Samantha Chiew Published on Fri, Jul 02, 2021

For years, Singtel (Singapore Telecommunications) was firing on all cylinders. Its regional associates were all posting steady growth as mobile usage increased while it enjoyed a comfortable domestic oligopoly in the mobile market.

But as markets became saturated with all sorts of phones and plans, earnings started to drop and Singtel was forced to curb its generous dividend. Then the pandemic hit, destroying high-margin roaming revenue on one hand while domestic competition intensified.

On May 27, under new group CEO Yuen Kuan Moon, Singtel announced a new strategic direction riding on three key tenets: Using the newly-deployed 5G networks to juice new growth in the mobile consumer segment and to inspire new uses and revenue potential from the enterprise market.

The telco will also focus on its ICT (information and communications technology) arm NCS, which is slated to be “a business-to-business (B2B) digital services champion in Asia Pacific”, targeting the enterprise customers across the region.

NCS will set up two strategic business units to focus on government and telecoms, while part of digital security company Trustwave’s technology services will be reorganised into NCS which — based on market talk — might be spun off for its own listing.

Elsewhere, Singtel has shown an active capital management stance by weighing ways to monetise its assets — even entertaining bids for its cherished associates, like an offer for Advanced Info Service in Thailand. 

But before new growth could be captured, some house cleaning was in order. Citing difficulty scaling up amid the pandemic, Singtel took a huge write-down of $1.2 billion on Amobee, a digital marketing company acquired a decade ago, and Trustwave, which it snapped up in 2015. These exceptional charges, coupled with general operational weakness, slashed Singtel’s earnings for FY2021 ended March by half to $544 million.

Market observers say these moves could pave for a better FY2022 for Singtel. “This strategic reset is the most significant move in recent years to refocus the business and capitalise on technology proliferation and large-scale digitalisation,” says Yuen.

“We intend to use this unique opportunity to make profound changes, restructure and reposition to emerge stronger,” he adds.