Singtel - annual report 2017

Exposure
30% SG, threat of TPG
22% Australia, Australia regulatory review
48% regional, India price war

Lines of business
36% mobile comm, expect to be declining especially in voice and roaming
20% data and internet, increasing profits due to change in consumer lifestyle and appetite.
18% Info comm tech, increasing business in cloud computing and software as a service
12% equipment, established distribution network of handsets, apple iPhone and google Pixar phone
3% others

Growth areas
Cyber training
Mobile payments (Singtel dash )(network externalities) (airtel india payment bank license) (phillipines globe)
Shows (Philippines, singapore,  (Hollywood, Netflix, movies)
Data appetite (forced obseletion of 3G 12GB, high speed 5G data)
Sports channel
Cyber security (Japan, Australia, phillipines, nus Singapore)
Digital marketing
Internet of things

Strategy
Simon Israel, Chua sock koong

Diversification out of stagnant mobile communications to a technology company. Key risks are present but in my opinion not diwosifying out of circle of competence as acquisitions are based on utilisation of its core infrastructure. Unable to achieve organic growth in emerging business so resorting to acquisitions.(trust wave cyber security, turn amobee data analytics and digital marketing) Increased consumer base via acquisitions (in touch holdings, Bharti Telecom, Mobile) Leading to12% increase in capex

I can have exposure to the emerging technologies, backed by Singtel profitability and reliable cash flow from its dividend policy. As Singapore restructure to a smart nation, Singtel can sell the fuel that feeds the flames. Management is holding on to share and not divesting

Lines of business
Consumer - spotify music distribution, over table top video distribution, mobile payments, voice, messaging and broadband Netflix and pay TV,

Enterprise - Infocomm technology, cyber security, smart city, internet of the things, strong support from government

Digital life - digital marketing, data analytics, video

Risks
Threat of new entrants, oligopoly market and weakening pricing power, sim20 plans
Spectrum bidding (high one off expense) , moat against competitors, but limited capex unlimited profits
3 i/r hike in 2018, expected increased rate expense
Merger and a question resulting in 12% increase in capex and increased operating expense
Decrease in revenue and profits from 2013 onwards due to declining profit margin (are they cutting costs?). Increased in cash flow due to divestment of netlink. Increase in debt.

Key projects
LTA next generation ERP system
HDB future blueprint (smart urban habitat masterplan)
Smart hub analytics
E-commerce and cashless solutions
Lazada emarketplace, collaboration with polytechnics
Digital marketing with airbnb, dell, Lexus, snapchat, API partnership with social media
Distribution of shows with partnership with Sony, Warner Bros, Hollywood movie rental via HOOQ
Australia malls setup of retail Wi-Fi (vicinity, mirvac)