‘Leadership position’ helped Singapore SingTel snag iPhone contract
Telco rings up $3.96b in full-year gains despite challenging environment
By Chua Hian Hou
SINGTEL said yesterday that its dominant market position in Singapore was a crucial factor that allowed it to lock down a deal to sell Apple’s iPhone.
The telco’s chief executive for Singapore, Mr Allen Lew, told a conference on its results yesterday that the ‘leadership position’ its 2.57 million mobile customers here had conferred on it had definitely ‘contributed to the iPhone deal’.
SingTel announced on Monday that it will launch the iPhone later this year, ending months of speculation about whether Singapore would ever get the device.
Rival telcos StarHub and M1 remain in discussions with Apple. StarHub has indicated that it was confident of securing distribution deals.
Mr Lew told the conference that the company intends to ensure that its pole position in the market is ‘maintained and unchallenged’.
It reiterated this stance in a statement accompanying its results, where it noted the focus in Singapore is on gaining market share.
SingTel underlined its strength by unveiling a solid set of numbers yesterday.
Net profit for the year to March 31 was $3.96 billion, up 4.8 per cent from the year before, with revenue rising 11 per cent to $14.8 billion.
Earnings per share for the year was 24.9 cents, up from 23.25 cents, while group net asset value per share rose to $1.32, from $1.312.
The firm declared a final dividend of 6.9 cents per share for a total payout of 12.5 cents per share.
It will revise its dividend payout ratio, from 40 per cent to 50 per cent of underlying earnings, to 45 per cent to 60 per cent.
Group chief executive Chua Sock Koong said ‘all our businesses are performing well and the group’s fundamentals are strong’ despite a challenging environment, especially in Singapore and in Australia.
The results marked her first year at the helm of the Asia-Pacific’s largest telecommunications group.
While the company maintained its double-digit earnings growth target, Ms Chua warned that the uncertain macroeconomic environment was likely to have an impact on future growth.
The chief executive for SingTel’s international operations, Mr Lim Chuan Poh, said the global credit crisis had impacted the company in another way.
Tighter credit meant fewer competitors for deals but also fewer deals as potential sellers pulled back, worried that they would not get a good sale price in such a climate.
In the last 15 years, SingTel has spent about $18 billion acquiring stakes in foreign, high-growth telcos such as India’s Bharti Airtel and Indonesia’s Telkomsel.
In a report issued after the results were released, DBS Vickers maintained its ‘hold’ rating on SingTel and set a price target of $3.98.
While SingTel had shown ’strong results’, said analyst Sachin Mittal, its 6.9 cent dividend ‘fell short of our expectations of 15 cents’.
SingTel shares fell two cents to $3.73.
Source : Straits Times - 15 May 2008
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