We are a long-term strategic investor in our regional mobile associates, and have played a significant role in developing the telecommunications industry of their respective countries.

In the last two decades, our associates have made massive investments in mobile infrastructure, boosted mobile penetration levels and, in the process, created employment and contributed to their countries' economic development. As our associates have grown, they have become major contributors to their respective countries' economies, and are also a major component of Singtel's growth.

Our associates are now transitioning from traditionally voice- and text-heavy businesses to expand into data-centric services. By drawing on the rich experience of our operations in Singapore and Australia in mobile data as well as the collective expertise of the group, we are now helping our associates embark on the next phase of growth. We are achieving this with closer engagement with our associates and deriving greater synergistic benefits from technology, product development and customer offerings.

TRANSFORMING INTO DATA-CENTRIC OPERATIONS

The current average internet penetration in the associate countries is between 12% and 36%, significantly below the level of more developed countries such as Singapore or Australia, where internet penetration levels have reached about 78%, according to statistics from The World Bank.

In these emerging markets, the majority of the population will be experiencing the internet for the first time via their mobile phones, due to the lack of fixed-line infrastructure. There is huge potential for our associates to grow as the mobile internet penetration rate is set to rise in these markets. To capture these opportunities, our associates are transforming their businesses.

They are investing heavily to acquire additional spectrum, roll out high-speed mobile data networks, drive smartphone adoption and offer new products and services to serve the needs of their customers, thus transforming the way people live, work and play.

Next year, our associates will collectively invest S$7 billion in capital expenditure, of which a large percentage will be used to install mobile data networks to serve more people.

AIS, our associate in Thailand, launched 3G services in May 2013 after acquiring the necessary spectrum in late 2012. As at 31 March 2014, its network covered 90% of the population. AIS will achieve 95% coverage of the population by end 2014. Currently, 62% of its customers are on 3G. AIS will continue to strengthen its network quality and expand network capacity in dense areas by adding small cells and accelerating fibre optic expansion. Its fibre transmission will support growing mobile data demand, as well as new potential wired-broadband services.

In February 2014, Airtel acquired 115 MHz of mobile spectrum for US$3 billion to ensure business continuity as well as additional network capacity to support the phenomenal mobile data growth into the next 20 years. Airtel has launched commercial LTE in four major cities to serve the increasing data demand from customers. By March 2014, Airtel Africa had grown its mobile data customer base to 22.3 million, accounting for 32% of its total customer base. In its African markets, Airtel offers 3G services in 15 countries across the continent.

Similarly, Globe's network has significantly expanded in terms of capacity, coverage and capabilities since it started its network transformation programme in 2011. Over the last two years, Globe has invested over US$790 million in its network and completed the change out of its legacy network with more than 22,000 base stations nationwide. Its 3G footprint now covers 90% of the population. Globe is the first operator to launch LTE in the Philippines and has since completed the pilot deployment of LTE in key commercial business districts and tourist destinations.

In Indonesia, Telkomsel continued to allocate more capital expenditure to 3G mobile base stations. It will have more than 36,000 3G mobile base stations by the end of 2014, accounting for 41% of its total stations. Telkomsel is the first Indonesian operator to successfully complete an LTE trial. The trial, carried out during the 2013 Asia Pacific Economic Cooperation meeting in Bali, recorded download speeds of 61Mbps.

DELIVERING A COMPREHENSIVE MOBILE EXPERIENCE

Our associates have also introduced a range of innovative products and services to help customers fully experience the power of mobile data in the digital world. This has led to more customers using the faster networks and consuming more mobile data.

Thanks to the faster speeds of its 3G 2100 MHz network, AIS can now support a wider range of applications including video streaming. Its AIS Mobile Barclays Premier League app allows football fans to enjoy live broadcasts of matches through their smart devices. In addition, its mPay Rabbit enables customers to conveniently pay for their Bus Rapid Transit and Bangkok Mass Transit System fares, as well as food items, at well-known shops via Near Field Communication technology.

Globe initiated an industry breakthrough with a suite of mix-and-match postpaid plans that allow customers to tailor their own combination of calls, texts and data allowance. GoSAKTO was introduced to prepaid customers, allowing them to customise their voice, SMS and mobile data usage to best suit their lifestyle. GoSAKTO has won the Global Mobile Awards 2014 for the Best Network-based Solution for Serving Customers.

Mobile commerce is another area with growth potential in the emerging markets. Airtel rolled out Airtel Money to all 17 African countries it operates in, to enable transactions for customers in rural areas where banking facilities are not widely available. As at 31 March 2014, Airtel Africa registered an increase of 800,000 Airtel Money active customers from a quarter ago to reach a total of 3.5 million active customers. This boosted the total quarterly value of transactions from US$1.7 billion to US$2.2 billion.

DERIVING GROUP BENEFITS

There are significant scale benefits we drive as a collective group. Together, we share business insights and experiences that help shorten the learning curves for our associates and lead them to compete more effectively in their respective markets.

At the end of 2013, we set up Centres of Excellence (COEs) to help our associates acquire capabilities in areas of customer loyalty, analytics, carriage of mobile video, innovative products and data monetisation in their markets.

In April 2014, the COE on Innovative Products announced a partnership with Samsung to bring a seamless and richer data experience to the Group's customers. Singtel and its associates came together on 11 April 2014 to launch Samsung's flagship mobile device, the Galaxy S5.

In the near future, our associates' customers will be able to pay for their apps from Samsung's application store by deducting the amount from their prepaid credit balance or through their monthly postpaid bills. In the emerging markets, where credit card use is still low, this brings convenience to customers and provides a differentiating advantage over competitors.

Since 2013, we have been providing technical expertise and support to help Airtel Africa expedite 3G network implementation in several African countries. This has significantly lifted its network performance and data revenue.

For other examples of collaboration efforts, refer to the Group Digtal L!fe review.

Our associates are an important part of the Group, and we remain committed to working closely with them to deliver the best experience for our customers in the digital age.