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Singapore Telecommunication Limited’s Group Consumer Business: Present Challenges and What the Future Holds

Singapore Telecommunications Limited (SGX: Z74) is a global technology firm with a presence in Asia, Australia, Africa and the United States.

The company, which is more popularly known as Singtel, organises its business into three main segments: Group Consumer, Group Enterprise and Group Digital Life. Of the three businesses, the Group Consumer segment is the largest, contributing over 57% of Singtel’s sales for the fiscal year ended 31 March 2017 (FY2017).

Singtel’s FY2017 annual report included an interview with the executives leading the charge in the Group Consumer business, Yuen Kuan Moon (Consumer Singapore CEO) and Allen Lew (Optus CEO).

Here are some insights about the present challenges and the future of the business.

Digital disruption   

Digital applications such as Whatsapp has been taking over traditional functions like SMS messaging and voice calls. On this point, Yuen said:

“There’s been a dramatic shift in our customers’ lifestyle needs and the way they engage us. They’re connected all the time, wherever they are.”

He added that there has been an accelerated shift from voice to the usage of data. On that note, Lew believes that the onus is with Optus to deliver the best network quality in terms of speed and reliability.     

Rising competition

Singtel is expecting to face new competition in both Singapore and Australia with the entry of Australia’s TPG Telecom. However, Yuen said:

“Competition is not new to us. To stay at the top of our game, we keep our customers at the centre of our strategy.”

Yuen believes that Singtel should adapt to the customers’ changing lifestyle and preferences. Lew welcomed competition in the telco space as it would force Singtel to up its game and improve its products.  

Looking forward

Moving forward, Singtel’s future might lie in the use of data. Yuen said:  

“We’re focusing on data centricity – what else our customers can use data for, and how we can deliver the best mobile data experience.”

Yuen believes that Singtel can extend its network leadership and support trends like the internet of things (IoT) and 5G expansion in the future. But digitalization goes beyond providing data packages to its customers. On that point, Yuen said:

“So we’ve been actively digitalising our business and innovating, not just in the products and services we offer but also in the way we sell and serve to reflect today’s digital lifestyles.”

Over at in Australia, Lew shared his vision for Optus:

“Our goal is to build a digital organisation that provides converged fixed, mobile and video services by using deep insights into customer behaviour and business fundamentals to create a sustainable competitive advantage.”

As it stands, the telco industry is changing, bringing with it challenges and opportunities. Singtel is positioning itself for the latter.

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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.