SingTel profits down 1.6% on Australia competition, regulation

SingTel reported a 1.6% year-on-year fall in net profit for the September-ending quarter, to S$868 million ($710 million), with performance hit by price competition and unfavourable regulation in Australia’s mobile-phone market.

A rise in expenses and the impact of foreign exchange movements also weighed on the bottom line.

Overall revenues were just 0.8% lower than in the corresponding quarter of 2011, at S$4.572 billion, but revenues from Australia’s Optus fell by 3.6% to S$2.9 billion.

SingTel reported a 1.6% year-on-year fall in net profit for the September-ending quarter, to S$868 million ($710 million), with performance hit by price competition and unfavourable regulation in Australia’s mobile-phone market.

A rise in expenses and the impact of foreign exchange movements also weighed on the bottom line.

Overall revenues were just 0.8% lower than in the corresponding quarter of 2011, at S$4.572 billion, but revenues from Australia’s Optus fell by 3.6% to S$2.9 billion.

Besides a cut in mobile termination rates forced upon operators by Australian regulatory authorities, Optus was hurt by lower equipment sales and by service credits associated with device repayment plans, introduced in October 2011.

The subsidiary has been trying to lower costs in response to the conditions and announced 350 staff redundancies last October.

SingTel’s domestic operation reported a 4% increase in revenues, to S$1.67 billion, boosted by growth in the number of mobile-phone customers and higher sales of data and internet services.

SingTel (Singapore) now serves 3.69 million mobile-phone subscribers, giving it a market share of 46.6%, up from 46.4% in the June-ending quarter.

Pre-tax earnings from mobile-phone subsidiaries in India, Indonesia, Thailand and the Philippines rose 17%, to S$549 million, but would have increased 26% had exchange rates remained at the same level as a year earlier.

Moreover, although Indonesia’s Telkomsel, Thailand’s AIS and the Philippines’ Globe recorded stronger operational performance, India’s Bharti Airtel, in which SingTel holds a 32.3% stake, generated just S$109 million in pre-tax profit, down 16.9% year on year.

SingTel’s depreciation and amortisation charges were up 8.2%, to S$535 million, largely due to investments in mobile network upgrades, including the rollout of LTE technology in Singapore and Australia.

“In the second quarter, the Group delivered a resilient set of results,” said Chua Sock Koong, SingTel’s chief executive, in a statement.”

“In Singapore, we gained mobile market share. Optus’ focus on customer experience and yield management delivered stable earnings in a challenging market. Our associates, AIS, Telkomsel and Globe, had another quarter of solid performances,” she said.