Starhub bottomed out?

30 May 2018, Starhub in a StraitsTimes article mentioned that they will be dropping out 11 TV channels from 30 Jun 2018 onwards.

Starhub's stock drop 4.5%.

Failed negotiation
Starhub's portfolio of educational channels will no longer be available to viewers due to a failed negotiation between Starhub and Discovery because it is not willing to pay a fair value for the programmes.

Types of disruption
Technology and piracy could be a part to play. Internet TV like Netflix and Youtube have disrupted the television business because of the availability of programs. Speed of internet also makes it faster to view the video clips and movies online. Piracy still exist because it markets itself as a cheap alternative to viewing starhub channels. A $45-$60 dollar a month subscription from Starhub could only cost you $8 per month with a pirated TV box, which is able to access most of Starhub's channel.

With multiple disruptions to its TV business, Starhub can no longer command a premium price for its TV subscriptions. Therefore, it is understandable why Starhub is not be willing to pay a premium to keep its educational portfolio.

Moving forward
Starhub can replace these channels with cheaper alternatives or to decide to slowly wind down their TV business and invest in new businesses to be able to sustain shareholders returns.

Source: Maybank Kim Eng - ketrade platform

10 year historical price chart

Starhub trading at close to crisis levels

Source: https://www.businesstimes.com.sg/companies-markets/discoverys-portfolio-of-11-tv-channels-to-be-dropped-from-starhub-after-june-30

M1, how low can it get?

Singapore telco M1 share price is plunging downwards. At $2.28, it is at 5 years low with dividend yield of 6.5%. Shareholders who buy M1 before 12 Apr 16 will be entitled to the payout of $0.083 per share.

5 Largest shareholding of M1

• Axiata 28.31%
• Keppel Corp 19.09%
• SPH 13.28%
• Colonial First State Asset Management (Australia) Limited 2.95%
• Macquarie Investment Management Limited 0.75%

Although there are talks of a 4th telco coming in, M1 had been in the telco business for a long time, and these telco assets were built up and maintained over the years.

M1 latest FY2015 showed a 1.5% growth, and despite that share price had been dropping continuously. 

M1 CEO Karen Kooi mentioned that with Netflix entering the Singapore market would provide a level playing field in the tv business. 

Although Singtel signed a strategic partnership with Netflix, it is still likely that M1 could be in talks with them to do some tie-up as well.

Source: http://www.channelnewsasia.com/news/singapore/singtel-netflix-sign/2425958.html

M1 does not own tv assets at the moment as compared to starhub and Singtel and if they are able to do tie up with Netflix, costs incurred would likely be lower than singtel and starhub.

M1 target price $2.7

With news that IDA will offer a 60% discount, a forth telco entry sparked a big drop in M1 price. This 60% discount is restricted to new bidders only.

Source: http://www.todayonline.com/singapore/ida-offer-spectrum-lower-price-facilitate-entry-fourth-telco

The IDA said that it does not see the market as being able to support more than four players.

Even with news that a forth telco may be coming into the market, M1 had ramped up its efforts to capture market share by offering the cheapest mobile plans. This plans may lure in more subscribers in attempt to discourage a forth telco entrant. However, there are still no news of who will be the forth telco yet.

Source: http://www.straitstimes.com/tech/m1-rolls-out-cheapest-mobile-plans-aimed-at-consumers-who-do-not-need-handset-upgrade

What price to enter M1 given its attractive dividend yield of 6% at current closing price of 3.05?

5 year historical chart

Source: KE Trade

Trend lines intersect at $2.7
Target entry price: $2.7