Taking a step back, an investment 10 years ago in Singapore telcos would have resulted in a gain of at least 70% of the initial capital solely from dividend payments. Chart 1 illustrates the lucrative dividend and investment returns from leading telcos in Singapore and Malaysia over this 10-year period.
SINGAPORE (Feb 18): Huawei Technologies Co and the 5G, or fifth-generation, mobile network has been grabbing headlines. US secretary of state Mike Pompeo is reported to have warned European countries that using technology from Huawei could harm their relationship with the US. In Singapore, M1 and Huawei have been in 5G trials together. If M1 is privatised, the spotlight is likely to fall on telecommunications companies such as StarHub and Singapore Telecommunications (Singtel).
Telcos are viewed more as dividend plays than growth stocks. Now, with 5G front and centre of newsflow, would capital expenditure for 5G eat into their cash flows and impact their dividends?
