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3 Quick Things To Know About Singapore Telecommunications Limited’s Huge Associate Network

Singapore Telecommunications Limited  (SGX: Z74) serves 600 million customers in over 25 countries.

The majority of those customers actually belong to Singtel’s regional mobile associates. They are an important part of Singtel’s business as they accounted for 47% of Singtel’s total net profit in the fiscal year ended 31 March 2016.

I thought it may be useful for investors to learn more about Singtel’s associates. Here are three major updates about them from Singtel’s latest annual report which was released just last week.

Mobile data and digital services

“The growth in mobile data services is a major opportunity for emerging market telcos seeking to diversify beyond traditional revenue streams from voice and text. The number of data users across our associates’ markets was 198 million as at 31 March 2016, a 21% increase from a year earlier, while data volumes increased by 78% over the same period. Year-on-year revenue growth from mobile data ranged from 21% to 65%…

…Mobile payments are also proving popular in the emerging markets, where a large part of the population do not have credit cards or bank accounts.”

Consumer habits are evolving towards data usage and packages (more on this next). Singtel’s billing may offer a wide payment network as well. Singtel may also offer its HOOQ video streaming service in other countries and leverage its associates’ payment network. The telco’s associates operate in India, Indonesia, Thailand,  Philippines and more.

Investing in networks

“In January 2016, AIS launched 4G services across 42 provinces in Thailand, with the aim of achieving 50% population coverage by year end. In Indonesia, Telkomsel currently offers 4G in about 40 cities, in addition to its 3G coverage, while in the Philippines, Globe is expanding its 4G coverage and capacity.”

Singtel boasts a near-100% 4G coverage in Singapore. Emerging countries like Thailand, Indonesia, and Philippines are in the early stages of expanding their 4G coverage. This fits in with the growth in mobile data usage by customers.

Associate collaboration

“The Singtel Open Platform is a common payment gateway for Singtel, Optus and our regional mobile associates. This one-stop shop significantly reduces the integration effort and time for our business partners. In FY 2016, we signed agreements with online shopping company Lazada, gaming company Asiasoft and transport booking app Grab, which allow customers to make payments using our associates’ direct carrier billing and mobile wallet capabilities.”

Singtel’s payment network is one way it is able to bring together the scale of its associate network. Here, eCommerce services like Lazada and Grab can tap on Singtel’s associate network to grow in the region.

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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 company mentioned.