Market is overly worried about threat from NBN. There are three key factors here: (i) Porting limit of only 2400 connections per week for NetCo implies that full migration will take at least 8 years; (ii) NBN is not reaching fully inside corporate buildings due to resistance from building owners; (iii) Most importantly, SingTel gets 75% of NetCo revenue for allowing NetCo access to its network.

Optus is facing intense competition. Both Telstra and VHA have launched aggressive iPhone 4S plans, forcing Optus to follow suit. All telcos are offering extra subsidy of A$100 on mid-tier plans. Also potential cut in mobile termination rate in 2012F may have minor adverse impact.

Issues with Telkomsel & Bharti. Possible scenario of an all-cash sale of Telkomsel could be positive while other scenarios could be neutral to slightly positive. Meanwhile, Bharti is set for growth with Africa as the key driver; however street may be overly optimistic on India.

Upgrade to BUY with SOP based TP of S$3.43. The key change is higher valuation for Telkomsel in the light of improved competitive environment in Indonesia. Weaker regional currencies versus SGD would be the key downside risk to our TP.