA is in charge of the security of the territory of the nation and goods entering the country as well as foreigners entering the country. Conversely, it will also be in charge of preventing escaped terrorists from passing through the checkpoints under its jurisdiction.

3. Deputy Prime Minister Shunmugam Jayakumar is the Coordinating Minister for National Security. The Co-ordinating Minister chairs an inter-ministerial committee comprising the Minister for Foreign Affairs, the Minister for Home Affairs and the Minister for Defence. His responsibility is to oversee counter-terrorism in Singapore, by co-ordinating the NSCS, mentioned above.
4. Minister of Defence Teo Chee Hean is entrusted with overseeing the defence needs of the Republic of Singapore. The Ministry of Defence oversees the Singapore Armed Forces (SAF), of which at least 2 branches are directly involved:

  • The SAF Military Police Command is the military police unit of the Singapore Armed Forces, and whose men have been directly involved in the search for Mas Selamat.
  • The Singapore Navy will no doubt be tasked with patrolling the shores of Singapore to prevent the escape of Mas Selamat by water.


As you can see, there are direct links between ministerial responsibility and the recapture of Mas Selamat. Netizens, bloggers, MPs and the opposition would do well to focus on these links, rather than to have their attention diverted by the tenuous relationship between the WRDC escape and Wong Kan Seng.

The leadership of Government Singapore is to be truly tested in the coming days.

Let's see how well it holds up.

Related Posts:
Wong Kan Seng Off the Hook? Not So Fast. The Game Has Just Begun!