Still buffering: Why SingTel is wary of Internet investments

The telco giant is sticking to its old guns.

SingTel is sticking to its tried and tested formulas when it comes investments. In spite of pouring $2b into its digital platform this year, the group announced today that it remains “cautious” on investing in Internet companies.

According to SingTel’s Annual Report for FY14, the group is expanding and reinventing itself in a bid to maintain relevance in the mobile internet era.

“However, with valuations of internet companies at record-high levels, we have been cautious in our investments. We are focused on investments with proven business models and cash returns, as well as businesses that can leverage the Group’s scale of over half a billion mobile customers,” stated SingTel chairman Simon Israel.

Here’s more:
The changes in customer behaviour have also brought new competition into the telecommunications space.

Digital or over-the-top (OTT) companies now offer a myriad of online services and mobile applications, which threaten telcos’ traditional revenue streams from voice, SMS, TV and data services.

The good news: the relevance of our network cannot be ignored – it is the highway for mobile data traffic, and puts us in an enviable position to address the growing demand for mobile data. We are in the right business and have the right assets to capture and monetise this growth.

Our goal is simple – we want to generate profitable returns by helping customers do more on their connected devices and networks. With this goal firmly in sight, we made good progress on our
transformation plans in FY2014.

In our core business, we have restructured our voice-centric price plans to capture the growth in mobile data
consumption. The new plans are a big step towards delivering returns on our network and spectrum investments.

We also streamlined our distribution, touchpoints, systems and processes to enhance operations efficiency and customer experience. SingTel is now stronger and more agile than ever to deal with the challenges ahead.

Our regional mobile associates are similarly reinventing themselves to capture the growth in mobile internet,
with significant investments in mobile networks, spectrum and data-focused offerings targeted at emerging market consumers.