+ Re-opening boost for Singapore mobile. Mobile service revenue increased 13% YoY to S$431mn from higher ARPU (+9%) and subscribers (4%). Increased travel boosted the lucrative roaming revenue. There is further room to recover as current roaming is 60% of pre-pandemic levels. Another initiative to boost ARPU is to remove the lowest-tier pricing plans.
+ Continued strength in Bharti earnings. Earnings contribution from Bharti rose 44% YoY to S$213mn. Earnings benefited from higher ARPU (+8% YoY), increased data usage and strong 4G subscribers (+12%). However, the pace of growth should stabilise as ARPU is flat QoQ at Rp193.
– Challenging profitability at Optus. Excluding the one-off NBN migration revenue, 2H23 EBITDA is up 1.6% YoY to A$1bn. Bulk of the revenue growth in 2H23 was from low margin equipment sales that rose 16% to A$839mn. We believe Optus is struggling to achieve any economies of scale. Indirect (non-revenue related) cost is rising in line with service revenues. The A$4.5bn of capex over the past three years has so far not generated much additional growth in revenue, in our opinion*. Meanwhile, depreciation and interest expenses are stubbornly high despite the de-gearing exercise from the sale and leaseback of its passive infrastructures completed in FY22.