Business

Thursday November 12, 2009

SingTel eyes untapped markets in Africa


SINGAPORE: Singapore Telecommunications (SingTel), South-East Asia’s top telecoms firm, plans to muscle into the fast-growing markets of Africa to grow further after it gave a cautious outlook for its core Singapore and Australian markets.

SingTel said yesterday it would either look at options in Africa on its own or support its partners such as Bharti Airtel in their quest for telecoms assets.

SingTel had supported a bid by India’s Bharti Airtel to buy South Africa’s MTN, a deal that collapsed in October on political instead of commercial issues.

“Africa is a market in the emerging mobile space, that is definitely worth our interest, and we are always talking to our associates,” SingTel chief executive officer Chua Sock Koong told a news conference.

Facing a domestic market of five million people where virtually everyone has a mobile phone, SingTel has spent S$18bil in recent years buying stakes in mobile operators in high-growth Asian countries such as India, Indonesia and in the bigger Australian market.

The city-state’s largest listed company with a market value of about US$34bil said its EBITDA (earnings before interest, taxes, depreciation and amortisation) in Singapore and Australia would expand at a low single-digit pace. SingTel reported its highest underlying net profit since March 2008 but the numbers were below market estimates.

Lim Chuan Poh, SingTel’s head for international operations, said the company was also looking at Vietnam, which he described as an untapped emerging telecoms market.

SingTel, about 55%-owned by state investor Temasek, posted July–September underlying net profit before goodwill and exceptionals of S$952mil compared with an average forecast of S$956mil in a Reuters survey of five analysts. The quarterly underlying net profit was 18.8% higher than S$801mil reported a year earlier.

Singapore and Australia accounted for 54% of the group’s EBITDA in the second quarter.

SingTel said operating revenue would grow at a single-digit pace in Singapore and Australia, an upward revision for the city-state where its previous guidance was for flat growth.

“People have very short memories,” CEO Chua said when asked why the company was so cautious. She said a year ago around the same time there were worries about whether businesses would get money to fund expansion.

SingTel owns Optus, the second biggest telecoms operator in Australia after Telstra.

“These results were not particularly dramatic, but the one area which significantly missed our expectations was Optus: revenues came in below expectations and although margins were stable, it would have been good to have seen some recovery,” Deutsche Bank said in a research note. — Reuters

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