Singtel sale slide offset by Indonesia, Thai mobile affiliates
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Singapore Telecommunications announced a net profit of S$944 million for its first quarter ended June, up 0.3 per cent on the year, mainly due to stronger contributions from its mobile affiliates in Indonesia.
Singtel’s sales fell 7.1 per cent on the year to S$3.9 billion. Singapore consumer revenue declined by 8.5 per cent to S$558 million. The growth in mobile data use could not fully offset the revenue decline in roaming and voice services in the city-state. The company’s operating revenue in Australia also fell by 15 per cent due to higher mobile service credits from device repayment plans and a weaker Australian dollar.
Weaker equipment sales also dragged revenue down for both countries. “Equipment sales both in Singapore and Australia showed a decline and that reflects lower re-contracting volumes. There was also a higher take-up of SIM-only plans where they don’t buy the handset from us,” said Chua Sock Koong, group chief executive of Singtel, in a media briefing on Thursday.
Contributions from Singtel’s other mobile affiliates helped to offset its losses. Indonesian mobile operator Telekomunikasi Indonesia’s profit after tax jumped 31.1 per cent on the year to US$244 million (S$327.78 million), supported by strong growth in voice, data and digital businesses. Thailand’s Advanced Info Service also generated higher contribution for the quarter, a 5.1 per cent increase to US$98 million after tax on the year.
Questions & Answers
Q.Why did Singtel's overall sales fall despite a net profit increase?
Why did Singtel's overall sales fall despite a net profit increase?
Singtel's sales fell due to declines in Singapore consumer revenue and operating revenue in Australia. Lower re-contracting volumes and a higher take-up of SIM-only plans also contributed to weaker equipment sales in both countries.
Q.What specifically caused the decline in Singtel's Australian operating revenue?
What specifically caused the decline in Singtel's Australian operating revenue?
Operating revenue in Australia fell by 15 per cent due to higher mobile service credits from device repayment plans and a weaker Australian dollar. Weaker equipment sales also contributed to this decline.
Q.How did Singtel manage to increase its net profit despite declining sales in some areas?
How did Singtel manage to increase its net profit despite declining sales in some areas?
The net profit increased due to stronger contributions from its mobile affiliates, particularly Telekomunikasi Indonesia and Thailand’s Advanced Info Service. Their improved performance helped offset losses elsewhere.
Q.What factors led to the decrease in equipment sales for Singtel?
What factors led to the decrease in equipment sales for Singtel?
Equipment sales declined because of lower re-contracting volumes and a higher take-up of SIM-only plans. Customers opting for these plans typically do not purchase a new handset from Singtel.
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