SingTel – BT

SingTel may get boost in Europe through Cable & Wireless

Singapore Telecom will be able to stake a major claim to European markets if it acquires Cable and Wireless Worldwide (C&WW), but the integration of these two giants could be challenging at first, analysts say.

On Sunday, British daily The Independent said SingTel is considering a bid for UK-based Cable & Wireless Worldwide (C&WW).

Singapore’s largest operator has reportedly contacted investment banks in the region, as well as London, to discuss the acquisition.

SingTel has refused to comment directly on the report, saying it does not respond to ‘market speculation’.

The company derives 73 per cent of its Ebitda – earnings before interest, tax, depreciation and amortisation – from overseas through Australian subsidiary Optus and its six regional mobile associates.

Market watchers have repeatedly highlighted the need for SingTel to continue spreading its wings abroad to fuel growth.

But SingTel has not made a single purchase in the three years since it bought a 30 per cent stake in Pakistani operator Warid in June 2007 – a unit that continues to struggle for profitability.

This could change, following the appointment of new international CEO Hui Weng Cheong last month.

The former chief operating officer of SingTel’s Thai associate AIS will officially take over from current chief Lim Chuan Poh when he retires at the end of this year.

C&WW is a major player in the UK telecoms market and remains dominant in several overseas markets including the British Virgin Islands and the Cayman Islands in the Caribbean.

‘SingTel does not really have a strong position in Europe, and if it does acquire C&WW, SingTel will be able to boost its credibility and capability in serving large multi-national customers in Europe and Asia,’ said telecoms consultant Soh Siow Meng.

‘However, I do think there will be a lot of issues initially when it comes to integrating SingTel’s enterprise and wholesale operations with C&WW before any synergy can be achieved.’

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