Management Discussion and Analysis

The regional associates continued to ramp up their investments in network infrastructure, spectrum and content to drive data and digital growth during the year.‍

Telkomsel continued to face intense competition outside Java and pressures on its legacy business. Overall operating revenue rose 2.0% with growth in data and digital services offsetting lower voice and SMS revenues. EBITDA increased on higher revenue and lower operating lease expenses. Despite higher depreciation from right-of-use assets and increased startup losses from its fintech associate, Telkomsel’s post-tax profit rose 2.5% due to the reduction in corporate tax rate from January 2020. With a stronger Indonesian Rupiah, Telkomsel’s post-tax contribution increased 5.0% in Singapore Dollar terms. ‍

AIS’ service revenue (excluding interconnect and equipment rental) grew 4.8% from both mobile and fixed broadband services. EBITDA increased on revenue growth and lower payments from a new partnership agreement with TOT Public Company Limited signed in September 2019. Including higher depreciation and spectrum amortisation charges, AIS’ post-tax profit grew 1.0% and in Singapore Dollar terms rose 6.5% from a stronger Thai Baht.

Intouch’s post-tax profit contribution was stable as a higher contribution from AIS offset the decline in Thaicom’s satellite business. With a stronger Thai Baht, post-tax profit contribution rose 4.4%. ‍

Globe delivered a strong performance with healthy growth in service revenue and EBITDA of 10% and 11% respectively from data and home broadband services, fuelled by the increased popularity of streaming, on-demand video content and gaming. Despite higher depreciation charges from an expanded network and share of increased equity losses from its associates, Globe’s post-tax profit rose 6.6% and in Singapore Dollar terms grew 11% from a stronger Philippine Peso. ‍

Airtel has started to turn the corner with the consolidation in the Indian mobile market. The mobile price hikes in December 2019 have lifted Airtel’s mobile revenue by 11% and driven strong 4G customer gains. Overall operating revenue from India and South Asia grew 7% and EBITDA rose steeply by 47% on revenue growth and lower operating lease expenses. Despite higher depreciation and amortisation charges and increased finance costs, the Group’s share of ordinary net loss reduced by 4.8% to S$350 million. ‍

Airtel Africa was listed on the London Stock Exchange and Nigerian Stock Exchange in July 2019. It maintained its strong momentum with revenue and EBITDA up 14% and 29% respectively in constant US Dollar terms across voice, data and mobile money. Airtel’s stake in Africa was diluted to 56.0% as at 31 March 2020 (31 March 2019: 68.3%). Consequently, including increased foreign exchange losses from currency headwinds and higher tax expense, the Group’s share of Airtel Africa’s ordinary net profit declined 53% to S$68 million.  

With the absence of large tax credits, the share of Airtel group’s underlying net loss increased to S$296 million (FY 2019: S$131 million). Including the share of Bharti Telecom Limited’s ("BTL") net loss of S$63 million (FY 2019: S$40 million) mainly from higher net finance expense on borrowings, the total share of underlying net losses of Airtel group and BTL doubled from a year ago to S$359 million.

Airtel recorded significant exceptional charges during the year which have been classified as exceptional items of the Group. The exceptional items comprised mainly regulatory costs including provisions and interest relating to the adjusted gross revenue matter, and a one-time spectrum charge. Including the share of Airtel’s net exceptional charges of S$1.80 billion, the overall contribution from Airtel and BTL was a net loss of S$2.16 billion, compared to a net profit of S$34 million last year.