The three units being merged are the two companies' International Carrier Services, International Network and International Satellite, which will be responsible for the SingTel group's global operations.
"SingTel and Optus will be stronger together rather than as two separate organizations. Creating the new IBUs is part of our effort to drive the combined strengths of the companies and reap the synergies of merger," said SingTel chief operating officer Lim Toon.
In September this year, SingTel acquired Optus for US$9 billion.
"Bringing the international carrier and networks businesses of SingTel and Optus together consolidates the Group's buying power, magnitude and scope," Lim added. "We estimate that cash savings of S$300 million (US$163.4 million) can be achieved over the next 18 months through integrating the businesses of SingTel and Optus."
According to SingTel, about 80 percent of the integration savings will come from a reduction in capital expenditure, mainly through optimising the group's international cable networks and better prices from equipment vendors. Most of the savings will be realised in the next financial year.
Synergies are also expected from reduced operating expenses, such as lower international traffic costs, and gains in revenue from increased sales to corporate customers in Australia, the company added.
Lim said that SingTel would "further work to extract operational synergies" in addition to the three IBUs announced today. He did not elaborate.
Responsibilities of new units
The new International Carrier Services and International Network IBUs will manage the assets of SingTel and Optus in a streamlined, global and regional operation made up of cable, switch and other wholesale data businesses.
Meanwhile, International Carrier Services IBU will manage all international voice and data traffic centrally, leveraging on the SingTel group's carrier relations, negotiating rates for terminating traffic, and providing wholesale voice/data and other value-added services through the Group's global voice multi-service network.
The companies' International Network IBU will plan the group's requirements for international network and utilisation, manage the costs of submarine cable, satellite and backhaul facilities, and coordinate the private submarine cable businesses.
The International Satellite Business IBU will operate and manage five satellites covering Asia, Australia and New Zealand, 13 satellite earth stations, three tracking, telemetry and control facilities, as well as the agreements that allow access to 25 satellites in the region.
At the helm
Heading the International Carrier Services IBU is Richard Tan, who is the vice president of SingTel International Carrier Services while Taiwan-based New Century Infocomm Company chief operating officer Ng Seng Sun will lead the International Network IBU. According to a statement, New Century is a SingTel associate.
The two executives will report to Singtel executive vice president Lim Shyong.
Optus Satellite general manager Bob Murray will lead the Satellite Business IBU and report to Chris Hancock, managing director of Optus Business Division, in Australia.
