- POSTED: 15 May 2014 09:06
- UPDATED: 16 May 2014 19:21
Local telco SingTel posted a 3.5 per cent year-on-year increase in net profit to S$898 million for its fourth quarter.
SINGAPORE: Local telco SingTel posted a 3.5 per cent year-on-year increase in net profit to S$898 million for its fourth quarter.
Higher earnings were supported by strong performance in Singapore's consumer business and its regional associates led by its Indian subsidiary, Airtel.
Looking ahead, analysts said the mobile and enterprise segments will remain challenging.
SingTel, Southeast Asia's largest telco, reported full year earnings of S$3.65 billion -- up 4.1 per cent from the year before.
Earnings remained resilient despite the Australian and regional currencies weakening significantly against the Singapore dollar. In constant currency terms, net profit would have grown 13 per cent.
Profit growth was largely driven by increased data usage in its various markets.
SingTel's Singapore consumer business reported a 5 per cent rise in revenue with continued growth in mobile and TV services.
Chua Sock Koong, group CEO of SingTel, said: "In Singapore and Australia, we have rolled out the 4G networks. What we have seen with increasing adoption of 4G handsets is, data usage has increased, and the introduction of tiered data plans both in Singapore and Australia means that as customers use more data, we'll be compensated in terms of increased average revenue per user (ARPU).
“In associates, in the emerging markets, what we've seen is an increased pace of 3G network roll out, and we've seen mobile data usage increase very strongly in each of the markets.”
However, operating revenue for the group's fourth quarter decreased 8 per cent.
Revenues fell on the back of declines in its Australian consumer segment and its enterprise business.
SingTel's enterprise business caters to infocomm and technology needs of companies both in Singapore and Australia.
Some analysts said that segment will remain challenging in the year ahead.
SingTel's group enterprise revenue declined 3 per cent to S$1.61 billion amid a cautious business environment and keen pricing competition.
Ajay Sunder, senior director of Telecoms (Asia Pacific) at Frost & Sullivan, said: "That's (the fall in revenue) to do with the global enterprise business becoming very competitive -- especially if you talk about managed services, as well as cloud, which is the focus of the game for most enterprise players now.
“It's getting very competitive in terms of pricing, and that will remain a very competitive game for SingTel in the next few quarters. There are a lot of opportunities, but there are many new entrants and competitive cost pressures."
Meanwhile, SingTel's Digital L!fe business posted revenue growth of 73 per cent for the quarter.
The firm's current digital portfolio consists of mobile advertising firm, Amobee, and other mobile apps like HungryGoWhere and NewsLoop.
The group said it will continue to expand aggressively in Singapore to improve digital content for consumers, despite losses widening to S$55 million.