Singapore Telecommunications on Monday (Apr 29) forecast non-cash impairment provisions of S$3.1 billion (US$2.28 billion) for second-half of 2024 that would lead to the telecom giant reporting a net loss for the period.
The company also warned that it would report a lower net profit for the full-year ended Mar 31, 2024.
About S$2 billion of the total impairment provision originates from its mobile network operation unit, Optus’ goodwill, Singtel, Southeast Asia’s largest telecom operator, said in its filing.
An “impending deal” for Optus was recently ruled out by Singtel following reports that talks for a potential stake divestment had fallen off.
Singtel added that Optus expects a non-cash impairment provisions of S$470 million on its enterprise fixed access network assets, mainly due to weaker prospects, increased cost of capital and a bleak macroeconomic outlook.
After conducting a strategic review of its enterprise business, Optus found that it was reporting steep declines in fixed carriage revenue, in-line with an overall market decline in Australia, the Singtel filing stated.
Among other units, the Asia Pacific cyber security business is expected to report non-cash impairment provision for goodwill of S$340 million, with S$280 million of the same expected from IT service provider NCS Australia.
“Singtel is on track to pay at the upper end of its dividend policy for the financial year ended 31 March 2024,” the Singapore-based telecom firm said.
The company is scheduled to report results for the financial year ended Mar 31 on May 23.
In a separate announcement on Monday, Singtel said its unit Optus struck a deal with local rival TPG Telecom to provide access to its local radio network in regional Australia.
Singtel-owned Optus and TPG Telecom to share network
Meanwhile, Singapore Telecommunications’ Australian unit Optus and Australia’s No. 1 telecom firm TPG Telecom have agreed to boost their mobile networks and improve their coverage, the companies said on Monday.
As a part of the regional Multi-Operator Core Network agreement, TPG will increase its mobile network in regional Australia to 2,444 network sites, with Optus providing TPG Telecom access to its regional radio access network and sharing spectrum in regional Australia.
“The agreement will reduce combined 5G network rollout costs in regional Australia, which will enable the rollout of 5G infrastructure to be completed two years earlier than previously planned,” said Optus interim CEO Michael Venter.
The agreement is expected to be operational by early 2025 and has an initial term of 11 years with an option for TPG to extend it for five more years. – Reuters
