6 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).

Last week, SingTel had released its fiscal third-quarter earnings (for the year ended 31 March 2016) and hosted a conference call for analysts. I had picked out six useful things from reading the transcript of the call and would like to share them here.

But before I do that, here’s a quick background of SingTel for some context: The company’s 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 currently has three major business segments, namely, Group Consumer, Group Enterprise, and Group Digital Life. You can read more about Singtel in here.

With that, let’s get going with the conference call insights:

  1. Chua Sock Koong, Group Chief Executive Officer of Singtel, kicked off the briefing by noting that the reporting quarter had reflected the first full quarter of contributions from Trustwave. Trustwave, a cybersecurity outfit that was acquired by SingTel on 1 September 2015 had recorded revenue of $75 million and a net loss of $8 million. Bill Chang, Chief Executive Officer (Group Enterprise), added that Trustwave logged $3 million in EBITDA (earnings before interest, taxes, depreciation and amortization) for the fiscal third-quarter.
  2. Chang also gave details about Trustwave’s potential. He said that Trustwave could reach out to the same enterprise customers as an add-on to what is already provided. There is a network effect at play with the global threat telemetry that Trustwave sees. The effect can become more valuable as it scales.
  3. Responding to an analyst’s question, Yuen Kuan Moon, Chief Executive Officer (Consumer Singapore), said that voice roaming will continue to decline while more people shift their usage towards data. This trend is evident in local usage as well as roaming overseas customers. Moon expressed SingTel’s desire to drive the purchase of data roaming packs to mitigate the decline in voice roaming.
  4. In the previous analyst briefing, Chua said that securing the broadcasting rights for Barclays Premier League (EPL) football matches was a significant step in Optus’ strategy to be a mobile-led multimedia company. Allen Lew, Chief Executive Officer (Consumer Australia), added in the latest conference call that the BPL would be a unique competitive weapon.
  5. When asked on the drivers of Enterprise revenue growth, Chang pointed to ICT services and growth engines in the cloud as exciting developments for the company.
  6. Samba Natarajan, Chief Executive Officer (Digital Life), gave some comments around Innov8, a corporate venture capital innovation fund. The current fund size allocation is US$250 million and it provides Singtel with access to new technologies. It will primarily fund start-ups.

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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.