Singtel Broker Report Asian Capital Markets October 2007
Singapore
Telecommunications
SingTel Ltd
Reuters: STEL.SI Bloomberg: ST SP Exchange: STI Ticker: SGT.SG
Regional growth attraction BUY
Singtel Performance Highlights
SingTel reported 1Q operating revenue of S$3,567m (+10.5% yoy) and net profit of S$927m (+10.4% yoy). Moreover, EBITDA increased to S$1,769m (+9.2% yoy). Its main subsidiaries SingTel and Optus saw slower single digit growth compared to its regional associates which contributed to the strong performance with a recent acquisition of WARID Telecom from Pakistan. A SWOT analysis of Singtel's current position can be found in Apendix 1.
Singtel Competitors and Competitive Strategy: Singapore, Australia
Local competitors in Singapore include M1, Starhub and Virgin, with Starhub being its main competitor ranging from mobile, landline, internet and recently payTV.
In saturated local markets, Singtel as a market leader is defensive in its mobile market share at 50%. As such it looks for growth initiatives such as entering the payTV market, enhancing its internet services and engaging in an aggressive strategy of service bundling with its "Generation Mio" to rival Starhub which previously used service bundling to gain market share.
It is also looking to gain more business customers by providing converged networks and services through its SingTel Meg@POP domestic IP VPN service.
In Australian's current telecommunications environment highly competitive with narrowing margins. Subsidiary Optus is looking at sustainable growth at through cost cutting and expanding on its broadband customer based which has seen the most profit growth.
Singtel Competitors and Competitive Strategy: Regional associates
Singtel also aims for integration in the industry with ownership in networks and infrastructure with ownership stakes in 26 submarine cable systems, 3 satellite systems,...
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