SingTel posts 9.6 per cent fall in 3Q earnings

Singapore Telecommunications Ltd, Southeast Asia's biggest phone company, reported a 9.6-per cent fall in third-quarter earnings on costs, to retain domestic customers and a slump at its Bharti Airtel Ltd unit in India.

Net income was down to Singapore dollars 902 million, or 5.7 Singapore cents a share, in the three months ended 31 December from $998 million, or 6.3 cents a year earlier, according to a statement by the company today. The result fell short of the $951.5 million average of four analysts' estimates compiled by Bloomberg.

SingTel's margin, which measures profit as a proportion of sales, was down 1.3 percentage points to 26 per cent as selling and administrative expenses in Singapore rose 22 per cent, with costs to retain and add customers increasing. Competition in Australia is hurting growth at its Optus unit and hitting earnings at part-owned Bharti are crimping profitability.

According to some analysts, the disappointment was the change in the cost structure and the decline in its margin. They add the company had been quite aggressive in terms of handset subsidies.

Third-quarter earnings before interest, tax, depreciation and amortisation from Singapore operations were down 7 per cent to $547 million, while revenue was up 3 per cent.

Mobile revenue was up 6 per cent to $491 million after the company added 61,000 customers and expanded its share of the market to 46 per cent.