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Singapore Telecommunications Ltd. said finding takeovers in Asia has become
challenging as competitors vie for assets in emerging markets in the region,
home to the worlds two fastestgrowing wireless markets.
More overseas companies are targeting Asia for acquisitions, Chief Executive
Officer Chua Sock Koong said in an interview after Southeast Asias largest
phone company posted a 4.2 percent drop in fiscal thirdquarter profit to S$952
million ($673 million). For SingTel, ``the challenge is not lack of capital,
she said.
SingTel faces rising competition for regional assets from businesses including
Egypts Orascom Telecom Holding SAE and Vodafone Group Plc, the worlds biggest
wireless carrier. The combined value of Asias phone operators rose 19 percent
in the past year as India and China added record numbers of mobile users.
``The key challenge is not only for SingTel but also for other operators
therere lots of competitors out there, said Khoo Chen Hsung, an analyst at
CIMBGK Research in Singapore who rates SingTel ``outperform. ``Money is not
everything in some of these opportunities, sometimes its about track record and
experience that a strategic partner can bring.
The MSCI AC Asia Pacific Telecommunication Services Index has climbed 19 percent
in the past year, the secondbest performer on the regional MSCI index. SingTel
shares rose 1 percent to S$3.90 at the end of trading in Singapore.
Boost Holdings
SingTel will boost holdings in existing units or raise shareholder returns if it
cant find suitable candidates to invest in, Chua said.
``The associates are something we know very well, Chua said. Increasing our
stakes is something we are ``very keen to do.
India added 8.2 million users in December, while China gained 7.9 million,
according to figures from the countries regulators.
The phone company reported fiscal thirdquarter profit, excluding onetime
gains, jumped 22 percent to S$931 million. Sales gained 11 percent to S$3.83
billion. The median underlying profit estimate in a Bloomberg survey of six
analysts was S$939 million.
Net income dropped to 5.99 cents a share, from 6.26 cents a year earlier because
of a currency loss and the lack of a onetime gain. The median profit estimate
in the Bloomberg survey was S$958 million profit.
Regional Units
The company has the cash for acquisitions, Chua said at a press conference in
Singapore. ``We may see more realistic value for assets, she said. ``Our focus
is on Asia. Were looking and understanding the markets in Middle East and
Africa.
SingTel had S$1.03 billion in cash as of Dec. 31, compared with S$1.54 billion a
year earlier. The phone operator gained 13.6 million mobile users during the
last quarter, bringing its total to 171.5 million subscribers in eight markets.
Net income at regional units climbed 34 percent to S$492 million, the fastest in
five quarters.
PT Telekomunikasi Selular, 35 percent owned by SingTel, contributed S$223
million to the companys earnings, the largest portion from its units.
Indonesias biggest mobilephone operator, known as Telkomsel, last month said
its users rose 34 percent in 2007 for a total of 47.89 million.
The contribution from Bharti Airtel Ltd., Indias biggest mobilephone company,
climbed 50 percent to S$193 million after the operator added users in rural
areas.
Shares Rise
Earnings at Sydneybased SingTel Optus Pty rose 5.9 percent to A$143 million
($130 million), while sales increased 3.6 percent to A$2 billion.
In Singapore, SingTel gained a record 197,000 users, bringing its total to 2.33
million customers in a market where the number of subscriptions exceeds the 4.6
million population.
SingTel reiterated it expects fullyear sales in Singapore to rise by a ``single
digit percentage, margins to be maintained in Australia and pretax regional
earnings to climb by a ``double digit percentage.
The company faces competition for regional assets from Telekom Malaysia Bhd.,
Vodafone, based in Newbury, England, and Orascom, the largest mobilephone
company in the Middle East and North Africa, as the operators seek growth
outside saturated home markets.
Orascom has invested in mobile carriers in Bangladesh, North Korea and Iraq.
Vodafone expanded in Turkey and India to offset slowing growth in Europe.
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Source: http://www.bloomberg.com/apps/news?pid=20601091&sid=aEgiGkZX860I&refer=india
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