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Carrier Services
Leading telcos bearing up to economic challenges in Japan and Singapore
Dip in net profit but revenue up slightly for NTTDoCoMo and SingTel
by Ek Heng, Asia-Pacific Correspondent
Singapore Telecommunications Ltd (SingTel) announced a net profit of S$903 million (US$610 million) for the period January-March 2009, reflecting a drop of 17 percent from last year.
The telco attributed the profit decline to Singapore’s strong dollar against regional currencies where it has stakes across seven countries. Despite its resilience in facing up to economic challenges, especially in Singapore and Australia, it said in a statement, unfavourable currency fluctuation between 6 to 21 percent had negative impact on its financial results.
The group revenue for Q4 2008 is S$3.57 billion (US$2.41 billion), a drop of 5.1 percent but total revenue for the year at S$14.93 billion is marginally higher by 0.6 percent. Its overseas operations account for 70 percent of the group’s revenue.
The largest telco in South East Asia, SingTel’s regional mobile customers grew by 35 percent or 64 million in absolute numbers to nearly 250 million for the full year. It has a free cash flow of S$3.25 billion, a decline of 9 percent from the same period last year. The telco declared a dividend of S6.9 cents, which added to an earlier interim sum of S5.6 cents, total S12.5 cents, similar to last year.
DoCoMo holds its own despite competition
Meanwhile, Japan’s NTT DoCoMo recently reported a full-year net profit of JPY471.9 billion (US$4.93 billion) for the period ending 31 March, a marginal decline of nearly 4 percent from last year. However, its operating profit at JPY830.9 (US$8.58 billion) is 2.8 percent higher than last year’s figure.
In a statement, it reported achieving revenues of JPY4.45 trillion (US$46 billion) for the year in review, down from JPY4.71 trillion (US$48 billion) previously. The telco gained 1.21 million subscribers to have a total 54.6 million customers, of which nearly 90 percent are 3G customers. It has 50 percent share of the Japanese mobile market.
As a result of competition within this mature market, new strategies pursued during the year, which included new discount programmes and new handset sales methods, enabled the telco to reduce churn from 0.80 percent to 0.50 percent. The telco declared it is paying total dividends of JPT4800 (US$50) for 2008, half of which has already been paid.
Looking ahead to March 2010, the telco projects a slight increase in net profit by 4.5 percent to JPY493 billion (US$5.1 billion) on the back of JPY4.38 trillion (US$45.7 billion) in sales. It further expects that average revenue per user or ARPU may go down to JPY5280 (US$55) from JPY 5710 (US$59).
During the year, it made provisions for a one-time charge of JPY50.5 billion (US$527 million) attributable mainly to the declining value of its stake in South Korea’s KT Freetel Co resulting from a stronger yen.
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