SingTel will have to offer its BPL content to rival StarHub customers after the Ministry for Communications and Information (MCI) rejected its appeal for a stay of the Media Development Authority (MDA) ruling for the cross-carriage of the closely followed football content. However, the subscription comes with a price – new subscribers will have to fork out S$59.90 (before GST) for the stand-alone package, while existing mioTV subscribers can continue with the existing pricing of S$34.90 (before GST). While we may see some migration of subscribers from mioTV to StarHub’s cable TV platform, we do not expect a huge number. We maintain our NEUTRAL rating on the sector. While we also maintain our HOLD rating on SingTel, we downgrade StarHub to SELL.
Stay on cross-carriage of BPL rejected
The Ministry of Communications and Information (MCI) has rejected SingTel’s appeal against the Media Development Authority’s (MDA) directive to cross-carry Barclay’s Premier League (BPL) live matches for the 2013-2016 seasons. Recall that SingTel had negotiated for the BPL rights on a non-exclusive basis; but MDA deemed the conditions made it onerous for StarHub to negotiate for its own rights, thus triggering the Cross Carriage Measure. As such, SingTel is required to make the necessary arrangements for the content to be carried on StarHub’s cable TV network. Understandably, StarHub has hailed the decision, calling it a “significant outcome”.
New pricing of BPL
Meanwhile, SingTel has just unveiled its pricing for BPL at S$59.90 (before GST) per month for new subscribers (both SingTel and StarHub) for its standalone, nine-channel package. mioTV does not have to cross carry channels included in its BPL Gold Packs which are currently being maintained at S$64.90 (includes BPL, sports, movies and family entertainment). We also understand that existing mioTV subscribers are not affected and they will continue to pay S$34.90 (before GST) for the stand-alone package as well.
Minimal impact on SingTel
In light of the latest pricing announcement, we do not expect to see a significant migration of subscribers away from mioTV to StarHub’s cable TV platform, given that it will still be cheaper for existing subscribers to continue to watch BPL on the mioTV platform. While many perceive StarHub’s platform as being more stable in its delivery, the price hurdle may prove to be quite a stumbling block; there may also be implementation issues still to be worked out. And even if there are migrations, StarHub subscribers will be paying the fees directly to SingTel.
Maintain NEUTRAL on sector
Overall, we continue to remain NEUTRAL on the sector, as dividend yields are decent but not attractive at current levels. We also maintain our HOLD rating in SingTel with an unchanged fair value of S$3.83; but we downgrade StarHub to SELL, given that the stock has rallied way above our fair value of S$3.82 in recent weeks.
The Ministry of Communications and Information (MCI) has rejected SingTel’s appeal against the Media Development Authority’s (MDA) directive to cross-carry Barclay’s Premier League (BPL) live matches for the 2013-2016 seasons. Recall that SingTel had negotiated for the BPL rights on a non-exclusive basis; but MDA deemed the conditions made it onerous for StarHub to negotiate for its own rights, thus triggering the Cross Carriage Measure. As such, SingTel is required to make the necessary arrangements for the content to be carried on StarHub’s cable TV network. Understandably, StarHub has hailed the decision, calling it a “significant outcome”.
New pricing of BPL
Meanwhile, SingTel has just unveiled its pricing for BPL at S$59.90 (before GST) per month for new subscribers (both SingTel and StarHub) for its standalone, nine-channel package. mioTV does not have to cross carry channels included in its BPL Gold Packs which are currently being maintained at S$64.90 (includes BPL, sports, movies and family entertainment). We also understand that existing mioTV subscribers are not affected and they will continue to pay S$34.90 (before GST) for the stand-alone package as well.
Minimal impact on SingTel
In light of the latest pricing announcement, we do not expect to see a significant migration of subscribers away from mioTV to StarHub’s cable TV platform, given that it will still be cheaper for existing subscribers to continue to watch BPL on the mioTV platform. While many perceive StarHub’s platform as being more stable in its delivery, the price hurdle may prove to be quite a stumbling block; there may also be implementation issues still to be worked out. And even if there are migrations, StarHub subscribers will be paying the fees directly to SingTel.
Maintain NEUTRAL on sector
Overall, we continue to remain NEUTRAL on the sector, as dividend yields are decent but not attractive at current levels. We also maintain our HOLD rating in SingTel with an unchanged fair value of S$3.83; but we downgrade StarHub to SELL, given that the stock has rallied way above our fair value of S$3.82 in recent weeks.
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