India, Singapore drag down Singtel fiscal Q3 earnings - Mobile World Live

India, Singapore drag down Singtel fiscal Q3 earnings

08 FEB 2018

Singtel suffered a sharp drop in profit in its fiscal Q3 as weak results from some of its regional units, particularly Bharti Airtel in India, and its home market led to a near 1 per cent decline in mobile revenue across the group.

The company’s net profit for the quarter ending 31 December 2017 fell 8.5 per cent year-on-year to SGD890 million ($669 million) due to a 14.4 per cent decline in its regional associates’ pre-tax earnings and higher network depreciation and amortisation from increased infrastructure investments.

Singtel group CEO Chua Sock Koong said: “Despite continued growth momentum in Africa, Airtel’s results were adversely impacted by the cut in domestic mobile termination rates and intense competition in India. In Indonesia, Telkomsel’s earnings fell as a result of heightened competition in data and declines in voice.”

Chua said its regional associates’ markets remain attractive with strong mobile data growth. “The ongoing consolidation in India will also pave the way for a healthier industry. We believe our associates’ investments in networks and spectrum, strategic partnerships and focus on innovation will pay off.”

Earlier this week, Singtel announced plans to invest INR26.5 billion ($413 million) to increase its interest in Airtel by 0.9 percentage points to 39.5 per cent.

Mixed results
Operating revenue for the quarter increased 4.4 per cent from the prior-year period to SGD4.6 billion. Consumer business revenue grew 3.1 per cent to SGD2.66 billion, with a 5.5 per cent fall in Singapore revenue offset by a 7.8 increase in consumer revenue at its Australian unit Optus. Business revenue dropped 3.9 per cent to SGD1.62 billion.

Group mobile turnover dipped 0.8 per cent year-on-year to SGD1.49 billion due to a weak performance in Singapore, while data and internet revenue increased 6.7 per cent to SGD887 million. Equipment sales rose 4.6 per cent to SGD683 million.

Consumer revenue in Singtel’s home market dropped 5.5 per cent year-on-year to SGD621 million in the recent quarter, with mobile turnover down 3.3 per cent to SGD317 million and equipment sales falling 11.2 per cent to SGD119 million.

Mobile data growth partially offset an erosion in voice, while higher demand for data roaming packages helped moderate the decline in roaming revenue. Equipment sales were affected by delays in popular handset launches and higher demand for SIM-only plans, Singtel said.

Consumer revenue at Optus rose 7.8 per cent to AUD1.96 billion ($1.5 billion) as a result of strong growth in post paid mobile and NBN customers, along with higher NBN migration payments. Mobile service revenue increased 3.7 per cent to AUD951 with the addition of a 125,000 new post paid handset customers (those who purchase a device with their contract). However, post paid ARPU continued to be impacted by a growing demand for SIM-only plans and higher device repayment credits. In the prepaid segment, its subscriber base declined by 29,000 as it turned its focus to acquiring quality customers. Equipment sales increased 9.5 per cent to AUD474 million.

Optus’ 4G coverage now reaches 96.6 per cent of the population. It recently acquired new metropolitan spectrum licences in the 2.3GHz and 3.5GHz bands, which will allow it to offer 5G services in the future.

Singtel’s Digital Life business reported a 106 per cent jump in revenue to SGD34 million and overall EBITDA continued to rise despite higher investments in content and technology at mobile video streaming service HOOQ. Amobee’s revenue grew 129 per cent from a year ago to SGD321 million, posting positive EBITDA for the second straight quarter.

Chua said its transformation strategy is delivering with digital and ICT services accounting for 23 per cent of revenue in the quarter.


Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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