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News  14, Feb 2013

SingTel sees 8% dip in third quarter net profit

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Singtel profit drops but customer base increases

With increasing demand for smartphones and better Internet services, SingTel has seen a growth in annual customer base of nine percent, but the bad investments and rife competition could have cost it an eight percent dip in its net profit.

It was reported today that Singapore Telecommunications Limited (SingTel), which has multiple subsidiaries, has seen an increase of nine percent in terms of annual customer base with 473 million mobile users. But they have also suffered a drop of five percent in group revenue, which totals up to be S$4.6 billion. It also noted that there is a eight percent decrease in net profit to S$827 million.

SingTel has released its earnings for its fiscal third quarter, which goes about saying that it has seen “resilient performances against the competition”.

According to the published data, in Singapore, revenue grew one percent to S$1.7 billion. It is also noted that revenue from mobile communications increased by three percent to S$507 million, banking on strong customer growth and the ever-increasing demand for smartphones. The Asian telecom also suggested that this might have been offset by lower roaming revenues. It also sees its customer base at 3.76 million, with a leading market share of 46.6 percent as of 31 December 2012.

Ms Chua Sock Koong, CEO of the SingTel Group, said, “The performance of the Group demonstrates the resilience of our core operations and focused execution even as we recognise the challenges in the various markets. We are executing our transformation plan to grow in the new digital era, exploiting opportunities in mobile data and enterprise ICT services to grow our share of the customer wallet. The Group is focused on driving growth in mobile data services with continued investment in its infrastructure, attractive tiered data plans and meeting customer demand for higher speeds and better user experience.

It is also noteworthy that Internet-related revenue for Singapore grew by five percent with more users adopting fiber-based services and higher-tier plans. SingTel also saw 29 percent of households on their bundled plans, which constituted 338,000 customers.

The company also saw an uproar, especially online, when it announced its revision of the data bundle from 12GB to 2GB of free data, alongside the other two telcos, M1 and StarHub, in Singapore.

What is thought of as bad decisions have also seen SingTel through the economic downturn, with the acquisition of Optus among others.

As for Optus in Australia, it is said to have an increase in margin despite lower operating revenue for its mobile services. It has also maintained its postpaid customer growth well, and saw net additions of 58,000 for the quarter. In addition to expanding its 4G coverage across the country, the 3G network was said to have improved.

Its other operators mostly saw increases in revenue and customer base. Telkomsel, in Indonesia, noted a jump of 16 percent in revenue, with strong growth growth across voice, SMS and data usage. Its total customer base also reached 125 million, growing by 17 percent as compared to the past year. AIS, in Thailand, also saw growth in both voice and non-voice revenues.

Globe, in the Philippines, saw an increase of seven percent with continued strength in both mobile and broadband platforms, even with an especially competitive environment. It also observed a 10 percent growth in mobile customer base, as compared to a year ago.

However, Airtel, which is in India, suffered a 46 percent decrease in share value to S$70 million, reasons cited by SingTel as the weaker currency, increased depreciation and higher net financing costs. This, despite its total mobile customer base reaching 251 million, an eight percent increase from the previous year.

In January 2013, the Singapore-based service provider announced its plans to divest its stake in Warid, a telecommunications group in Pakistan, for US$150 million and a right to obtain 7.5 percent share of the net proceeds from any future sale, public offering or merger of Warid.

Image Credit: Munshi Ahmed/Bloomberg

Elaine Huang

Elaine Huang

Elaine is a fervent believer that if there ever is a zombie apocalypse, we will all be snapping away at them with our phones and posting them onto Instagram. A Mass Communication graduate of Ngee Ann Polytechnic's School of Film and Media Studies, she enjoys writing about technology and entrepreneurs. When not hashtagging her way through all sorts of trouble, Elaine is probably contemplating how to write in the third person.

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