Singapore’s largest mobile operator Singtel reported a dip in net profit for the opening quarter of its fiscal 2018 due to an exceptional item, but benefitted from brisk revenue growth at Optus in Australia and a strong turnaround at Telkomsel in Indonesia.

The group’s net profit for the quarter ending 30 June slid 5.6 per cent year-on-year to SGD892 million ($656 million) due to exceptional charges from a workforce restructuring at Optus in Australia.

Operating revenue increased 8.3 per cent to SGD4.23 billion, with global digital and cyber security businesses contributing more than 9 per cent.

The Australian consumer business grew on the back of higher uptake in mobile and fixed broadband services. Among Singtel’s regional associates, Telkomsel increased its pre-tax profit contribution by 18 per cent to SGD383 million due to strong growth in data and digital services. However, the gain was offset by intense price competition in India, with Bharti Airtel’s pre-tax profit contribution plunging 42 per cent to SGD103 million.

Despite the rise in competition, Singtel said Airtel strengthened its revenue market share leadership in India.

The pre-tax earnings of Singtel’s regional associates fell 3.8 per cent to SGD673. Excluding Airtel, its underlying net profit would have increased 3 per cent.

Good start
Chua Sock Koong, Singtel Group CEO, said: “We’ve had a good start to the year with 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. We are encouraged by their performance as they scale up to capture the opportunities in the new economy.”

Consumer revenue in Singapore rose 2 per cent year-on-year to SGD567 million as growth in data usage, home services and equipment sales offset declines in voice and roaming services. Mobile service revenue fell 1 per cent to SGD318 million as data growth came close to offsetting lower voice traffic. Equipment sales rose 33 per cent to SGD57 million on strong demand for new smartphones and more consumers re-contracting at higher tier plans to enjoy greater data allowances.

Its Singapore 4G user base rose by 22,000 from the previous quarter to 2.7 million, accounting for 65 per cent of its total subscriber base. Post paid ARPU fell 8 per cent to SGD65, while prepaid ARPU was stable at SGD18.

In Australia, consumer revenue increased 6 per cent to AUD1.7 billion ($1.34 billion) with growth across mobile and fixed services. Mobile service revenue rose 1.3 per cent to AUD924 million. It added 59,000 post paid customers, but lost 18,000 prepaid users due to Optus’ focus on acquiring quality customers. Mobile equipment sales rose 22 per cent to AUD317 million.

Optus added 85,000 4G users during the quarter, to take its LTE total to 5.88 million, or 60 per cent of its total subscribers. Post paid ARPU fell 4 per cent to AUD46; prepaid ARPU was down 2 per cent to AUD20.

Regional units
The pre-tax contribution of AIS in Thailand dropped 24 per cent year-on-year to SGD82 million, while Globe Telecom in the Philippines reported a 10 per cent drop in its contribution to SGD81 million.

Singtel’s digital life group, led by Amobee, posted a 91 per cent jump in revenue in fiscal Q1 to SGD293 million.

NetLink Trust was listed in July, raising SGD2.3 billion and fulfilling its committment to the Infocomm Media Development Authority to divest its 100 per cent stake in its fibre broadband network subsidiary to less than 25 per cent before 22 April 2018. A net gain of approximately SGD2 billion from this divestment will be recorded in the fiscal second quarter.

The NetLink Trust unit owns and operates the passive infrastructure for Singapore’s Next Generation Nationwide Broadband Network.