Piggybacking on its investment in Bharti Airtel Ltd, Southeast Asia’s biggest telephone company, Singapore Telecommunications Ltd, is set to report its highest profit in three quarters.
SingTel is slated to report its results on Thursday and a median estimate of seven analysts surveyed by Bloomberg suggests it will report that net income climbed around19% to $685 million in the third quarter ended 31 December 2006.
The results are a vindication of the bet that chief executive, Lee Hsien Yang, placed when he invested in India and Indonesia after competition intensified in Singapore and Australia. Profit at Bharti Airtel, 30.5% owned by SingTel, doubled in the quarter as it added 4.9 million users.
With just one in seven people having a mobile phone, “there’s more than enough room in India to grow and expand”, said Bruno Lippens, who helps manage $5 billion in telecommunications stocks.
Last month, Bharti reported third-quarter profit rose to Rs1,215 crore, or $276 million, from Rs545 crore a year earlier.
SingTel has said it is interested in raising its Bharti stake. The Singapore operator is potentially eyeing Vodafone Group Plc.’s about 10% stake in Bharti. Vodafone is looking to try and acquire Hutchison Essar Ltd, India’s fourth-biggest cellphone company.
Separately, SingTel said it added a record 11.5 million mobile users in the third quarter. It had 112.3 million users in the three months ended 31 December, compared with 77.8 million a year earlier, the company said.
The growth was again led by SingTel’s regional mobile associates, including Bharti and Indonesia’s PT Telekomunikasi Selular. The units added 11.4 million users, exceeding Singapore’s 4.5 million population, during the quarter, for a total of 103.8 million subscribers.
Singapore had 4.63 million mobile users at the end of December.