Dear Shareholders,

The world was thrust into unchartered territory as we moved into the last quarter of our financial year. The emergence of COVID-19 has disrupted not just lives but livelihoods, upending global supply chains and throwing already softening economies off course, many possibly into recession. This added to the structural pressures we are facing in our core business, most keenly felt by Optus this financial year. Combined with adverse regulatory outcomes in India, we’ve had one of our most trying years.  

WORKING TOWARDS POST-COVID RECOVERY

Travel and movement restrictions have impacted our roaming and prepaid revenues while slowing economic growth has dampened business spend. While these factors exacerbated structural shifts in industry, we did gain market share across our Singapore mobile and fixed services as well as our enterprise business, particularly as corporations and government agencies intensified digitalisation, which also added to NCS’ strong order book.

Importantly, while the pandemic has affected our business, it has also created significant opportunities. We’ve seen unprecedented digital adoption by consumers and enterprises as a result of stay-at-home and work-from-home provisos. Having digitalised our operations and services in recent years, we’ve responded to this extraordinary shift online and increased demand for our services almost seamlessly. As such, we are well positioned to leverage this accelerated digitalisation to grow both our core and digital businesses. Given the prevailing uncertainties however, we have strengthened our liquidity and have secured additional credit facilities as we work towards a post-COVID recovery and embark on our 5G rollout.

LEADING THE WAY IN 5G

5G is going mainstream around the world this year and we are excited to lead and shape 5G in Singapore, having won our licence that will bring 5G coverage to at least half the country by end-2022 and nationwide coverage by 2025. Our approach to 5G will be differentiated from 4G as we move beyond access and connectivity to create new enterprise use cases and innovative platforms, applications and services to reposition ourselves for growth in the converging ecosystem of tech and telco.

This multi-year capital commitment will be a significant investment in not just our company’s future but that of the wider community. 5G will be transformative for industries and business models, unlock new careers and create sustainable economic and social value in the process. Optus in Australia continues expanding its 5G network having launched a full suite of 5G services in both mobile and broadband last November. Our associates are also advancing their 5G strategies and the Group will harness its scale to progress this next-generation technology across our footprint.

Strong showing by associates

It’s been a tough two years in India as the latest market entrant brought unprecedented disruption. The good news is this has resulted in consolidation into a three-operator market where Airtel is emerging a key beneficiary as it regains market share. While we have recognised S$1.6 billion as our share of Airtel’s regulatory losses this year, we believe a recovery story is in the making, particularly as Airtel has successfully raised capital and strengthened its balance sheet and the country’s push towards Digital India shows no signs of waning.

In Thailand, AIS delivered strong growth for the year but also managed to reinforce its network leadership with its recent 5G spectrum win. In the Philippines, Globe recorded double-digit growth in operating revenue and EBITDA on sustained data growth. Telkomsel continued to lead with its superior network and digital offerings although its performance was affected by lower voice and SMS revenues and greater competition outside Java. We continue to see immense potential in our associates’ markets, driven by increased smartphone penetration and expanding digital economies.

heeding the call to serve

The pandemic and last year’s bushfires in Australia have made it clear we play a special role in the community that requires us to support society during times of crisis. Each time a bushfire triggered outages to fixed line and mobile networks in Australia, our service staff worked long hours in difficult conditions to get our networks back up and running. Similarly, when COVID-19 rendered most of us homebound, our staff understood that people rely on us and much of the essential work we do cannot be done from home. I’m grateful that our call centre and retail staff, network engineers and technicians, and IT staff serving other essential services providers have been travelling to work daily to support our essential and critical functions. The public’s trust in us has gone up due to our resilience and commitment to serve.

emerging stronger with our community

Besides raising S$3 million for special education schools which have been the key beneficiaries of the Singtel Touching Lives Fund for some years now, we also rendered support to segments of our society impacted by COVID-19. By matching staff contributions dollar for dollar, we raised another S$2 million in total, channelling this to 18 charities including the Courage Fund supporting healthcare workers and vulnerable groups. As many worked from home, we made digitalisation more accessible by granting free connectivity and collaboration software to SMEs in Singapore and Australia while providing free entertainment to the Singapore public. You have my commitment that we will continue to do our part to help.

I would like to thank all our staff for displaying such grace under pressure at this moment in time when the work we do is its most critical. I would also like to thank our Board for their guidance and our Management and Union for their dedication to navigating the ongoing crisis. It is my firm belief that we will emerge stronger with our community.

Yours sincerely,

CHUA SOCK KOONG
Group Chief Executive Officer