Shares of Singapore telcos have taken a beating over the past few years. Due to the continued liberalisation of the industry and the heightened competition, profit margins have been squeezed and profits steadily eroded.
For Singtel (SGX: Z74), its net profit fell 43.5% year-on-year to $3.1 billion in FY2019 while many of its regional associates also recorded negative growth in pre-tax profit contributions. It seems that the telco industry has become extremely tough to operate in.
To mitigate this, Singtel has looked to diversify into ‘digital businesses’, namely cybersecurity and digital marketing which the chairman highlighted in his latest annual message to shareholders. I decided to attend this year’s AGM to gain new insights from the management about the telco industry and their plans for the company’s digital business.
Here are eight things I learned from the 2019 Singtel AGM:
1. 14% Year On Year Decrease From Group Enterprise