7 Quick Things Investors Should Learn About Singapore Telecommunications Limited

Singapore Telecommunications Limited (SGX: Z74) is one of the cool companies in Singapore that shares webcasts and/or transcripts of their quarterly earnings presentations (the link for Singtel’s transcript is here).

As the biggest of the trio of telecommunication services providers in Singapore – with 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 in here.

What’s up, doc?

Below are seven useful things I learned from reading the transcript of Singtel’s fiscal second-quarter earnings conference call for the financial year ending 31 March 2016 (FY2016):

  1. Chua Sock Koong, Group Chief Executive Officer of Singtel, shared that both Singtel (Singapore Operations) and Optus have secured broadcast rights for all English Premier League (EPL) matches. Chua said that this is a significant step in Optus’ strategy to be a mobile-led multimedia company. Allen Lew, Chief Executive Officer (Consumer Australia), added that the EPL has the “next largest engagement number here in Australia” beyond local Australian sports. Lew said that 85% to 90% of the Australian population has a smartphone, and that the EPL will be made available through a mobile app.
  2. Analysts were also eager to learn whether Singtel was going to work with Netflix Inc., a popular US-based internet television network with over 69 million members worldwide. Yuen Kuan Moon, Chief Executive Officer (Consumer Singapore), said that Singtel is “also looking forward to working” with Netflix. Moon’s reply could be referring to Starhub’s commercial discussion with Netflix. Notably, Optus is already working with Netflix in Australia. Lew said that Optus benefits from the brand association with Netflix.
  3. During the earnings release, Singtel also adjusted its revenue guidance from mid-single digits to low-single digits. One of the reasons for the lower guidance which Moon cited was a change in customer behaviour towards data roaming from voice roaming.
  4. Moon also said that the average data usage per customer has grown from 1.8 gigabytes to 2.2 gigabytes in the reporting quarter. Singtel is seeing a significant number of customers trading up to higher data plans as a result.
  5. Singtel’s Trustwave acquisition will be incorporated from the third quarter of the fiscal year. The acquisition will be included into its managed services and ICT services portfolio.
  6. Responding to a question from an analyst, Samba Natarajan, Chief Executive Officer (Digital Life), acknowledged that the Digital Life business segment was primarily made out of the Amobee sub-segment. For context, the Amobee sub-segment accounted for $124 million of the $126 million in total revenue recorded by the Digital Life segment for the reporting quarter. The other $2 million came from HOOQ and DataSpark. HOOQ is the service launched by Singtel’s partnership with Sony Pictures Television and Warner Bros for an over-the-top video service.
  7. Bill Chang, Chief Executive Officer (Group Enterprise) stated that Singtel’s goal in the cybersecurity space is to become a managed security services provider. It has partnerships with key industry players like FireEyePalo Alto Networks, and Check Point Software. With the multiple partnerships, Chang believes that Singtel could be less exposed to the ups and downs of the technology cycles.

Foolish takeaway

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

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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 owns shares in Netflix Inc.