Singtel digital business doubles revenue

Singtel's Digital Life business segment saw operating revenue increase by 109 percent to SG$273 million over the quarter, as Amobee, HOOQ, and DataSpark made inroads.
Written by Corinne Reichert, Contributor

Singtel has reported what it deemed "resilient" financial results for the quarter ended June 30, and while cybersecurity, mobile, internet, ICT, and managed services all rose slightly, it was the company's digital business segment that made the most gains.

Singtel's "Digital Life" business segment includes digital marketing company Amobee, over-the-top video provider HOOQ, and analytics provider DataSpark.

Digital Life's quarterly operating revenue increased by 108.8 percent to SG$273 million, or by 91 percent to SG$293 million when taking intercompany eliminations into consideration.

"Group Digital Life's revenue jumped 91 percent, driven by Amobee's strong performance in social and media advertising, and first-time revenue contribution from Turn, a global technology platform for marketers and agencies, which was acquired by Amobee in April 2017," Singtel said.

"With the integration of Turn, Amobee is realising synergies and winning new companies such as KIA, Spotify, and Constellation Brands as clients.

"Mobile video streaming service HOOQ announced a line-up of original local productions for audiences in the Philippines and Indonesia."

For the quarter ending June 30, Singtel reported total net profit of SG$892 million, down 5.6 percent year on year from SG$944 million, on earnings before interest, tax, depreciation, and amortisation (EBITDA) of SG$1.27 billion, up 2.7 percent from SG$1.24 billion.

Singtel recorded operating revenue of SG$4.2 billion, up 8.3 percent, with the telco also attributing its increase in revenue to cybersecurity -- despite its Trustwave business recording SG$13 million in negative EBITDA -- after launching the Cyber Security Experience during the quarter.

Cybersecurity brought in SG$110 million in operating revenue, up 0.6 percent.

Singtel CEO Chua Sock Koong pointed towards a "more challenging business environment".

"This speaks to the resilience of our core consumer business and the investments we've made in the digital space in our efforts to grow new businesses," she said.

"Strategic investments in networks and customer experience will lay the foundation for future growth. The group's customer base grew another 3 percent in the quarter to 655 million customers across the region."

According to Singtel, its net profit would have been up by 3.4 percent if not for Indian telco Airtel -- earlier this year named the fastest telco in India by OpenSignal -- which dropped by 41.6 percent in its pre-tax contributions.

Citing "intense competition in India", Singtel said, "Airtel's pre-tax profit contribution dropped 42 percent despite strong cost management and lower depreciation in Africa. Notwithstanding the competition, Airtel strengthened its revenue market share leadership in India."

Airtel gained over 20 million mobile customers over the year to a total of 362.7 million customers as of June 30, 280.6 million of which are in India.

As of June 30, Singtel had 4.13 million mobile customers in Singapore, up slightly from 4.1 million a year earlier.

"The group has made substantial investments in network and spectrum to capture higher mobile data consumption," Singtel said.

"In Singapore, Singtel will deploy 800Mbps LTE mobile speeds at selected high-traffic locations across the country by the end of August 2017."

Singtel had spent SG$563.7 million during Singapore's spectrum auction in April to acquire 4x 10MHz in the 700MHz band, 3x 5MHz in the 2.5GHz band, and 2x 10MHz in the 900MHz band.

For the quarter, mobile communications brought in SG$1.479 billion of operating revenue, up 1.6 percent, while data and internet contributed SG$836 million, up 6.4 percent; managed services SG$579 million, up 13.1 percent; ICT SG$705 million, up 6.4 percent; and pay TV SG$73 million, up 3.5 percent.

Business solutions operating revenue was SG$126 million, down 16.2 percent; national telephone SG$251 million, down 6.1 percent; and international telephone SG$112 million, down 12.5 percent.

Singtel has been focused on future proofing its mobile networks, earlier this week announcing that it will be rolling out a Cat-M1 Internet of Things (IoT) network across Singapore by the end of next month, with the telecommunications company also looking to launch a narrowband IoT (NB-IoT) network in future.

Singtel said it will "harness its cybersecurity expertise" in ensuring that any businesses connecting to its IoT network will be secure.

Ericsson and Singtel in January launched 450Mbps speeds across the latter's entire 4G network in Singapore for customers with compatible smartphones, with the companies announcing attaining speeds of up to 1Gbps in a trial.

In July, Singtel then began its LTE-A rollout on Orchard Road, which it said would be extended to Raffles Place and Clarke Quay before the end of August. According to the telco, it was able to attain speeds of 800Mbps via triple aggregation, 4x4 MIMO, and 256 Quadrature Amplitude Modulation (QAM) using Ericsson technology.

Ericsson and Singtel have additionally been working on a "blueprint" for 5G deployment across Singapore since January 2015, and completed a live trial of License Assisted Access (LAA) 4G in July last year.

In February last year, Singtel and Ericsson also announced their collaboration on enabling Singtel's 4G network for IoT, including a trial of NB-IoT technology during 2016. In March, they then unveiled an IoT ecosystem dubbed the Assured+ Consumer Connected Device Solution for operators, networks, and devices.

Singtel in May announced a full-year net profit of SG$3.87 billion, up 2.4 percent, on EBITDA of SG$5.01 billion for the year, down 1.5 percent, and operating revenue of SG$16.96 billion, down 1.5 percent.

Its Australian subsidiary Optus on Friday announced a quarterly net profit of AU$171 million, down from AU$173 million, on revenue of AU$2.1 billion, up 4.8 percent, and EBITDA of AU$662 million, up 2.6 percent.

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