But that is only half the question, a better question would be "has the challenging outlook being reflected in the shares price, and has it overshoot to the downside?"
Personally, between the 2 companies, I would go for M1, notwithstanding the fact that its latest quarter results sucks. It blames the fall in net profits to higher depreciation and ammortization costs, but there is more than meets the eye.
If you look at 9 months result, there is indeed a significant increase in amortization and depreciation from 86,1mio to 93.3 mio, but if you look at 3Q results by itself, the difference in YoY depreciation and amortization is a mere 1.3 mio. The real cause is the reduction in ARPU. The lower handset sales while affect revenue will also cause higher cost of sales, so in a while, it will offsets one another.
Is reduction of ARPU worrying? You bet, since the competition has not even started.
I have assume the following in the face of a 4th Telcom.
1) It costs a 10% fall in ARPU to the price competition
2) It manage a 10% market share within 2 years, and cause 25% reduction in M1 mobile's market shares.
3) M1 continues to pay out 80% of earnings.
4) M1 is able to maintain its NP before the "war" begins
I expect a 5% dividend yield with the reduced earnings in 2018, and the price should be $2.2 I made a bid for today but did not get anything. But I will not bid anymore tomorrow.
Because as you can see, assumption 1 should be worse since without competition, it had already worsen by 10%.
Since I gave a damning report, why did I still say I chose M1 over SPH.
Any real fight with the 4th Telcom will only starts in 2018 earliest (10% market share), I assume of the 10% loss, half of it comes from M1. It might not be too bad.
I do think with a reduced earnings, M1 can sustain its operations albeit at a lower earnings. There are also 2 silver linings in M1 report, cash flow is still strong, and they are still growing their subscribers base. However, it is due to a higher penetration rate, and I suspect Singtel and STarhub will both report an increase in subscribers.
With SPH, it is not going to easy. It has already increase ASP, but its reduced dividends of 18 cents is already above 100% payout.
I do not think print will go the way of the dodo, but I seriously do not know the "bottom" and hence I cannot predict what price is a fair price since I cannot predict future earnings and hence yield.
However, SPH shares price's fall is not as bad as M1. If you ask me, SPH competition is 2 folds. One is direct advertising competition, such as google and other online platforms. Next, readership. If readership of papers continue to fall the attractiveness of advertising through print is going to be even lower.
SPH is in news business. Beside speed of updates in news, there is another issue of news print. I get news alert from 4 different news apps on my phone. If I want my finance news, I go for reuters and bloomberg, there is no need to wait for Straits Times to reproduce their news.
Then why is the price holding up relatively well. I think its due to the speculation of timing of injection of Seletar Mall into SPH reit and the possibility of special dividends.
However, I will watch M1 closely.