SingTel opts to retain Optus’ satellite business
14 Aug 2013
Singapore Telecom Ltd (SingTel), the island nation's largest telecom company, has said that it would not proceed with the sale of the legacy satellite business of its Australian subsidiary SingTel Optus Pty Ltd. (Optus).
Earlier in March, SingTel had initiated a strategic review of the Optus satellite business with Credit Suisse and Morgan Stanley.
''Based on the review, SingTel is committed to growing and investing in the satellite business,'' the company said in a brief statement today without elaborating more details.
SingTel is majority owned by Temasek Holdings, the investment arm of the Singapore government. Besides Singapore and Australia, the group has investments in Thailand, India, Bangla Desh, Africa, Philippines and Indonesia.
Sydney-based Optus is Australia's second-largest telecommunications company and the only one in Australia to own and operate a fleet of five satellites providing premium services across Australia and New Zealand for over 25 years.
The satellites deliver free-to-air and pay television, mobile telephony and broadband services to over 2 million households and multi-national companies. Its customers include Australian Broadcasting Corporation, Foxtel, NBN Co, Department of Defence and Air Services Australia among others. Another Optus satellite is scheduled for launch next year.
SingTel's consumer CEO Paul O'Sullivan told reports that the Optus satellite division is a ''terrific business'' that dominates the Australian and New Zealand footprints.
"It's a very modern fleet, and it was all updated over the last decade, and it is one of the youngest fleets in the industry," O'Sullivan said.
''Obviously, we'll keep our options open and keep reviewing the landscape, but right now the conclusion is to keep the business and invest in it, and grow it under our own flag. Clearly, there will always be options for us to consider things in the future like an IPO," he further added.
Today, SingTel group reported a 7-per cent rise in net profit at $790 million in the second quarter compared to last year. Revenue for the quarter fell 5.3 per cent to $3.4 billion from $3.6 billion a year ago quarter.
A similar trend was reported in the Australian business as well. Net profit increased by 7 per cent to $152 million in the June quarter while revenue for the period rose 5.3 per cent to $1.9 billion from $2 billion last year.
