Singapore Telecommunications (Z74) Status update summary

Strategic reset and business transformation

• Undertook a major strategic reset starting in 2021, simplifying business structure and merging overlapping units to reduce costs and improve clarity.

• Exited or sold loss-making digital businesses, focusing on profitable core and growth segments.

• Separated out data center and IT services (NCS) as distinct growth engines, recognizing their higher growth potential compared to traditional telco.

• Monetized undervalued assets through capital recycling, raising about SGD 8 billion to reinvest in growth, pay down debt, and return capital to shareholders.

• Restored investor confidence by demonstrating operational improvements and consistent capital returns.

Dividend policy and capital management

• Introduced a Value Realization Dividend (VRD) of SGD 0.03–0.06 per year, funded by ongoing asset monetization, in addition to core dividends based on 70–90% of underlying profits.

• Plans to recycle about SGD 6 billion in assets over the next three years, with proceeds allocated to growth investments, debt reduction, and VRD.

• Strategic partnerships, such as with KKR for data centers and Lendlease for property, help fund growth and diversify risk.

• Maintains a disciplined approach to capital allocation, focusing on sustainable returns and avoiding over-reliance on debt.

Growth initiatives and future outlook

• Four key growth areas: 5G differentiation, fixed broadband expansion in emerging markets, data centers, and IT services (NCS).

• Data center business is expanding rapidly, supported by strong enterprise and government relationships and capital from KKR.

• Digital banking partnership with Grab (GXS) targets break-even by 2026, with strong early traction in Indonesia and Malaysia.

• Overseas associates in India, Indonesia, Thailand, and the Philippines are market leaders, with industry consolidation improving profitability.