SingTel's regional expansion pays off

SINGAPORE--Singapore Telecom's (SingTel) group revenue for the first quarter this year rose 6.4 percent to S$3.21 billion (US$1.94 billion), compared to the same quarter last year. This growth is fueled mainly by the telco's regional investments, according to its CEO.

"Reflecting the success of the group's international expansion strategy, our overseas investments contributed 75 percent of the revenue," said Lee Hsien Yang, SingTel's president and CEO, in a company statement. The SingTel group includes its mobile business under SingTel Mobile, Internet services unit SingNet, and systems integration business under NCS.

In particular, two of SingTel's regional investments in India's Bharti and Indonesia's Telkomsel--where the telco holds a stake of 31 percent and 35 percent respectively-- contributed strongly to pre-tax revenues.

Over the last quarter, Telkomsel contributed S$173 million (US$104.7 million) in revenues, up 48 percent over the first quarter last year, while earnings from Bharti increased 91 percent to S$66 million (US$39.9 million).

SingTel's broadband revenues also grew 10 percent to S$55 million (US$33.3 million). The company currently leads the Singapore market with 311,000 broadband lines, with a market share of 55 percent.

The telco, however, did not fare too well in mobile communications, where it lost 13,000 subscribers in Singapore's highly-competitive mobile market. Although it had 9,000 new postpaid customers during the last quarter, its base of prepaid customers dropped 22,000.

"Although pre-paid revenues account for less than 10 percent of SingTel's mobile revenue in Singapore, it is still a growing segment," Lee told reporters during a briefing yesterday. "We recently introduced new (prepaid) plans to improve our market share and the early results are encouraging."

The company also revealed that it currently has over 20,000 subscribers on its 3G (third-generation) mobile network. Lee said the take-up rate "has been quite encouraging, given the fact that we only started (with 3G services) in February." Competitor MobileOne, reported having only 5,400 3G customers as of end-June.

Meanwhile, SingTel's Optus mobile business in Australia registered a revenue growth of 5 percent in the first quarter, compared to the same period last year. Optus Mobile's revenue growth, Lee said, was affected by increasing price-competition.

Optus' multimedia business saw broadband revenues increase by 63 percent with 406,000 customers. The alliance with Australia's ninemsn Web portal, Lee said, will allow Optus to deliver integrated content and services across broadband and 3G platforms.