6 Quick Things Investors Should Learn About Singapore Telecommunications Limited

Singapore Telecommunications Limited (SGX: Z74) – or more popularly known as Singtel – is one of the cool companies in Singapore which shares webcasts of their quarterly earnings presentations (the link for Singtel is here).

As one of the big trio in the telecommunications industry – the others being M1 Ltd (SGX: B2F) and StarHub Ltd (SGX: CC3) – Singtel makes its money from its major business segments of Group Consumer, Group Enterprise, and Group Digital Life.

You can read more about Singtel here.

What’s up, doc?

Below are six useful things I learned from listening to Singtel’s latest fiscal fourth-quarter webcast for its earnings for the financial year ended 31 March 2015 (FY2015):

  1. For Optus, Chief Executive Officer (Consumer Australia) Allen Lew commented that the next quarter is expected to be more competitive and this is reflected in the low single digit outlook provided for the Australia mobile service. Capital expenditures for Australia will increase this year in order to expand Optus’s mobile coverage in the country.
  2. For the Singapore mobile space, Chief Executive Officer (Consumer Singapore) Yuen Kuan Moon commented that a driver for growth is coming from the mobile data side. This trend is not unlike what is observed at both M1 and Starhub. As of the fiscal fourth-quarter, 61% of mobile users are on tiered mobile data plans with 26% exceeding the data plans.
  3. Speaking on the potential fourth entrant into the mobile scene, Yuen felt that it was premature to discuss this topic since the Infocomm Development Authority (IDA) has yet to complete its public consultation. Furthermore, he said that the auction for new spectrums will only occur closer to the end of the year.
  4. Over at the Group Digital Life segment, a question was put forth about the nature of the $72 million in losses made in the fiscal fourth-quarter. Chief Executive Officer (Group Digital Life) Samba Natarajan commented that the losses reflect the level of investments in digital marketing and integration costs, and these costs are not one-off in nature. That said, losses are expected to narrow in the coming year as Amobee scales up. Adding to this, Group Chief Executive Office Chua Sock Koong said that Singtel’s focus for the Group Digital Life segment has been sharpened around three key initiatives: digital marketing, data analytics, and premium regional video.
  5. On a question on competition within the mobile advertising space from the likes of Facebook Inc., Natarajan stated that the competitive advantage for the Amobee platform would be its content intelligence and marketing technology. Singtel will be leveraging its first party data in Asia as well to deliver insights in the future. He also felt that there was space for many platforms to exist.
  6. On the emergence of messenger and voice apps like Whatsapp and WeChat, Yuen commented that Singtel benefits from the usage of data from these apps. The tiered data-pricing structure that Singtel rolled out was a reflection of its efforts to monetise data usage.

Foolish takeaway

To buy and hold a company’s shares for the long term also means keeping up with developments in the firm.

The access to management teams via webcasts gives the Foolish investor a fair chance to judge whether they would like to be invested alongside those teams. It also helps us put together a more complete thesis around a company and keep up with developments in its industry.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.