Singtel has reported a 9% decline in profit for its fiscal third quarter to S$890 million ($671.7 million) as a result of declining voice revenues, higher costs and lower earnings from the operator’s regional mobile associates.
Revenue for the December quarter grew 4% to S$4.6 billion as a result of higher earnings from Singtel’s wholly-owned Australian subsidiary Optus and strong contributions from the group’s digital businesses.
Optus reported an 8% increase in revenue on the back of strong postpaid mobile and NBN customer growth. During the quarter, mobile revenue grew 4% and 125,000 new postpaid customers were added. Optus’ 4G population coverage meanwhile reached 96.6%.
But Singapore consumer revenues fell 6% due to ongoing voice to data substitution and lower equipment revenues, partially offset by solid mobile data growth.
Group enterprise revenue also fell 4% for the quarter, while Singtel’s Group Digital Life revenues more than doubled.
Pre-tax earnings from Singtel’s network of regional mobile associates meanwhile fell 17.8% to S$523 million, largely as a result of the lower contribution from India’s Bharti Airtel due to the mobile termination rate cut and ongoing intense competition.
Earnings also fell at Indonesia’s Telkomsel as a result of growing competition and at the Philippines’ Globe Telecom due to higher network investment related costs, but profit contributions from Thailand’s AIS rose due to solid revenue growth.
“We see our investments in network infrastructure and spectrum as critical to our future growth and longer term returns in this digital world. Already, our transformation strategy is delivering with digital and ICT services accounting for 23% of our revenue this quarter,” Singtel group CEO Chua Sock Koong said.
“Despite the current business headwinds, our regional associates’ markets remain attractive with strong mobile data growth. The ongoing consolidation in India will also pave the way for a healthier industry. We believe our associates’ investments in networks and spectrum, strategic partnerships and focus on innovation will pay off.”
Singtel recently arranged to pay $412.6 million to indirectly increase its stake in Bharti Airtel to 39.5%.