SINGAPORE (THE BUSINESS TIMES) - The headwinds and challenges brought on by Covid-19 have provided Singtel tailwinds of digitalisation that the telco intends to exploit to propel it forward, chairman Lee Theng Kiat and chief executive Yuen Kuan Moon said in the company's latest annual report.
In the report published on Wednesday (July 7), Mr Yuen and Mr Lee noted that the pandemic has "pushed things over the technology tipping point, amplifying trends that are redefining the basis for success for (the telecommunications) industry" as the group's business processes moved online over the past 18 months amid lockdowns and physical distancing.
Singtel first announced plans for a strategic reset on May 27 this year, the day it reported a 92.7 per cent decline in second-half net profit to $87.6 million from $1.2 billion in the year-ago period.
The three-pronged strategy will focus on reinvigorating the telco's core business to capture 5G market share; developing new growth engines in information and communications technology (ICT) and digital services; and unlocking the value of its infrastructure assets.
In the company's annual report, Mr Lee and Mr Yuen said that Singtel's quest for 5G market share in Singapore and Australia entails innovating products and services to deliver the best possible customer experience, and growing digital businesses in adjacent lifestyle sectors.
The group will focus on growing 5G enterprise, cloud and more holistic technology solutions in Singapore, Australia and the group's regional associates.
Singtel said it is also doubling down on the digitalisation of its operations to drive productivity and make cost improvements.
After identifying NCS as a key growth engine for the group, Singtel is now recasting its ICT subsidiary as a pan-Asian business-to-business (B2B) digital services provider.
NCS will seek out new business - in telecoms, healthcare, transport, communications, technology, media and financial services - in Singapore, Australia and Greater China.
"This is a major turning point for NCS, which has already begun building new capabilities to expand its scope of business," commented Mr Lee and Mr Yuen.
The group also intends to adopt a multi-local strategy when working with associates to create and port lifestyle products, services, business segments or even companies, across their regional footprint, to capitalise on Asean's digital economies.
Having previously announced its intention to unlock value of its infrastructure assets, the group said it is open to forming alliances with "suitable partners with more experience and direct focus on these assets" to further increase network utilisation, provide funding for new builds and improve operating efficiencies.
Singtel strategic portfolio CEO Samba Natarajan wrote that the group remains focused on further investments in next-generation infrastructure and sustainable technologies.
"We will also be focusing more on asset right models for segments that we believe can be operated and better valued as stand-alone businesses, while not having any adverse impact on our market position or network superiority. We will look to capitalise on strong investor interest in digital infrastructure assets as part of the new group strategy to drive monetisation and value crystallisation across the portfolio," said Mr Natarajan.
In the annual report, Singtel's group chief financial officer Arthur Lang said that adopting an asset right approach across the group to unlock value through capital recycling will strengthen the group's balance sheet.
This will also enable the group to reallocate capital to meet its funding requirements and reinvest the proceeds in key growth areas, he added.
Of the partial sale of the towers of its Australian unit Optus in the country, Mr Lang said: "We have received significant interest from strategic and financial investors and expect to close the transaction before the end of this year."