What Investors Should Know About Singapore Telecommunications Limited’s Most Valuable Asset: Its Subscribers
Singapore Telecommunications Limited (SGX: Z74), or Singtel, is one of the three operational telcos in Singapore. The other two are M1 Ltd (SGX: B2F) and StarHub Ltd (SGX: CC3).
Singtel operates in three business segments, namely, Group Consumer, Group Enterprise, and Group Digital Life. In addition, the company has vested interests in a number of telcos across the globe. From this, we can see that Singtel is more than just a Singapore company. But to what extent does the above statement apply?
Here, a graphic from the company’s FY2017 (financial year ended 31 March 2017) annual report may give us some perspective:
Source: Singtel FY2017 Annual Report
To put the 638 million number into perspective, nearly 1 in 11 people in the world is a customer of Singtel. How did Singtel arrive at such a huge customer base? The answer lies in the company’s various associates and joint ventures. See below:
Source: Singtel FY2018 first quarter earnings announcement
From the table, we can see that the bulk of Singtel’s 638 million customers in FY2017 came from Airtel (355.7 million) and Telkomsel (169.4 million).
What’s more, we can see that the two associates grew their subscriber numbers on a year-on-year and quarter-on-quarter basis in the first quarter of FY2018.
It may be “unfair” for Singtel to claim to own all the 638 million subscribers since it only owns a portion of its associates’ shares.
As such, another way to look at Singtel’s customer count is to focus on the proportionate number of customers it has from its associates. This is reflected in the table above too.
With 249 million effective mobile subscribers as of 3 June 2017, Singtel still counts one out of 28 people in this world as its subscriber.
