SINGAPORE – SingTel, Southeast Asia’s largest phone firm, missed forecasts with flat quarterly earnings as a strong Singapore dollar crimped contributions from its Asian mobile businesses, sending its shares to a four-week low.

Singapore Telecommunications Ltd, which generates about three-quarters of its sales abroad, cut its guidance for earnings contributions from foreign operations and warned that a strong Singapore dollar would hurt its performance.

The currency has risen more than 7 per cent against the US dollar over the last 12 months.

‘The major disappointment came from regional associates’ contribution,’ said Morgan Stanley analyst Navin Killa. ‘While Singapore and (Australian unit) Optus have shown steady growth in revenues, both businesses face margin pressure due to rising competition.’

SingTel shares fell more than 3 per cent on Tuesday and were down 2.5 per cent at S$3.49 by 9.28am, while the broader market fell 0.3 per cent.

Mr Killa, who rates SingTel ‘equal-weight’, recommends investors switch to rival StarHub for exposure to Singapore, and invest directly in SingTel’s affiliates, India’s Bharti Airtel, Indonesia’s Telkomsel and Advanced Info Service in Thailand for exposure to the region.

‘The pretax earnings contributions from the regional mobile associates are expected to grow at low double-digit level and at a pace slower than the past two years,’ the company said.

Pressure at home

SingTel, Singapore’s largest listed firm valued at over US$40 billion, made April-June underlying net profit, before goodwill and exceptionals, of S$865 million (US$612 million), versus S$868 million a year ago, and missing an average forecast of S$930.3 million.

First-quarter attributable net profit was S$878 million, down 5.3 per cent from last year’s S$927 million.

Facing a domestic market of just 4.6 million people where virtually everyone has a mobile phone, the firm has spent S$18 billion in recent years buying stakes in operators in high-growth Asian countries such as India and in Australia.

Speaking to reporters after the results, SingTel CEO Chua Sock Koong said the group was still looking for acquisitions.

‘Our investment focus remains in Asia, but we are trying to learn about new markets in the Middle East and Central Asia. That is in the early stages.’

iPhone launch Aug 22

SingTel, which confirmed it will launch Apple’s third-generation iPhone in Singapore on Aug 22, reported group operating revenue rose 5.9 per cent to S$3.78 billion.

Optus, SingTel’s single-biggest revenue and profit generator, posted flat net profit of A$122 million (US$108 million) after depreciation charges.

Australia’s second-largest mobile operator, which holds a third of the mobile market, faces cut-throat price competition, slowing subscriber growth and regulatory changes in a saturated market.

SingTel also owns big stakes in six emerging market mobile operators, including Globe Telecom in the Philippines, India’s Bharti Airtel and Telkomsel. Most have shown phenomenal growth in wireless subscribers in recent years.

But growth has slowed visibly. Pretax profit from mobile associates in the quarter fell 11 per cent to S$582 million, hit by the strong Singapore currency, lower earnings from Telkomsel and Globe, and losses from Pakistan’s Warid Telecom. — REUTERS

THE first bout in Singapore’s re-invigorated mobile landscape has gone the way of Singapore Telecommunications, with the company reporting the largest increase in cellular subscribers for the second quarter of this year.

SingTel added 182,000 new local customers for the three months ended June 30, bringing its cell-phone user base here up 6.6 per cent to 2.75 million.

The increase was the largest among the three local operators for the quarter, a period which marked the introduction of true mobile number portability (MNP) in Singapore.

The new government directive, which took effect on June 13, is aimed at intensifying competition in the mobile sector by allowing subscribers to easily switch operators while retaining their current phone numbers. In the wake of MNP, all three telcos have increased their marketing efforts and upped handset subsidies to retain and attract customers.

In the second quarter, StarHub added 178,200 subscribers to bring its cellular user base to 1.8 million. M1 recorded the smallest customer gain of 57,000 to take its customer tally to 1.6 million.

Collectively, Singapore’s handphone subscriptions have now swelled to 6.15 million, translating to a mobile penetration of 134.2 per cent.

According to SingTel, its subscriber growth in the second quarter was fuelled by strong demand for its prepaid mobile business, especially among the growing population of foreign workers. The group added 151,000 new prepaid customers in the quarter, cementing SingTel’s lead in this space with a total of 1.34 million customers.

On a regional level, SingTel, which reports first-quarter results today, said its total number of mobile customers in Asia has reached a new of high 197.71 million in June.

The group’s cellular subscriber base across eight markets – Australia, Bangladesh, India, Indonesia, Pakistan, the Philippines, Singapore and Thailand – grew 45 per from 136.35 million a year ago. On a quarterly basis, the increase was 6.7 per cent.

Excluding Pakistani telco Warid, SingTel’s regional associates grew their customer bases from 14 per cent to 63 per cent in the second quarter compared with 2007, the group said in a statement yesterday. For example, Indonesia’s Telkomsel added 1.11 million customers, while Philippines-based Globe boosted its customer base by 1.46 million.

SingTel’s Indian associate Bharti, the country’s largest telco, recorded the biggest improvement with 7.4 million new subscribers during the period, bringing its total to 69.38 million customers.

Singapore Telecommunications Limited has officially confirmed that it will launch the much-anticipated iPhone 3G in Singapore on Aug 22.

‘Consumers who have registered will be given first priority,’ SingTel Singapore CEO Allen Lew said at the company’s results briefing earlier today.

He added ‘tens of thousands’ of potential buyers have registered their interest at SingTel’s iPhone Web site since it was launched in June, and the company is confident that it ‘can meet the demand’. Consumers have until Sunday to submit their pre-orders with SingTel for Apple’s second-generation touch-screen phone. The upgraded model boasts of enhanced features such as support for faster Internet speeds and satellite positioning.

The company is set to reveal pricing details for the iPhone over the coming week.

SingTel is the first local operator to bring the device to Singapore but rivals StarHub and M1 are confident of landing a similar deal by the end of this year.