My Recent Purchase's Share Price just went Down today. :(

If you have read the earlier post about my April's purchase (link here), you would know I just bought Singtel's shares last week at $3.87. As of today, it is down to $3.82 (-1.55%). Alamak, Simidaiji (Oh dear, what happen)?

I quickly check for possible Singtel's announcement that could trigger the price drop. There's none. Next I went to Investing Note forum where the stock experts (武林高手) gather and give stock guidance and coverage. Within 1 minute, I got my answer. TPG is the culprit!

Next, I googled for TPG news. From what I have found, TPG is planning to build their own mobile network in Australia. It is currently operating as a Mobile Virtual Network Operator (MVNO) and leasing mobile network resources from Vodafone in Australia. They have successfully bid for 2 x 10 MHz spectrum for $1.3B. Telstra, the largest mobile operator in Australia's share price went down by 6% at market open! Optus which is Singtel's subsidiary and second largest operator in Australia did not secure any spectrum during this bidding war. Source: here

My Thoughts On TPG

From what I understand, TPG does not have the experience of building and maintaining a mobile network. They will sure offer high salaries to recruit expertise in these areas. They need to invest a lot in spectrum bidding, mobile infrastructure and skilled expertise. So how low can their subscription plan go in order to compete with the existing Telcos? For mobile subscribers who need reliable network coverage for work and leisure, would they jump ship to TPG? Take note TPG can only operate on 4G spectrum so if the network coverage is poor in that area, the phone signal will not switch to 3G. Just no network coverage. If it's 4G core network goes down, any redundancy? Do they have more cash to burn for 5G mobile network? I wander how's Circles.Life doing. It is riding on M1's 4G network so at least there is some sort of quality assurance.

My Thoughts on Singtel

Back to Singtel. I took a look at Singtel's revenue from it's subsidiary, Optus. It has been going downhill. The impact from TPG could made a further dent in it's earnings in a few years time. I hope the company has some strategies to counteract moving forward.

Would I load up on Singtel? The price will need to go lower to entice me. Even if the price drops to $3.70, the dividend yield would be around 4.73% which is not a big jump to my current yield. I would wait for the analysts to give their expert views on Singtel before making any decision on my next purchase price. 😛