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Company Profile - Singapore Telecommunications (SingTel) - Q2 2013

Singapore - Telecoms - 13 Mar 2013 - Singapore Telecommunications (SingTel) SWOT Analysis

SingTel is an integrated domes tic telecommunications s ervice provider offering mobile, data, internet and broadband s ervices . It als o launched IPTV s ervices commercially in 2007. Strengths The company is a leading domes tic fixed, mobile and broadband operator. Ability to compete directly with StarHub acros s the three major s ectors of voice, TV and data. National telephony revenue are declining as the number of local fixed lines in s ervice falls , a res ult of the popularity of alternative s ervices s uch as VoIP and mobile. SingTel Optus , which account for two-thirds of group s ales and profit, is experiencing s trong competition in Aus tralia. 3 G and LTE offerings , including mobile TV s ervices , provide s cope for a greater number of high-ARPU cus tomers . Succes s in tapping into the foreign expatriate community has res ulted in a s trong prepaid offering take-up. Opportunities The corporate internet protocol virtual private network (IP-VPN) market is expected to grow s ignificantly in the medium term. Part of winning cons ortium for the building of Singapore's ultra-high-s peed broadband network. One of the 91 companies interes ted in s ecuring a licence in Myanmar. The continued growth of StarHub and M1's s ubs criber bas es could s ee them continue to threaten SingTel's market leaders hip. Threats Growing competition in South As ia from operators s uch as Axiata is als o a worry. Cros s -carriage pay-TV could threaten SingTel's offerings .

Weaknes s es

Es tablis hed in 1992, SingTel was lis ted on the Singapore Stock Exchange in 1993 and now s upplies communications s ervices in more than 20 countries . It provides national fixed-line s ervices , mobile s ervices (through SingTel Mobile - see following profile), Company broadband, IP and internet acces s , and international telephone s ervices . SingTel als o Overview operates an ADSL network acros s the is land and has four s atellite earth s tations . As part of its long-term growth plans , the company will continue to inves t in s trategic regional markets , including India, Indones ia, the Philippines , Thailand and Banglades h, and is looking to inves t els ewhere in the region. Continued growth in its regional s ubs criber bas e is the way forward for SingTel. India and Indones ia will continue to be integral to the operator's s ucces s . The operator will als o continue to enter new high-growth markets . Beyond the As ia Pacific region, SingTel is looking at pos s ible inves tments in Africa, the Middle Eas t and Central As ia as growth dries up in South Eas t As ia. Domes tically, SingTel plans to continue to challenge StarHub with its IPTV s ervices . The s ecuring of the Barclays Premier League s wings the balance in SingTel's favour, and SingTel has s ecured another three s eas ons on a non-exclus ive bas is , which means that it does not need to provide acces s to StarHub's s ubs cribers even though the cros s -carriage regulation was implemented from Augus t 1 2011.

Strategy

In Singapore, SingTel is inves ting in key s trategic initiatives to drive longer term growth in the new Next Generation National Broadband Network era. In the domes tic cons umer s egment, SingTel plans to leverage its s trength in carriage bus ines s and iconic s ports content to build s cale in mio TV and drive take-up of its multimedia bundled s ervices . In the bus ines s s egment, SingTel will continue to drive growth in managed ICT s ervices by expanding its s uite of hos ted infras tructure and s oftware applications . In the s hort term, the inves tment in mio TV will incur cos ts , particularly in content, cus tomer acquis itions and roll out, before it delivers longer term s cale benefits . Managed ICT s ervices are als o expected to regis ter lower margins than traditional carriage s ervices . SingTel's Singaporean s ubs idiaries include SingTel Mobile (mobile s ervices provider), SingNet (internet s ervice provider), NCS (ICT s olutions provider), SingTel Digital Media (local content provider) and SingTel Innov8 (corporate venture capital fund). SingTel als o controls Aus tralia's Optus , which became wholly owned s ubs idiary on Augus t 30 2011. As of March 2012, SingTel was 54.39% owned by Temas ek Holdings . Other major s hareholders include Citibank Nominees Singapore (9.54%), DBSN Services (9.08%), DBS Nominees (8.15%) and the Central Provident Fund Board (5.83%).

Corporate The SingTel Group is s tructured along three key bus ines s : Group Cons umer, Group Structure Digital L!fe and Group ICT. Group Consumer: This unit bands SingTel's cons umer-bas ed operations Singapore, Aus tralia and emerging markets together. in

Group Digital L!fe: This divis ion will look at opportunities in the digital s ervices market s uch as IPTV and e-commerce and s hift away from traditional telecoms products and s ervices . Offerings will als o be marketed to SingTel's cons umers as bundles or value-added s ervices . Group ICT: This unit focus es on the enterpris e market and aims to better integrate SingTel's portfolio of IT and telecoms products and s ervices . For the quarter ended Dec ember 2012, SingTel Group reported operating revenue of SGD4.6bn, down by 4.8% y-o-y, of which SGD1.7bn was attributed to its bus ines s in Singapore. The remaining SGD2.9bn or 63% was generated through Optus , its telecoms operation in Aus tralia. SingTel's Singapore bus ines s grew by 1.3% y-o-y to SGD1.7bn in the quarter ended Dec ember 2012, which was underpinned by new revenue from digital s ervices and continued growth in its mobile and ICT operations , partially offs et by lower fibre rollout Financial revenue. Mobile communications revenue grew 3.2% y-o-y on s trong cus tomer growth, Results which was partially offs et by lower pos tpaid ARPU from a decline in roaming. In Aus tralia, Optus 's operating revenue declined 8.1% y-o-y to SGD2.9bn due to the mandated reduction in mobile termination rates , lower equipment s ales and s ervice credits as s ociated with the device repayment plans introduced in October 2011. SingTel Group 's EBITDA inc reas ed b y 0.5% y-o-y to SGD1.3bn in the quarter ended December 2012. EBITDA in Singapore ros e 1.4% and would have increas ed by 2.5% if excluding inves tments in its digital bus ines s . EBITDA in Aus tralia was relatively s table, declining by 0.1% to SGD732mn. Pay-TV At the end of Dec ember 2012, the number of mio TV s ubs cribers reached 398,000 up from 353,000 the previous year. In the quarte r, SingTel s trengthened its content s uite with with the introduction of new genres of TV entertainment including kids , mus ic and comedy. SingTel als o renewed the broadcas t rights to ESPN Star Sports s uite of TV channels as it continued to provide a comprehens ive line-up of s ports content along with Barclays Premier League and other prominent football events Broadband SingTel had a total of 2.0mn broadband s ubs cribers at the end of December 2012, which compris ed 553,000 fixed (of which 167,000 were s ubs cribed to fibre s ervices ) and 1.5mn mobile broadband s ubs cribers . SingTel cons ortium OpenNet, including Singapore Power, Singapore Pres s Holdings and Axia NetMedia, won the right to build the city's ultra-high-s peed Operational Developments broadband network in September 2008. SingTel and Axia NetMedia each have a 30% s hare in the cons ortium, with Singapore Pres s Holdings and Singapore Power's telecoms unit retaining s hares of 25% and 15% res pectively . The next generation national broadband network will provide s peeds of 1Gbps when fully complete in 2015. The operator is expected to inves t about SGD2bn to des ign, build and maintain the network infras tructure, while the government will contribute about SGD750mn, according to the IDA. Under the terms of the OpenNet propos al, it

would complete the fibre network roll-out to 60% of hous eholds and buildings by 2010, extending coverage to 95% by 2012. Having won the tender, OpenNet announced plans to commence deploying fibreoptic cables in commercial and res idential properties from September 2009. Initial deployments will be in Macphers on, Jurong, Middle Road and Geylang, connecting about 56,000 hous eholds and 1,000 office buildings in the firs t month. Ins tallation cos ts for res idential s ites are charged at SGD200, while all other properties are SGD450. Group Group Revenue (YE March 2011): SGD18.071bn Group Revenue (YE March 2012): SGD18.825bn Group Revenue (QE June 2012): SGD4.533bn Group Revenue (QE September 2012): SGD4.572bn Group Revenue (QE December 2012): SGD4.597bn Group Net Profit (YE March 2011): SGD3.825bn Financial Data Group Net Profit (YE March 2012): SGD3.989bn Group Net Profit (QE June 2012): SGD945mn Group Net Profit (QE September 2012): SGD868mn Group Net Profit (QE December 2012): SGD828mn Group EBITDA (YE March 2011): SGD5.119bn Group EBITDA (YE March 2012): SGD5.219bn Group EBITDA (QE June 2012): SGD1.243bn Group EBITDA (QE September 2012): SGD1.267bn Group EBITDA (QE December 2012): SGD1.262bn Singapore Fixed Lines (March 2010): 1.673mn Fixed Lines (March 2011): 1.701mn Fixed Lines (March 2012): 1.691mn Fixed Lines (June 2012): 1.686mn Fixed Lines (September 2012): 1.685mn Fixed Lines (December 2012): 1.673mn Broadband Subs cribers (March 2010): 1.020mn Broadband Subs cribers (March 2011): 1.402mn Broadband Subs cribers (March 2012): 1.800mn Operational Data Broadband Subs cribers (June 2012): 1.890mn Broadband Subs cribers (September 2012): 1.950mn Broadband Subs cribers (December 2012): 2.044mn Mobile Subs cribers (March 2010): 3.116mn Mobile Subs cribers (March 2011): 3.307mn Mobile Subs cribers (March 2012): 3.580mn Mobile Subs cribers (June 2012): 3.638mn Mobile Subs cribers (September 2012): 3.692mn Mobile Subs cribers (December 2012): 3.755mn 3G Subs cribers (March 2010): 1.45mn 3G Subs cribers (June 2010): 1.50mn Employees , Group: 21,724 (December 2012) SingTel

10 Eunos Road Company Details #10-01 Singapore Pos t Centre Singapore 408600 Fax: +65 67342209 Webs ite: www.s ingtel.com.s g

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