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New Street Research

Research is provided by our team of experienced analysts. Our work is idea driven, based on independence of thought, sector expertise, and firmly focused on fundamentals and valuation of telecoms and internet names globally. New Street is headquartered in London with offices in New York, Singapore and Australia. 

New Street Research is an independent, partner-owned, research firm specialising in equity and debt research. Our equity research embraces the following sectors:

Pan European Telecom Services and Cable
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Global Emerging Market Telecoms
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We also provide debt research on:
Pan European Telecom Services and Cable

Equity Bottom-Up

Telekomunikasi Indonesia / Equity Bottom-Up

After a period of intense competition when returns fell to extremely low levels, the past two quarters have shown something of a recovery.Will it last?We think so as XL Axiata has moved to focus on a smaller client base of higher value customers, Indosat has regained share and Telkom is delivering decent profit&nbsp;growth. It is in all three players interest to maintain the new status quo. In the past Hutchison would have been a wild card but recently they have been less aggressive.&nbsp;We expect improvements top continue for the major three operators with PT Telkom (TLKM IJ) continuing to gain share. Longer term this dominance could become an issue for the government. &nbsp;One solution will be some form of joint operation for XL Axiata and Indosat. That could be in the form of spectrum sharing, joint network development in outlying areas all the way through to a full merger.&nbsp;We remain positive on all three stocks and expect relatively less competition going forward, even with new entrants such as SmartFren. Share prices are starting to respond. There is further upside to be unlocked from tower transactions, esp at Indosat and XL Axiata.

After a period of intense competition when returns fell to extremely low levels, the past two quarters have shown something of a recovery.Will it last?We think so as XL Axiata has moved to focus on a smaller client base of higher value customers, Indosat has regained share and Telkom is delivering decent profit&nbsp;growth. It is in all three players interest to maintain the new status quo. In the past Hutchison would have been a wild card but recently they have been less aggressive.&nbsp;We expect improvements top continue for the major three operators with PT Telkom (TLKM IJ) continuing to gain share. Longer term this dominance could become an issue for the government. &nbsp;One solution will be some form of joint operation for XL Axiata and Indosat. That could be in the form of spectrum sharing, joint network development in outlying areas all the way through to a full merger.&nbsp;We remain positive on all three stocks and expect relatively less competition going forward, even with new entrants such as SmartFren. Share prices are starting to respond. There is further upside to be unlocked from tower transactions, esp at Indosat and XL Axiata.

Thematic (Sector/Industry)

Fibre/cable firms (Altnets) have a strong growth dynamic in most EMs and the potential to create value through wireless entry using small cells technology. Many EM telcos face stagnant growth and declining returns in contrast to opportunities in fibre. Rising middle classes in Asia will pay to have fibre in the home. What has been seen as a niche product will have wider resonance as income levels rise. We believe investors are materially underestimating the potential demand for fixed broadband and for the revenues that result. In some ways this is analogous to concepts of addressable markets for mobile operators in the early days of GSM.As we have seen in Europe, we expect a number of the fibre/cable payers to be acquired by cellular firms look to both remove potential competition and to ensure a strong fibre network to deal with soaring data usage.&nbsp;&nbsp;

Fibre/cable firms (Altnets) have a strong growth dynamic in most EMs and the potential to create value through wireless entry using small cells technology. Many EM telcos face stagnant growth and declining returns in contrast to opportunities in fibre. Rising middle classes in Asia will pay to have fibre in the home. What has been seen as a niche product will have wider resonance as income levels rise. We believe investors are materially underestimating the potential demand for fixed broadband and for the revenues that result. In some ways this is analogous to concepts of addressable markets for mobile operators in the early days of GSM.As we have seen in Europe, we expect a number of the fibre/cable payers to be acquired by cellular firms look to both remove potential competition and to ensure a strong fibre network to deal with soaring data usage.&nbsp;&nbsp;

Emerging market fibre/cable operators (Altnets) are likely to outperform local wireless peers

Indonesia

PT XL Axiata Tbk provides a wide range of mobile telecommunications services in Indonesia.

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XL Axiata (EXCL IJ)

Indonesian Telcos: Turning the Corner

After a period of intense competition when returns fell to extremely low levels, the past two quarters have shown something of a recovery.Will it...

New Street Research

Emerging market fibre/cable operators (Altnets) are likely to outperform local wireless peers

Fibre/cable firms (Altnets) have a strong growth dynamic in most EMs and the potential to create value through wireless entry using small cells...

New Street Research

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