It's increasingly difficult for telecom service operators in mature
markets to post exciting top line growth, but that's not to say that SK Telecom (NYSE:SKM)
doesn't have something to offer investors. I don't believe that South
Korea's leading mobile services provider is likely to grow revenue at a
long-term rate much above 3%, but I do think ongoing conversions of
subscribers to LTE will support ARPU and margins. I likewise believe
that the Korean government's willingness to hold the line on a law
limiting subsidies will ultimately be good for margins for the industry.
SK
Telecom doesn't appear radically undervalued to me today, but I
wouldn't expect such a large and well-followed stock to trade at a wide
discount. That said, I do believe the shares ought to trade closer to
$30, and that the aforementioned boosts to ARPU and margins will wind up
in shareholders' pockets in the form of higher dividends.
Continue here to the full article:
LTE Penetration And Restricted Competition Should Benefit SK Telecom
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