RHB favours Indonesian telco stocks most on strong data usage

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JAKARTA (Sept 13): Indonesia is RHB’s only overweight in Asean-4 telecommonucations, based on its undemanding valuations and superior growth prospects.

* 2Q mobile service revenue grew more in Indonesia than in Malaysia, Singapore and Thailand; due to strong mobile data usage, data yield expansion and seasonality factors, such as Eid al-Fitr holidays, analysts Jeffrey Tan, Michael Wilson Setjoadi and Kasamapon Hamnilrat write in report dated Sept. 13

** Preferred pick is XL Axiata due to M&A news that should help drive sentiment

* Singapore telcos still suffering from competition as number of mobile virtual network operators has more than doubled to 7 over past year

** TPG Telecom has “slim” chances of creating further value after service fully commissioned by end-2019

** Preferred pick is Singtel

* Malaysian telco industry awaits fresh catalyst following end of merger talks between Axiata and Telenor

** Attention will shift to RM21.6b National Fiberisation and Connectivity Plan

** Prefers infrastructure and network service providers Time dotCom and OCK

* Thai telcos are monetizing data better; positive data trend expected to continue in 2H

** Top pick is Advanced Info Service