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 shut down loss-making digital ventures, focusing on profitable core and growth businesses.

• Separated out high-growth engines like data centers and IT services (NCS) from the traditional telco business.

• Monetized undervalued assets through capital recycling, raising about SGD 8 billion for reinvestment and shareholder returns.

• Restored investor confidence by demonstrating operational improvements and consistent execution of strategic plans.

Dividend policy and capital management

• Adopted a dividend policy of paying out 70%-90% of underlying profits, with guidance for core EBIT growth at high single to low double digits.

• Introduced a value realization dividend (VRD) of SGD 0.03–0.06 per share annually, funded by asset monetization, for the medium term (up to five years).

• Capital from asset recycling is allocated to growth investments, debt reduction, and VRD, with examples like the KKR partnership for data centers.

• Reduced interest expenses by paying down debt during a rising rate environment.

• Emphasized the importance of sustainable capital management, using both operational cash flow and capital partnerships.

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 KKR investment, to meet rising demand from AI and digitalization.

• IT services arm NCS is positioned to benefit from regional digital transformation trends.

• Digital banking joint venture (GXS with Grab) targets profitability by 2026, with strong customer growth in Indonesia and Malaysia.

• Overseas associates are encouraged to undertake their own strategic resets, with Singtel providing board and management support.