AustraliaTelecomServicesandInternetTelecomServices,MediaandInternetEricPan,CFAAC+61290038207eric.pan@jpmorgan.comBloombergJPMAEPANJ.P.MorganSecuritiesAustraliaLimitedSeetheendpagesofthispresentationforanalystcertificationandimportantdisclosures,includingnon-USanalystdisclosures.J.P.Morgandoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.AsiaPacificEquityResearch10May2019AgendaPageTelecomServices4InvestmentRecommendations6MobileOverview7-13FixedOverview14-19Telstra20-23TPGTelecom24-26NextDC27-30Vocus31-33InternetInvestmentRecommendations34OnlineAdvertisinginAustralia35-37Seek38-41REAGroup42-45Domain46-48Carsales49-52NewsCorp53-55GlobalTelecomServiceComparisonSource:Company,Bloomberg,J.P.Morganestimates.Pricedasof10May2019.AustraliaTelecomOverviewMobilehasthreemajorplayersFixedhasfourmajorplayers17.3%ofindustryrevenue(MergedwithHutchison’s3in2009tocreateVodafoneHutchisonTelecomAustralia,50/50jointventure)53.1%ofindustryrevenue29.5%ofindustryrevenue(OptusisawhollyownedsubsidiaryofSingtel)67.3%ofindustryrevenue6.4%ofindustryrevenue15.0%ofindustryrevenue11.3%ofindustryrevenue1H19Mobilerevenueshare1H19FixedrevenueshareSource:Companyreports,J.P.MorganestimatesSource:Companyreports,J.P.MorganestimatesVocusTPGTelstraTelstraInvestmentOutlookMobile:Opportunities:–Australiaremainsoneofthemoreattractivemobilemarketsintheworldduetoitsthree-playerindustrystructure.–Postpaidsegmentisexpectedtocontinuetobenefitfromstrongpopulationgrowth,prepaidtopostpaidmigrationandincreasingdatausage,adding300-400ktotalmobilesubscribersannually.Risk:–PendingcourtrulingforVodafoneandTPGmergerhasthepotentialtocreateastronger3rdmobileplayerbutallbuteliminatesa4thnewentrantFixed:Opportunities:–Australia’sfixedbroadbandmarketisoneofthemorelucrativemarketsintheworldduetom...
