“Strategic Reset” for the post-COVID era

My recent blog discussed the performance rebounding of Thailand mobile operators. In fact, not only Thailand but also other Southeast Asian countries are experiencing an economic recovery from the pandemic. In its Asian Development Outlook 2022 Update in September, Asian Development Bank (ADB) predicted South East Asian countries would achieve a 5.1% GDP growth in 2022, which increased from 4.9% in the outlook in April even though challenges mount in various aspects. Therefore, telecom operators must prepare for the post-COVID era. Actually, leading operators have taken action. For example, Singtel – a leading operator group in the region – launched its “Strategic Reset” about one year ago.

Back in May 2021, Singtel announced its new strategic directions. As pointed out by Singtel Group’s CEO, Mr. Yuen Kuan Moon, “with the mass migration online over the last 18 months, the pandemic has also accelerated trends that were already redefining the basis for success for our industry.” Singtel intends “to use this unique opportunity to make profound changes, restructure and reposition to emerge stronger.” Singtel’s “strategic reset centres around three key tenets:”

• Leveraging 5G leadership to reinvigorate core consumer and enterprise businesses
• Developing new growth engines in ICT and digital services
• Unlocking the value of quality infrastructure assets

Meanwhile, Singtel is also committed to pushing ahead in sustainability priorities and building an inclusive digital future.

“Signs of rebound”

Since the “strategic reset,” Singtel has achieved over 95% standalone 5G nationwide coverage in Singapore and gained 480K 5G subscribers by Q4 FY22 (Q1 2022). In the residential market, Singtel has already started offering 2 Gbps fiber broadband plans with a bespoke service to help troubleshoot any dead Wi-Fi zones at home. Based on these Gbps network services, Singtel is expanding its content portfolio to provide a differentiated service experience, especially for the ethnic viewer base. The subscribers of CAST – Singtel’s video streaming platform – achieved a 30% YoY growth. Singtel also launched complementary home lifestyle products to meet the growing demand for home-based work and play.

In the business market, Singtel launched Paragon – an all-in-one orchestration platform that consolidates all the necessary resources required across 5G and edge computing into one touchpoint, and developed partnerships with AETOS, Micron, Hyundai, etc. to deploy industrial 5G solutions to improve operational efficiencies, drive innovation and enhance problem-solving and decision-making capabilities. Singtel also leverages its digital service subsidiary – NCS – to expand the ICT service business in regional markets, such as Australia, Thailand, Vietnam, etc. According to the last financial report, NCS has become a “growth engine” of Singtel Group.  

Singtel’s subsidiaries and associates have also made progress in 5G developments. Optus’ 5G network has covered 98.5% Australian population. More than 2.3 million devices have been connected to Optus’ 5G network. In Thailand, AIS is the leading operator in the 5G market. Its 5G subscribers had already reached 3.9 million by Q2 2022. AIS already signed an agreement with South Korean LG U+ to import VR/AR 5G content and bundled these iconic 5G content and other popular OTT content platforms – such as Disney, YouTube, Google Play Family, etc. – with its 5G service plans. In the Philippines and Indonesia, Globe and Telkomsel also started deploying 5G networks and developing digital content and products to complement core services.

Singtel launched the “digital infrastructure strategy” in October 2021 to divest tower assets and build a regional data center platform. Under this strategy, Singtel has divested a 70% stake in Australia Tower Network and set an aggressive building plan for regional data centers (see the chart below). By leveraging its secure and reliable network connectivity, Singtel can be a trusted regional one-stop shop for enterprise customers to provide a single port of call for firms, standardized SLAs, interconnected DC capacity across the region, and build a wide ecosystem across connectivity, IT/managed services & cyber security. The long-term objective is to develop a regional digital infrastructure platform across multiple asset classes. All these will empower intelligent networking and computing capabilities.   

All these strategic initiatives have led to a performance rebound. In Q1 FY23, 4% operating revenue growth was achieved on a comparable basis. As pointed out by Singtel Group CEO, Mr. Yuen Kuan Moon, “this set of positive results reflects the progress made on our strategic reset,” even though the operating environment remains challenging.

Preparing for the new stage

As discussed in my recent blog, the telecom industry is entering a new stage with the changing environment in the post-COVID era. Telecom operators must prepare for the new stage from the perspectives of technology development, business models, and ecosystem building. Singtel’s “strategic reset” demonstrates how an operator should make the preparation.

With the 5G leadership, a new growth engine of digital services, and the regional digital infrastructure platform, Singtel is approaching its goal of being a “leading communications & digital services provider.” Its strategic directions actually reflect common perspectives of the global telecom industry. In early 2022, Strategy Analytics performed joint research with Huawei and published the GUIDE to the Future whitepaper to discuss telecom operators’ transformation towards 2030. Five strategic trends were identified in the whitepaper, such as the Gigaverse network, intelligent computing, differentiated experience, etc., which are pretty aligned with Singtel’s strategic directions. We expect these strategic directions to become a consensus in the global telecom industry, and Singtel will be a reference model for the strategic transformation of telecom operators in a diverse and dynamic market.