+ Volume and price rebound in mobile revenue. 3Q22 mobile revenue rose 8.7% YoY, the fastest rate of growth since FY07. The rebound in ARPU from roaming was expected as borders re-open but the rise in subscribers by 26,000 was above expectations. Subscriber growth was from no-contract SIM-only giga! plans.
– Surge in operating expenses. 3Q22 operating expenses jumped almost 20% YoY to S$547mn. Higher cost from EPL content and IT investments. These costs are expected to continue into 4Q22 as part of the DARE+ transformation roadmap.
Management lifted FY22e revenue guidance by 2-5% points to 12-15% revenue growth (PSR +11.8%). Capex for FY22e was also lowered by 2% points to 5-7% of revenue, but the service EBITDA margin was unchanged at least 20% (PSR: 20.6%). This implies a 14% margin in 4Q22. Higher costs in 4Q22 will stem from marketing and promotion, especially for the World Cup and new services in 2023 plus the full impact of EPL content cost. There are possible write-offs from the Strateq healthcare business and legacy IT systems.