Optus, Telecommunications company

Last week, Singtel, Singapore's largest telecommunications operator, reported a scintillating set of numbers for the first half of its 2022 financial year which ended September 2021. Net profits after tax shot up 104.7 percent to SGD 954 million (USD 705 million) as its "underlying business grew on the back of accelerated digitalisation and a resumption in economic and business activity across the region."The company also credited the outstanding results to the improved performance of regional associates especially Bharti Airtel.Underlying net profits before exceptional items grew 17 percent to SGD 983million as operating revenue inched up three percent to SGD 7.65 billion. In addition to the exceptional performance of regional associates, other reasons cited for the better showing was higher mobile service revenue in Australia and strong ICT (Information and Communication Technology) growth from higher digital services revenue for NCS and also data centre revenue. NCS is the ICT arm of Singtel. Free cash flow rose almost four percent from SGD 1.69 billion to SGD 1.77 billion mainly due to higher dividends from the associates.Pre-tax profits from associates increased 21 percent to SGD1 billion (USD 739 million) with Airtel contributing SGD 146.9 million (USD 108.6 million) up from a loss of SGD 30.4 million from the previous half year under review. Airtel posted a profit before tax from continuing operations of INR 48.05 billion (USD 646 million) in its consolidated financial results for the six months ended September 30, 2021. Singtel has an effective 31.7 percent stake in Airtel.In its press release accompanying the financial results announcement, Singtel commented that there was a "solid turnaround in Airtel with double-digit increases in operating revenue led by robust mobile growth in India from customer growth and 4G upgrades. Airtel also delivered significant improvements in its African business."Singtel's other regional associates Indonesia's Telkomsel, Globe Telecom (Philippines), and AIS and InTouch, both in Thailand. Australia's Optus is a wholly owned subsidiary.Singtel said that its regional associates delivered a resilient performance despite intense competition and are surgence of COVID-19 in their markets. Indonesia's Telkomsel saw good growth in data and digital services which partially offset weakness in its legacy business. AIS in Thailand and Globe in the Philippines benefited from improved demand for broadband services although these gains were offset by higher network and spectrum investments.Mr Yuen Kuan Moon, Singtel Group CEO, said, "The prospects in the region remain bright as the demand for digital services continues to grow. We're pleased to see Airtel turn the corner, executing strongly in both India and Africa to deliver a profit turnaround. Airtel is set to benefit from the Indian government's latest reforms to ensure the healthy growth of the industry and support India's digital ambitions. This positions Airtel to contribute sustainably to Singtel and our recent participation in Airtel's rights offering demonstrates our confidence in its long-term growth potential."Pre-tax profit contribution to Singtel's bottom-line by Airtel's operations in India and South Asia soared 81.9 percent to SGD 376 million. Airtel's African business contributed SGD 239 million, an increase of 34.2 percent. After taking into account finance costs of SGD 450 million and a fair value adjustment of SGD 17 million,the overall net contribution was lowered to SGD 146.9 million.The price-war that was impacting mobile operators' profitability in India seem to have eased with Airtel being able to raise its ARPU (average revenue per user) to 153 rupees (USD2.06) in September from 146 rupees in the preceding June quarter. Airtel was also able to grow its customer base by 10 percent and its underlying mobile service revenue by 21 percent because of higher ARPU from increased mix of 4G customers as well as tariff hikes. Both Airtel Business and Home businesses recorded double-digit growth in operating revenues.Another factor that helped Airtel's performance was the telecom sector relief package announced by the Union Government in September to lessen the impact of the Supreme Court ruling on the Adjusted Gross Revenue (AGR)matter. The broad set of measures grants a moratorium on unpaid dues, redefines AGR to exclude non-telecom revenue and rationalises spectrum charges that telecom firms have to pay.Arthur Lang, Singtel's CFO said the pandemic has driven a surge in digital use cases and demand for broadband and mobile in India. The country's users now consume an average of 20 gigabytes per user per month, one of the highest mobile data consumption figures in the world.In its other businesses, Singtel's Optus subsidiary reported a one percent rise in operating revenue after excluding the non-recurring benefit of NBN (National Broadband Network) migration revenue. The increase was due to a mobile service revenue boost of 10 percent offset by lower equipment sales of four percent due to global supply shortages and lower retail footfall.In Singapore, operating revenue declined one percent mainly due to lower mobile equipment sales as a result of supply disruptions due to global computer chip shortages. Mobile revenue was stable as growth in 5G adoption was offset by lower voice and the decline in prepaid revenue from a smaller population of foreign workers. Fixed broadband revenue rose four percent due to an expanded customer base, increased take-up of higher speed fibre plans and higher WiFimesh equipment sales.Group Enterprise's operating revenue was stable year on year with ICT revenue growing 10 percent mainly driven by higher demand for data centre and cyber security services. Carriage service, data and internet revenue experienced low single digit declines.ICT arm NCS put in a positive performance with an increase of nine percent in operating revenue. Digital, cloud, platforms and cyber revenue contributed 48 percent of total operating revenue, up from 37 percent in the same period last year as more enterprises accelerated their digital transformation. Strong bookings of SGD 1.1 billion was recorded in the first half of the year on the back of new wins and contract renewals from the public and enterprise sectors."We are making headway in our other strategic priorities, including the rollout of commercial 5G services and unlocking the value of our infrastructure assets with the partial divestment of Australia Tower Network which operates Optus' passive telecommunications tower infrastructure," said CEO Yuen. "While COVID19 uncertainties linger, we remain focused on extending our leadership in 5G to drive growth across our core and new business by taking advantage of emerging technologies and continued disruption. These initiatives put us in a unique position to capture growth opportunities as economies open further and travel gradually resumes."( With inputs from ANI )Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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