Core Insights - Singapore telecom companies, including Singtel and Starhub, are transitioning from traditional telecom services to digital infrastructure and enterprise solutions as their growth in mobile and broadband has stagnated [1][3][14] Telecom Industry Overview - Mobile subscriptions in Singapore are projected to grow at a compound annual growth rate (CAGR) of 4.3% from 2021 to 2025, but average revenue per user (ARPU) has declined by 30% from 2018 to 2023 [2] - Despite the decline in ARPU, Singtel and Starhub are expected to invest a total of S$1.93 billion in capital expenditures for 5G [2] Singtel Financial Performance - In Q1 FY2026, Singtel's revenue remained stable at S$3.4 billion, with underlying net profit increasing by 14% year-on-year to S$686 million, driven by strong profit growth from regional businesses [5] - Singtel's capital expenditure plans include S$1.7 billion for core business and an additional S$0.8 billion for new initiatives by 2028 [7] - Singtel's recent core dividend of S$0.123 per share represents an 82% payout ratio and a dividend yield of approximately 2.9% [7] Starhub Financial Performance - Starhub's revenue for the first half of 2025 was stable at S$1.1 billion, but net profit dropped 42% year-on-year to S$47.9 million due to a one-time penalty [9][10] - Starhub's enterprise segment grew by 6.8% year-on-year, supported by strong cybersecurity services [10] - Starhub is guiding for a dividend of at least S$0.06 per share for 2025, with a current dividend yield of 5.2% [11] Challenges and Investment Considerations - The Singapore telecom industry faces intense competition, and 5G monetization is not expected to yield significant returns in the near term [12] - Singtel's capital expenditure is projected to be around 12% of total revenue, while Starhub's is expected to be 10% [12] - Singtel's current price-to-earnings (P/E) ratio is approximately 22 times, lower than its three-year average of 27.6 times, while Starhub's P/E is around 16.8 times compared to its three-year average of 17.2 times [13]