Morgan Stanley Still Bullish on Asian Cellcos.; Strong Buy on Unicom
Jul 05, 2001 - 10:52:07 HKT
Quamnet News Service
Morgan Stanley Dean Witter said Asian wireless stocks should extend gains after having outperformed their European peers by 17 percent and their US peers by 16 percent, justified by the continued visibility of growth in Asia's emerging markets and lower 3G fees in developed countries.
Developed markets, including Korea, Hong Kong, Australia and New Zealand, have demonstrated increases in ARPU (average revenue per user) from wireless data and reductions in subscriber acquisition expense, said Mark Shuper of Morgan Stanley in a research note to clients today.
Whether operators can raise returns from their existing subscribers becomes increasingly important since, as developed markets reach 60-80 percent cellular penetration, the market is realizing that marginal subscribers add progressively less value to the business, and come at increased cost, said Shuper.
Morgan Stanley expects British operators Orange and Vodafone to report 20 percent fewer net additions in the second quarter of 2001, compared with the first quarter, when they announce their financial results in late July.
Morgan Stanley maintains a "Strong Buy" for China Unicom Ltd. (0762) at HK$14, and an "Outperform" for China Mobile (Hong Kong) Ltd. (0941) at HK$41.80.
Notice there is no mention of PCCW or Telstra in this report. |
