Prepaid competition is expected to intensify with U Mobile offering unlimited free data for social networks. This can lead to higher subscriber churn but we believe the Big 3 will be able to defend prepaid ARPUs (evident since Sep 16) by focusing on good customer service (focusing on Malaysian prepaid segment and digitisation efforts). Maintain MARKET WEIGHT. Axiata is our top pick given mean valuation amid 10% yoy earnings growth and stable dividend outlook.

Source: UOB Kay Hian Research - 20 Feb 2017