Telco giants post bleak performance in Q3

All three major telcos reported weaker earnings this quarter.

Singapore’s three telecommunications service providers (telcos) – M1, Singtel, Starhub - posted lacklustre results this quarter as they recorded weaker earnings in Q3, according to OCBC Research.

Eugene Chua of OCBC Research said that the decline in M1 earnings was driven by weaker handset sales as well as lower revenue from international call services.

Meanwhile, Singtel’s poor performance is largely due to weak performance from its Indian associate, Airtel, which was badly hit by stiff competition.

Chua adds that while Singtel’s earnings before interest, taxes, depreciation and amortization (EBITDA) received a boost from consumer and digital life segments, it was partially offset by changes in business mix towards lower margins ICT-related businesses.

StarHub, on the other hand, weaker profits in Q3 was due to lower revenue contributions from its mobile, pay TV and broadband businesses.

OCBC Research forecasts a generally bleak outlook for the telco sector over the next five years on the back of intense competition from players trying to take a slice of Singapore’s telco pie.