Singapore Telecommunications Limited · SGX:Z74
Singapore Telecommunications — Investor Day (July 2011)
37 slides from Singapore Telecommunications's investor day presentation, Jul 11, 2011
Slide 1: SingTel Investor Day: Optus Overview and Strategy
SingTel Investor Day: Optus Overview and Strategy Paul O’Sullivan Chief Executive, Optus 11 July 2011
Slide 2: Forward looking statements - important note
2 Forward looking statements - important note The following presentation may contain forward looking statements by the management of SingTel Group relating to financial trends for future periods, compared to the results for previous periods. Some of the statements contained in this presentation that
Slide 3: Video: Queensland Disaster Rescue
Video: Queensland Disaster Rescue 3
Slide 4: Today
4 Today 1 Optus overview 2 FY11 performance 3 Future opportunities and strategy
Slide 5: Today
5 Today 1 Optus overview 2 FY11 performance 3 Future opportunities and strategy
Slide 6: Optus: integral part of an extensive group
6 Optus: integral part of an extensive group Optus’ contribution to Optus’ contribution to proportionate revenue1,2 proportionate EBITDA1,3 Others Others 1% 1% 35% Optus 30% Optus 41% SingTel Regional SingTel Regional Group Group 45% Mobile Mobile 24% 23% Singapore Singapore 1. Proportionate informa
Slide 7: We're a large company and growing
7 We’re a large company and growing Customers REVENUE (A$Bn) EBITDA (A$Bn) • 9.1m mobile customers CAGR CAGR +8% +12% • 1m on-net telephony customers • 960k on-net fixed broadband customers • Key Business customers include ANZ, Tabcorp, DIAC and ATO • Key Wholesale Partners include M2, Amaysim & Dod
Slide 8: Optus: three major businesses
8 Optus: three major businesses Mobile OB/OWS (fixed) Consumer & SMB (fixed) A$6.0bn A$2.0bn A$1.3bn • 9.1m Optus subscribers • Full service provider to business and • HFC network covers 1.4m homes – 4.8m Postpaid government, and wholesale services to • Optus ULL service covers up to 2.9m service pr
Slide 9: Our network: over A$16BN invested since 1992
9 Our network: over A$16BN invested since 1992 Fibre/Coaxial Cable Satellite • Inter-city (from Perth to Cairns – OVER 10,000KMs) • 5 currently in orbit delivering Pay TV to over 2M households • Intra-city – OVER 12,000KMs • Currently constructing Optus 10, to launch in 2013 • Hybrid Fibre Coaxial –
Slide 10: Growing cash flows and strong financial position
10 Growing cash flows and strong financial position CAGR S&P Rating 13% 1,206 967 1,015 AAA 903 742 AA A+ A 2007 2008 2009 2010 2011 Note: All numbers are in A$m and are for FY ended 31 March A- BBB+ • Net Debt A$1.4bn1 • Committed medium term bank • Access to international facilities BBB debt capit
Slide 11: Optus' brand positioning: Anything is possible
11 Optus’ brand positioning: Anything is possible RATIONAL EMOTIONAL
Slide 12: Today
12 Today 1 Optus overview 2 FY11 performance 3 Future opportunities and strategy
Slide 13: Optus: recapping what we said last year
13 Optus: recapping what we said last year FY08-FY09 FY2010 FY2011 Begin Transformation Acceleration We said we would… • Business stabilisation • Increase mobile growth momentum • Focus on maintaining mobile • Re-start mobile growth to drive revenue share gains momentum • Targeted investments: • Del
Slide 14: FY11: mobile was a year of two halves, with increased competition in 2H
OCTOBER 2009 14 FY11: mobile was a year of two halves, with increasedConsumer competition in 2H Mobile service revenue share (%) 8.12 7.81 7.67 -0.6% -0.1% +0.6% 0.0% +0.1% +0.1% 42.4% 41.8% 41.7% 30.1% 30.7% 30.7% 27.4% 27.5% 7.44 27.6% 2H CY09 1H CY10 2H CY10 2H CY09 1H CY10 2H CY10 2H CY09 1H CY1
Slide 15: Optus CE is stable while customer expectations are increasing
15 Optus CE is stable while customer expectations are increasing ~5% improvement in satisfaction Optus ‘Yes’ Meter results stable with how we are servicing our customers‟ enquiries in SMB & We operate in an environment Consumer ~5% improvement in satisfaction with of heightened awareness: how we are
Slide 16: Optus plays a key role as the NBN becomes a reality
16 Optus plays a key role as the NBN becomes a reality Structural Equivalence separation of access Cost-based Strong ACCC pricing oversight
Slide 17: Overall Optus exceeded market guidance in FY11
17 Overall Optus exceeded market guidance in FY11 FY11 GUIDANCE FY11 OUTCOMES Revenue to grow at mid single-digit level Revenue A$9,284m Up 4% EBITDA to grow at mid single-digit level EBITDA A$2,334m Up 8% Capital expenditure to be approx. A$1.2 billion A$1,018m Capex: Revenue 11% Free cash flow to
Slide 18: Video: Optus achievements
Video: Optus achievements 18
Slide 19: Today
19 Today 1 Optus overview 2 FY11 performance 3 Future opportunities and strategy
Slide 20: A number of key trends continue to shape the Australian Telco landscape
20 A number of key trends continue to shape the Australian Telco landscape Technology Technology step change driving bandwidth and faster speeds Economy A two tier economy Customer Focus is emerging Moving from Ear to Eye Regulation Competitors Continuing shift towards NBN world Traditional more agg
Slide 21: Technology continues to evolve rapidly
21 Technology continues to evolve rapidly Mobile network bandwidth Fixed network bandwidth 1,000,000 1 Gbit/s Industry as at today 100,000 100 Mbit/s Mobile network 100 / 40Mbps Actual Customer development Experience# 10,000 10 Mbit/s 100Mbps possible Downstream Bit Rate 50 / 20Mbps before 2020 for
Slide 22: Mobile customers are connecting over a wide range of 'smart' devices
22 Mobile customers are connecting over a wide range of ‘smart’ devices... Tablets are providing greater HD video Smartphones a key acquisition driver Mobile broadband net adds (‘000) capability Australia Smartphone Shipments % Total Handset Shipments Australia Tablet Shipments (M) 1.3 1.0 90% 1,356
Slide 23: ...and are shifting their use of the mobile device from 'ear to eye'
23 ...and are shifting their use of the mobile device from ‘ear to eye’ Functions used on mobile phones – 2010 vs 2009 2009 86% 78% 2010 71% 70% 52% * 50% 49% 39% 36% 29% 28% 20% 15% 14% 7% SMS Photos Internet Games MMS Email GPS Nav. 41% Source: Nielsen, The Australian Online Consumer Report, Febru
Slide 24: Aggressive competition from incumbent operator
24 Aggressive competition from incumbent operator Telstra EBITDA margin – six months Mobile net adds („000) Six months Quarter 44.3% 919 43.1% 37.3% Telstra Optus Dec-09 June-10 Dec-10 445 364 276 175 103 Telstra FY11 “Strategic Opex Investments” announced Sep 2010 Jun-10 Dec-10 Mar-11 DVC/COGS New
Slide 25: VHA leading on price but limited pull-through on customer growth
25 VHA leading on price but limited pull-through on customer growth Mobile net adds (‘000) Aggressive “Infinite” plans Six months Quarter 539 Postpaid Prepaid 395 142 Mobile 144 188 -46 -150 * Jun-10 Dec-10 Mar-11 • $35-$100 price points (prepaid / postpaid) Mobile Service Revenue and YoY growth - s
Slide 26: Competitive low-end postpaid offers fuel growth in postpaid, but prepaid growth moderates
26 Competitive low-end postpaid offers fuel growth in postpaid, but prepaid growth moderates Market Subscriber Growth - Postpaid (‘000) Market Subscriber Growth – Prepaid (‘000) +6% +5% +7% +7% +6% +3% 0% +2% 14,697 15,658 16,744 11,244 13,164 13,806 10,127 10,698 10,973 11,002 Dec-08 Jun-09 Dec-09
Slide 27: Strong take-up for digital services as smartphone penetration increases
27 Strong take-up for digital services as smartphone penetration increases Growth in Optus Browsing Revenue (excl WBB) +62% FY10 FY11
Slide 28: Progress on regulatory issues, with some yet to be determined
28 Progress on regulatory issues, with some yet to be determined MOBILE FIXED Negotiations with Government on Parliament passes key legislation for structural renewal of existing spectrum licences separation of Telstra and NBN Co governance Late 2012 confirmed for wireless ACCC‟s draft final determi
Slide 29: Australia - two speed economy is emerging and consumer sentiment is soft
29 Australia - two speed economy is emerging and consumer sentiment is soft Australian GDP (Forecast) Consumer sentiment 4.25% 3.75% 3.75% 2.70% 2010 2011f 2012f 2013f Interest Rates “Growth in household consumption and borrowing, 4.25% 4.50% 4.75% 4.75% however, remains relatively subdued, as house
Slide 30: The Australian telco market continues to be driven by mobile growth
30 The Australian telco market continues to be driven by mobile growth, although there are some headwinds Australian Telco Market (A$m) • Economy – Consumer confidence Mobile +8.5% • Competition – Aggressive pricing from other telcos – Prepaid market softness Fixed 16,724 -4% 16,020 – New entrants t
Slide 31: Value shift from fixed to mobile expected to continue
31 Value shift from fixed to mobile expected to continue Pre NBN market EBITDA (FY10) Future Others VHA Mobile continues to be a key source of growth: Optus Strong device take-up Strong ongoing demand expected for data services Telstra However, fixed market still very important: Increased mark
Slide 32: Focus on building mobile market share while exploiting the NBN
32 Focus on building mobile market share while exploiting the NBN FY11-FY12 FY2012+ Drive to leadership Exploit NBN and IP in Customer Experience to cement leadership and leverage digital via wireless-led capabilities to drive convergence lower cost structure
Slide 33: In FY12 we will focus on:
33 In FY12 we will focus on: MOBILE FIXED • Break-out in Customer • Build scale in lead-up to NBN Experience • Relevant and personalised • Device leadership digital services • Relevant and personalised • Leverage ICT and Cloud digital services capability for corporates • Leverage distribution • Prep
Slide 34: We will continue to invest in growth with a lower cost structure
34 We will continue to invest in growth with a lower cost structure CROSS LOWER FUNCTIONAL COST-OUT BUSINESS SYNERGIES RE-TOOLING COST STRUCTURE FY12 FY16
Slide 35: Guidance in FY12
35 Guidance in FY12 FY12 GUIDANCE Revenue to grow at low single digit level EBITDA to grow at low single-digit level Capital expenditure to be at around A$1.2 billion Free cash flow to be above A$1.0 billion
Slide 36: Brand Video – Smart Safe TVC
Brand Video – Smart Safe TVC 36
Slide 37: SingTel Investor Day: Optus Overview and Strategy
SingTel Investor Day: Optus Overview and Strategy Paul O’Sullivan Chief Executive, Optus 11 July 2011
Singapore Telecommunications — Investor Day (July 2011) on 6ix