SingTel trims sales outlook on more cautious biz spending

Summary:The telco expects revenue declines for both group consumer and enterprise segments to be slightly worse than forecasted a quarter ago. Going forward, a focus will be on driving customer growth in Australia.

Southeast Asia's largest telco has taken a more conservative outlook for its full year revenue, following increased signs of a more cautious business environment and spending.

SingTel's third quarter profit rose 6 percent to S$872 million, lifted by a stronger showing from regional associates, according to its press release. However, this was on the back of a 7 percent drop in operating revenue to S$4.6 billion on-year, which was attributed to a sharp decline in the Australian dollar.

singtel associates
SingTel's regional associates helped lift Q3 earnings.

Pre-tax earnings from the regional mobile associates increased 11 percent to S$506 million, and was further boosted by favorable currency movements. This quarter, the Australian Dollar, Indonesian Rupiah and Indian Rupee declined 9 percent, 18 percent and 12 percent respectively against the Singapore Dollar, said SingTel.

The group overall saw its combined mobile customer base grow 9 percent or 40.9 million in the year to cross the half billion mark, it added. Australia continued to be challenging market, with its subsidiary Optus losing approximately 64,000 mobile customers in the period.

Some of the key brightspots were mobile customers in its main Singapore and Australia markets upgrading their data plans for a faster connection, paving the way for higher average revenue per user.

"We are pleased with the results from the strengthening of our core business, and going forward, we will focus on driving customer growth in Australia," said Chua Sock Koong, SingTel Group CEO.

Bracing for sales headwinds

For the rest of the year, SingTel is bracing for revenues to be lower than initially projected in the previous quarter, though it is keeping its overall outlook for the financial year ending March 2014.

Based on sales trends in the first nine months and the currency impact of the Australian Dollar, SingTel now expects revenue for its consumer group to decline by a low double digit, instead of a decline by a high single digit level.

For its enterprise group, SingTel is predicting a drop by a low single digit, instead of initial forecasts of stable revenue.

Topics: Telcos, Networking, Optus, Singapore, SingTel

About

Loves caption contests, leisurely strolls along supermarket aisles and watching How It's Made. Ryan has covered finance, politics, tech and sports for TV, radio and print. He is also co-author of best seller "Profit from the Panic". Ryan is an editor at ZDNet's Asia/Singapore office.

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