S6.79478 corporate final F3 Dn 16/6/04 12:59 PM Page 14 “SINGTEL HAS TRANSFORMED ITSELF INTO A MAJOR PLAYER ON THE WORLD’S TELECOMMUNICATIONS STAGE. AT ITS CORPORATISATION IN 1992, THE COMPANY HAD REVIEW OF THE GROUP’S ALMOST A PURELY DOMESTIC BUSINESS. TODAY, IT HAS OPERATIONS AND INVESTMENTS IN MORE THAN BUSINESS & OPERATIONS 20 COUNTRIES AND TERRITORIES AROUND THE WORLD.” services. For example, push-button phones and a fully digital network installed by SingTel more than a decade ago have made possible services such as phone-banking and broadband Internet The SingTel Group had a year of robust financial results delivering record revenues and profits. that many in Singapore have been enjoying over the years. Operating revenue for the year was a record S$12.0 billion while net profit (pre-goodwill), even after excluding exceptional gains from divestments, was at an all-time high of S$2.85 billion. Technology advancements in the wireless world saw the introduction of mobile communications – alert tone and automatic paging in 1973 and 1983 respectively, as well as mobile phone services Reflecting SingTel’s multinational profile, operations outside of Singapore contributed 75 per in 1977, with a handheld version in 1988. In 1989, Singaporeans became the first in the world cent of the Group’s enlarged revenue (including its proportionate share from associates) and to enjoy paging and mobile phone services underground on the Mass Rapid Transit system. 66 per cent of its earnings before interest, tax, depreciation and amortisation. SingTel’s introduction of the digital GSM cellular system in 1994 was a milestone in its history; The Group’s strong performance was driven by a three-pronged strategy – maintaining its it set the stage for the widespread use of mobile phones, very much an integral part of today’s leadership position in Singapore, increasing its market share in Australia and growing its regional lifestyle. In the same year, SingTel introduced its customers to the captivating world of the mobile franchise. Internet through SingNet. Despite intense competition and pricing pressures, SingTel continued to generate strong cash With the immense popularity of the mobile phone and the Internet, it is perhaps not surprising flows and keep its operating margin at 50 per cent in Singapore. Revenues were however affected that the industry buzz presently is about more convergent services such as next-generation by the outbreak of Sars and the start of the war in Iraq at the beginning of the financial year. mobile services, including 3G and wireless broadband Internet. The company benefited from the growing popularity of broadband and mobile data services LOOKING BEYOND SINGAPORE among consumers. In the corporate market, SingTel continued to expand its global customer In the late 1980s, SingTel began to actively seek investment opportunities beyond its shores as base, especially from among multinational corporations in Hong Kong, Japan, Europe and the part of its strategy for long-term growth, given the small size of its home market. United States. Examples of early investments included a mobile phone company in Norway and cable TV In Australia, SingTel Optus sustained its revenue momentum, growing approximately three operations in the UK and Sweden. At that time, investment opportunities were more abundant times faster than the market as a whole. For the year, operating margins for all three of its divisions in Europe compared to Asia, where there were more regulatory hurdles. expanded and net profit for the company rose 38 per cent. In the late 1990s, as Asia began liberalising its telecommunications industries, SingTel focussed Optus’ sterling performance was a result of the company’s focus on market differentiation, its investment efforts in the region where it had a comparative advantage in terms of geographic high value and high margin customers, aligning costs to revenues, strong capex management proximity, and understanding the local culture and language. and leveraging the scale of the SingTel Group. SingTel has transformed itself into a major player on the world’s telecommunications stage. SingTel’s mobile associates in Asia also delivered solid results. The Group’s share of ordinary At its corporatisation in 1992, the company had almost a purely domestic business. Today, it earnings from its regional mobile business – Advanced Info Service (AIS), Bharti, Globe has operations and investments in more than 20 countries and territories around the world, and Telkomsel – rose 70 per cent during the year. SingTel and its partners now serve more than deriving more than two thirds of its earnings from abroad. 47 million customers in six markets – Australia, India, Indonesia, the Philippines, Singapore and Thailand. SingTel and telecommunications in Singapore have come a long way since 1879. The first private telephone exchange back then had just 50 lines. Today, SingTel and its associates serve close to Mobile communications is now the most important part of the Group’s business. Mobile services 50 million mobile phone users in the Asia Pacific. contribute 38 per cent of its operating revenue compared to just 18 per cent three years ago. The SingTel story does not end here. It continues with the 19,000 dedicated employees of the During the year, SingTel took significant steps to rationalise its investments and focus on its Group located around the world. They are committed to the Group’s mission of providing the core telecommunications business in the Asia Pacific. Following a strategic review, it divested best in communications to help people bridge boundaries and develop relationships, and a number of major non-core assets including its investment in Belgian telco, Belgacom, doing their best for our customers, shareholders and the community. a 69 per cent stake in Singapore Post and the Yellow Pages directories business in Singapore. These divestments and related transactions raised net proceeds of close to S$3.3 billion. 14 15 S6.79478 corporate final F3 Dn 16/6/04 12:59 PM Page 16 IN SINGAPORE Although Singapore is a highly developed telecommunications market with high penetration rates for many services, SingTel still enjoyed strong growth in demand for its broadband and mobile data services. The number of users on SingTel’s broadband ADSL (Asymmetric Digital Subscriber Line) network jumped close to 60 per cent as more people discovered the benefits of faster Internet access. Demand was boosted by SingNet’s compelling price plans such as the 512kbps JetP@ck plan, the most affordable broadband package in the market with a basic plan at just S$19.95 per month. To offer customers more value and usage flexibility, SingNet BroadBand introduced a Bandwidth-On-Demand service to enable customers to enjoy a dedicated download speed of up to 1.5 Mbps as and when needed, paying only for what has been used. Demand for SingNet BroadBand was also driven by a wide range of business products and value-added services such as islandwide high-speed outdoor wireless surfing (Outdoor Wireless Surf). Collaborations with organisations such as the National Library Board – which runs 23 public libraries – increased the number of SingTel wireless surf zones in Singapore to more than 230. To enable wireless surfing for mobile customers who travel frequently, SingTel introduced the Overseas Wireless Surf service, allowing postpaid mobile customers to access more than 4,000 wireless hotspots worldwide. SERVING MOBILE CUSTOMERS Data services on mobile phones – such as SMS, downloads and e-mail – continued to be popular, accounting for 17 per cent of the average revenue per user, up from 14 per cent the previous year. The popularity of SMS has extended to businesses, where many, including small and medium sized enterprises, are using SingTel’s BizLive SMS service to distribute permission-based information to their own customer database. Uses of this SMS platform include alerts of promotions, appointment reminders, restaurant bookings and customer surveys. Despite the introduction of mandatory Mobile Number Portability (MNP) in August 2003, SingTel has maintained its customer base at above 1.5 million. The introduction of new price plans – with features such as free incoming calls, extra bundled talktime and calls to a home or mobile number from just one cent a minute – helped SingTel to maintain its monthly postpaid churn at a low 1.5 per cent. SingTel continued to pioneer developments for mobile applications during the year. An SMS portability solution conceptualised by SingTel’s engineers was adopted by all mobile operators for the implementation of MNP in Singapore. In October 2003, SingTel became the first operator in the world to offer General Packet Radio Services (GPRS) roaming services in India through Bharti Cellular. Later in the year, it launched CitySim, the first prepaid mobile service for visitors to Singapore, and Gunslingers, Asia’s first location-based multi-player mobile game. 17 S6.79478 corporate final F3 Dn 16/6/04 12:59 PM Page 16 IN SINGAPORE Although Singapore is a highly developed telecommunications market with high penetration rates for many services, SingTel still enjoyed strong growth in demand for its broadband and mobile data services. The number of users on SingTel’s broadband ADSL (Asymmetric Digital Subscriber Line) network jumped close to 60 per cent as more people discovered the benefits of faster Internet access. Demand was boosted by SingNet’s compelling price plans such as the 512kbps JetP@ck plan, the most affordable broadband package in the market with a basic plan at just S$19.95 per month. To offer customers more value and usage flexibility, SingNet BroadBand introduced a Bandwidth-On-Demand service to enable customers to enjoy a dedicated download speed of up to 1.5 Mbps as and when needed, paying only for what has been used. Demand for SingNet BroadBand was also driven by a wide range of business products and value-added services such as islandwide high-speed outdoor wireless surfing (Outdoor Wireless Surf).