ICT accounts for over half of revenue at Singtel Group Enterprise

Telco's ICT services rose four per cent, driven by NCS

ICT now contributes the majority (51 per cent) of revenue for Singtel Group Enterprise, according to fourth quarter financial results ending 31 March 2019, increasing from 48 per cent in the same quarter last year.

Overall, the provider’s ICT services rose four per cent, lead by its technology integrator business, NCS, while revenue from its cyber security business was up by 11 per cent, due to strong growth across the Asia Pacific (APAC) region.

Earnings before interest, tax, depreciation and amortisation (EBITDA), which is a measure of the Group’s operating performance, was down 16 per cent with the increased ICT revenue mix, voice services decline, and pricing pressures on major public sector ICT contracts that were renewed.

In late 2018, Singtel revealed it planned on pooling the cyber security capabilities, technologies and resources of Singtel, Optus, Trustwave and NCS into a single global corporate  identity operating under the Trustwave brand.

The new company offers a range of managed security services, consulting, education and technologies to help organisations worldwide contend with the rapidly evolving external and internal threats.

Trustwave’s global cyber business now has about 2,000 security employees, a global network of ten connected Advanced Security Operations Centres (ASOCs) supported by its Trustwave SpiderLabs security team.

Furthermore, it has millions of businesses enrolled in its cloud-based security platform, more than 10,000 managed security services customers, and nearly 1,000 channel partners and numerous technology partners worldwide.

Overall, the operating revenue for the quarter rose two per cent to S$4.34 billion and was up six per cent in constant currency terms.

For the full year, the operating revenue was up four per cent to S$17.37 billion driven by growth in ICT, digital services and higher equipment sales from mobile connections across Singapore and Australia.

Having said that, overall, net profit fell 44 per cent to S$3.10 billion mainly due to an exceptional gain last year from the divestment of approximately 75 per cent of NetLink Trust (NLT), and underlying net profit declined 21 per cent on losses from Airtel, lower contributions from Telkomsel, erosion of carriage services, lower NLT contributions with the reduced stake as well as currency headwinds.

“We have executed well to our strategy amid tougher industry, business and economic conditions,” said Chua Sock Koong, CEO of Singtel Group. “The fundamentals of our core business remained strong.”

“We gained market share in mobile across both Singapore and Australia led by our product innovations, content and services that were well-received by customers. Our digital businesses Amobee and Trustwave continued to deepen their capabilities and to scale.

“Looking ahead, we will accelerate our digitalisation efforts to drive better customer experience and improve productivity and cost structure by transforming our processes."

Competitive pressure in Indonesia has eased and Telkomsel returned to revenue growth year on year, reversing declines during the SIM card registration exercise.

In Thailand, AIS’ earnings were impacted by higher network depreciation and spectrum amortisation. In the Philippines, Globe delivered another solid quarter of revenue and earnings growth from both mobile and broadband.

“We continue to be optimistic about the growth potential of our associates’ markets, with the rate of data usage growth and the plethora of digital content and services available and carried over the mobile networks,” said Chua.

“As a Group, we are committed to deliver a superior digital experience for our more than 650 million customers across the region, Our associates will continue to lead with the best network in their markets."

Furthermore, the Group is fostering a vibrant 5G ecosystem, and working with industry partners on developing 5G use cases.

The business also achieved a milestone with the world’s first cross-border 5G video call made between Singtel and Optus with augmented reality to demonstrate the potential of 5G. Optus has started to commercially roll out a 5G fixed wireless access network.