SingTel's Bets on Southeast Asia are Paying Off

The company is growing fast, and says it's here in the U.S. not to win business from the ILECs, but to help carriers provide access to the fastest growing nations in the world.

by Alex Goldman ISP-Planet Managing Editor [July 31, 2007]

For many years, SingTel was the ILEC of the wealthy trading city-state of Singapore and little more.

In the 1990s, as Bill Chang, SingTel executive vice president of business tells it, the company decided to expand out of Singapore. At the time, revenues were about $8.5 billion, of which about 80 percent came from the ILEC and related operations in Singapore.

Although the company has maintained its market share in Singapore, only about 30 percent of its revenues now come from Singapore, he says.

One key acquisition
By the end of 2001, SingTel had acquired Optus, Australia's number two carrier, from Cable & Wireless. The company was ready to use Optus as the foundation of an infrastructure that would span all of Southeast Asia.

Chris Anderson, Optus' CEO at the time, made the company's ambitions clear when he told internet.com, "When dealing with SingTel or Optus international and satellite services, our customers will be dealing with the region's most powerful operator."

Optus is 100 percent owned by SingTel and now provides 60 percent of the group's revenues, Chang says. Optus is huge. It has 9,000 employees and provides many services including: mobile, fixed line, and cable TV. A partnership led by Optus recently won a government contract worth over $1 billion to build rural service in Australia.

More acquisitions
Optus is the big acquisition, but SingTel has a presence in most of the nations of Southeast Asia. The top five nations of Southeast Asia, by population and in order of size, are China, India, Indonesia, Pakistan, and Bangladesh. They all rank among the ten largest nations in the world (see the CIA World Factbook ranking)

The company does not at this time have a presence in China.

It owns 30.5 percent of Bharti in India, a stake worth about $12.75 billion at press time. Chang says Bharti is adding about 1.5 million net subscribers each month.

In Indonesia, he says the company owns 35 percent of the top mobile phone company, Telkomsel (short for Telekomunikasi Selular), which was formerly a part of Indonesia's ILEC, PT Telkom.

In Pakistan, SingTel last month purchased 30 percent of mobile operator Warid, which has 6.9 million subscribers, Chang says.

In Bangladesh, the company owns 45 percent of CityCell, a key mobile operator.

In addition, the company owns a stake in AIS of Thailand, a stake in Globe in the Philippines, and may well be pursuing additional investments. "We are pursuing aggressive investments into regional Southeast Asia telecommunications companies," says Chang.

Chang tells us that SingTel is capable of helping established mobile carriers enter the fixed line business. "We help them to become full service providers," he says.

Regionally, Chang says, he sees SingTel as the third mobile carrier, behind only China Mobile. "Subscribers in all our mobile firms total 130 million," he claims. "And we're probably adding 3 to 3.5 million net mobile subscribers each month.".

But that's not all
In addition, SingTel owns or is part of a consortium that owns 11 trans-Pacific cables, six going eastward and five going westward. Through Optus, it owns significant infrastructure connecting Australia to the rest of the world.

It owns several satellites and a 20.33 percent interest in a satellite operating company called APT Satellite Holdings (known as APSTAR), which is based in Hong Kong.

It has POPs offering business services in 38 cities in 19 countries, with offerings such as end-to-end VPN, Ethernet, managed PBX, leased line, and so on. It offers managed security services through a partnership with IBM.

In Singapore, its ILEC operation offers higher level services including e-government applications through its wholly-owned subsidiary NCS, a former government entity that was sold to SingTel.

A strategy for the United States
Jung Hui Tan, managing director of SingTel USA, says his division of SingTel serves multinational companies with a presence in Southeast Asia, and helps U.S. telcos deliver in Southeast Asia. "We're not in the U.S. to compete domestically with the likes of Verizon," he says.

Instead, SingTel USA can offer US telcos a white label service in Southeast Asia.

"All of the customers we serve are globalizing," says Chang. "Even SOHO businesses are going global, or have a partner in India."

Tan says the company's undersea cables connecting the U.S. to India (through Singapore) are booming, and that the cables connecting the U.S. to the Philippines are growing exponentially, experiencing 400 percent growth in traffic over the last year.

"Our focus is on people," says Chang. "We customize the product for every single customer."

"Over the last seven years," adds Tan, "we have transformed ourselves from a local player to a regional powerhouse."

This last comment makes us laugh, because when we think of a "regional powerhouse" we think of a company serving, say, all of California, or the urban corridor from New York to Washington, D.C.

SingTel's a lot bigger than that.

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