Singapore Telecommunications is expected to post flat to lower earnings for the April-June quarter, after being hit by plummeting international traffic revenues and slowing mobile subscriber growth.
Asia's eighth largest telecoms firm, currently in the midst of acquiring Australia's second dominant carrier Cable & Wireless Optus, reported a net profit of S$559.7 million for the quarter ended June 30, 2000.
Competition in the domestic market has been increasing in intensity since the telecoms sector was liberalised, analysts said. Rivals include the second largest cellular operator MobileOne Asia and StarHub, the city-state's number two carrier.
The sharp slowdown of the Singapore economy over the last few months will also dent SingTel's performance in April-June quarter, said Piyush Mubayi, an analyst with Deutsche Bank AG.
"This has been evident from the industry statistics and should translate into a slowdown in SingTel's line additions and cellular subscriber growth," he said in a client note.
SingTel plans to extend its takeover offer period for Optus by a month to September 3, its second such extension so far, pending approval from Australia's Foreign Investment Review Board.
Cash-rich SingTel has embarked on an aggressive overseas acquisition spree over the past year in a bid to become a pan-Asian force as earnings are pressured by intensifying competition within the small domestic market.
