Singtel’s Q1 profit falls 6.6% as competition hits affiliate income
The Singtel logo outside its headquarters in Singapore. (File photo: AFP/Roslan Rahman)
SINGAPORE: Singtel's first-quarter net profit fell 6.6 per cent from a year ago, in part due to fierce competition in some of its markets and adverse currency movements.
Singtel, Southeast Asia's largest telecom operator, on Wednesday (Aug 8) posted a net profit of S$832 million for the three months ended in June, compared with S$890 million in the same period last year.
Underlying net profit, which excludes one-time items, fell more than 19 per cent to S$733 million. Revenue fell 0.5 per cent to S$4.13 billion.
Competition affected India's Bharti Airtel and Indonesia's Telkomsel, in which Singtel owns stakes, leading to a decline in its regional associates' overall profits. Singtel is also set to face fresh competition in its home market of Singapore with the expected arrival of a new entrant later this year.
In a statement released to the Singapore Exchange, Singtel said that Airtel's profits were affected by intense competition, as well as mandated cuts in mobile termination rates in India.
Telkomsel's earnings were weighed down by intense price competition, particularly during the mandatory registration of prepaid SIM cards, Singtel said.
According to the telco, this exercise has since been completed and the pricing situation improved towards the end of June.
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Singtel CEO Chua Sock Koong said: “While competition remains keen in Indonesia and particularly India, both Telkomsel and Airtel have nonetheless gained market share. We have started to see revenue stabilise on a sequential quarter basis for India.
"As leading operators in their markets, all our regional associates continue to ride the growth in data and we are positive on their long-term growth potential.”
In Australia, Optus logged stronger operating revenue on the back of continued customer growth, supported mainly by sustained investments in networks, technology and content.
As for Singapore, consumer revenue rose but continued to be affected by factors such as an increase in demand for SIM-only plans.
Last month, Singtel said it would partner with gaming firm Razer and others to launch a regional e-sports league to engage with younger consumers.
