SingTel restructure sees Optus split

update Optus' parent SingTel has announced an organisational restructure that breaks the firm into three different groups servicing different customer segments, with parts of Optus to subside within those units. However, Optus will still remain a single entity.

The company has watched the rise of online content and services giants, such as Apple and Google, and decided to make a change to allow it to transform past being mainly a carriage provider.

SingTel will now be made up of a Consumer Group, a Digital Life Group and an ICT Group, with Optus CEO Paul O'Sullivan heading up the Consumer Group.

The Consumer Group will look to provide communications and technology to consumers and small businesses across Asia Pacific, including Optus' consumer customer base. The Digital Life Group will go beyond communications to provide other services via bundles and add-ons, and will be headed up by SingTel's Singapore CEO Allen Lew. The ICT Group will provide products to SingTel's enterprise customers, including Optus Business customers. Lew will head up this group until a permanent group leader is found.

The CEOs all report to SingTel group CEO Chua Sock Koong directly. The SingTel CIO, CFO, HR director and chief strategy officer are all outside of the three groups, also reporting directly to Chua.

The idea is to use SingTel's scale — it services 400 million mobile customers — to achieve superior and cheaper product and platform development across regions, as opposed to in a geocentric way.

It makes sense, for example, if rolling 4G out across multiple countries, to only go through the learning process once. It would mean better bargaining power with vendors for devices, too, said Optus CEO Paul O'Sullivan.

Despite assigning different parts of Optus to various business units, Optus would remain one company, and report as such, according to O'Sullivan. He maintains his position as Australian CEO, along with his new role as head of the Consumer unit.

Three executives have been appointed to lead the new business units in Australia, who will report to the group heads. Optus' new COO Kevin Russell will be CEO of the Australian Consumer unit, while John Paitaridis will be the MD of Optus Business, reporting to Lew for the ICT Group, and digital media director Austin Bryan will report to Lew for the Digital Life Group.

Although the new structure might make the company able to operate with less staff, there are no intentions at this point to cut staff, according to O'Sullivan.

The structure, which comes into effect on 1 April 2012, is intended to create an extended ecosystem to capture customer dollars. The company hopes to use the restructure to drive three of its key objectives:

• Reinventing SingTel's core carriage business
• Creating programs that drive growth, using the core
• "Turbo-charging" regional ICT services capabilities.

"We now see some of the largest and most exciting opportunities that have ever existed in this industry," Chua said. "The changes to how we organise ourselves are necessary, in order to align our people and resources to sharpen our focus and take advantage of these opportunities."

SingTel also hopes to be first to innovate products, aiming to become a key player in the multimedia industry over the next five years, and tapping into content and device sales. IT services is another area in which SingTel believes global cooperation would foster, naming Optus' ANZ Bank deal as a case where cross-regional collaboration has been beneficial.

The company's Innov8 venture capital (VC) fund, which has exposed it to 300 start-ups since it began, will also be part of the Digital Life Group. O'Sullivan said that the scale of the new global focus will allow the company to invest in many more start-ups.

SingTel also announced the purchase of an online advertising company called Amobee for US$321 million, which it hopes will make it the leading marketing player in Asia, and one of the top three globally.

This will allow Optus to send targeted advertisements to consenting customers on their phones, which the company stressed will fully obey privacy requirements. A trial has already begun in Australia.

SingTel hopes that its 400 million customer base will allow it to think more globally, enabling it to make other such acquisitions.

Updated at 4.19pm, 5 March 2012: added information on SingTel's plans for the new structure, and how Optus will operate in regards to the new business units.