3 Interesting Things You Might Not Know About Singapore Telecommunications Limited’s Major Associate, Telkomsel

Singapore Telecommunications Limited (SGX: Z74) might have “Singapore” in its name, but the telco’s sources of income are far more diverse.

In the latest quarter, Singtel’s regional mobile associates contributed S$679 million to the telco’s profit before tax. For some context, Singtel generated around S$1.35 billion in profit before tax overall. So, regional mobile associates made up over 50% of its profit before tax.

Let’s find out more about Telkomsel, the largest contributor to its regional mobile associates’ revenue.

It’s BIG

The slide below shows a summary of the regional associates’ contribution.


Source: Singtel’s earnings presentation

Telkomsel, Singtel’s Indonesian based associate, contributed S$369 million or 27% of Singtel’s overall profit before tax for the second quarter of the financial year ending 31 March 2017 (FY2017). Within the regional mobile associate level, Telkomsel made up around 54% of the profit before taxes.

Interestingly, the Singtel’s Singapore Consumer segment had an EBIT (earnings before interest and taxes ) of S$131 million during the same timeframe. Australia Consumer’s EBIT is A$271 million or around S$271 million.   

In short, Telkomsel is a significant contributor to Singtel.

It’s really BIG


Source: Singtel’s earnings presentation

Telkomsel had over 163 million mobile subscribers at the end of September 2016. This dwarfs the number of subscribers in both Singapore and Optus which had 4.1 million and 9.4 million mobile subscribers respectively.

Its user base is huge, to say the least.   

It’s a different world

From the 4.1 million mobile subscribers in Singapore, around 2.3 million are post-paid customers and 1.8 million are pre-paid customers. In other words, the majority of mobile users come from post-paid.

Not so in Indonesia.   

Telkomsel had 152.6 million mobile subscribers at the end of 2015. From this figure, only 3.5 million belong to the post-paid segment while the rest, or 149.1 million, are pre-paid customers.

The above three points give us a brief insight into the importance and differences of Telkomsel within the Singtel universe.  

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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.