Singtel Group climbs above 700 million mobile customers

Singtel Group added 67 million mobile customers across its global brands during FY18, with the telco reporting SG$5.5 billion in total net profit for the financial year.
Written by Corinne Reichert, Contributor

Singtel has announced reaching 706 million mobile customers across its global brands during the 2017-18 financial year, up from the 638.1 million announced a year ago.

As of March 31, Singapore's largest telecommunications carrier had a total of 4.085 million mobile customers, 1.6 million prepaid and 2.5 million post-paid; its Australian brand Optus had 10.106 million; Airtel had 304.2 million in India, 89.3 million in Africa, and 2.3 million in South Asia; Telkomsel had 192.8 million; AIS had 40.1 million; and Globe had 63.3 million.

"Our regional associates continued to win new customers and capture strong data growth, reaping the benefits of sustained investments in network and spectrum," Singtel CEO Chua Sock Koong said.

"Competition remains intense in India, but the right regulatory policies and sector consolidation should lead to a more stable market structure in the mid term. In Indonesia, Telkomsel continues to expand its network to create significant capacity and grow its digital business.

"We are accelerating collaborations with our regional associates to build an ecosystem of digital services by leveraging the group's strengths and customer base across 21 countries."

In Singapore, Singtel held an overall mobile market share of 48.9 percent, although average revenue per user (ARPU) dropped from SG$67 to SG$61 over the year for post-paid mobile services and remained at SG$18 for prepaid.

In response to how the company is preparing for TPG to launch mobile networks in both Singapore and Australia, the chief executive said Singtel differentiates itself by going "beyond just providing basic communications".

"As a group, we never take competition lightly, and we probably have quite a fair bit of experience taking on competition, whether they are global giants, with the likes of Vodafone, or startups," she told media during Singtel's FY18 financial results call on Thursday.

"Both in Singapore and Australia, we have reviewed our position quite closely, and we certainly believe we include giving compelling value to our customers -- notice I said value, I didn't say price -- because clearly customers look at us, while price is very important, to provide a whole range of things.

"In Singapore, the investments that we have made in networks, particularly in-building coverage, that clearly puts us in the superior network position. It is also the kind of experience we give to our customers, a multi-channel experience ... it's also around what you can get from us beyond communications services. Allen [Lew, Optus CEO]'s content strategy, the Premier League, the sports content that you get across Singapore and Australia, the IoT smart devices that we are also rolling out across the two countries, insurance products for handsets etc."

For the full year, Singtel reported total net profit of SG$5.5 billion, up 41.5 percent from SG$3.9 billion, on operating revenue of SG$17.5 billion, up from SG$16.7 billion last year.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) were SG$5.1 billion, up from SG$4.998 billion last year, which Singtel attributed to its digital businesses along with growth in its mobile and fixed broadband customer base in Australia.

The rise in net profit was boosted by SG$2 billion from its divestment of NetLink Trust, Sock Koong said. Net profit for the fourth quarter was down by 19 percent, however, which the company said was due to weaker results from Airtel and Telkomsel.

"Airtel's results were impacted by intense competition with very aggressive pricing led by a new player and further aggravated by mandated cuts in mobile termination rates in India," the company explained in its results report.

"Last month, Airtel announced the merger of Indus Towers and Bharti Infratel to create the largest tower company in the world outside of China, subject to regulatory and shareholder approvals."

In total across its consumer business, Singtel made SG$9.8 billion in operating revenue, up from SG$9.6 billion.

The Singapore Consumer arm was down slightly, however, decreasing by 2.7 percent to SG$2.3 billion in operating revenue. Mobile communications was down by 3.3 percent to SG$1.255 billion; sale of equipment was down 2.2 percent to SG$307 million; fixed broadband was up 4.1 percent to SG$230 million; residential pay TV was down 2.1 percent to SG$219 million; international telephone was down 15.3 percent to SG$136 million; and national telephone was down 3.9 percent to SG$109 million.

Singtel TV brought in SG$241 million in revenue, down 2 percent, as residential TV customers dropped from 408,000 to 395,000 while ARPU remained the same, at SG$41 per month.

Across fixed broadband, Singtel said it had 619,000 lines as of March 31, with 599,000 fibre broadband lines for a fibre broadband market share of 47.1 percent in Singapore.

Group enterprise made SG$6.625 billion in operating revenue, up slightly from SG$6.6 billion. A breakdown of enterprise revenue saw managed services grow by 8.2 percent year on year to bring in SG$2.5 billion, SG$530 million of which was from cybersecurity services; business solutions drop by 10.2 percent to SG$593 million; ICT grow by 4.1 percent to SG$3.1 billion; data and internet drop by 2.6 percent to SG$1.7 billion; mobile communications fall by 2.5 percent to SG$969 million; national telephone fall by 5.1 percent to SG$450 million; sale of equipment rise by 15.6 percent to SG$216 million; and international telephone fall by 20.1 percent to SG$167 million.

The 16 percent growth in cybersecurity revenue was attributed to "strong growth in managed security services and steady progress in the Asia-Pacific region", Singtel said, with the telco jointly forming a Global Telco Security Alliance last month with Etisalat, SoftBank, and Telefonica.

"The alliance's global footprint and combined resources, including 22 Security Operation Centres and 6,000 cybersecurity experts, will better protect enterprise customers that operate across borders," Singtel said.

"The group consolidated its cybersecurity operations across Singtel, Trustwave, Optus, and NCS into a single global unit to strengthen and scale the cyber business to accelerate growth."

Singtel additionally signed a memorandum of understanding (MOU) with VMware International during the most recent quarter, saying it would assist in Asia-Pacific enterprise digital transformation.

"A 'virtual sandbox' will be set up for enterprises and startups to develop and test their digital solutions in a cloud environment, while tapping on solutions and support from Singtel and VMWare," the company added.

Singtel's Digital Life business, meanwhile, brought in SG$1.1 billion in operating revenue, doubling last year's SG$539 million.

"GDL has three key businesses -- digital marketing (Amobee), regional premium OTT video (HOOQ) and advanced analytics and intelligence capabilities (DataSpark), and it also serves as Singtel's digital innovation engine through Innov8," Singtel said.

During the year, Singtel also announced partnering with Ericsson to roll out a gigabit-speed mobile network and a commercial narrowband-Internet of Things (NB-IoT) network, as well as establishing a SG$42.4 million Cognitive and Artificial Intelligence Lab for Enterprises.

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