Group CEO Review

What is the outlook for Singtel for the coming year given the challenging macroeconomic and geopolitical conditions?

Global trade tensions have clouded the economic outlook for the year ahead. While the direct impact of tariffs on the telco industry is expected to be relatively limited, the broader repercussions cannot be ignored. These trade conflicts have already prompted the IMF to lower its global growth forecast for 2025 to 2.8%, down from an earlier projection of 3.3%.

Singtel has a strong balance sheet, with S$2.8 billion cash as of March 2025 and almost 90% of our debt hedged to fixed rates. This positions us well to navigate these challenges. However, we remain vigilant about the indirect effects of the trade conflict, which could impact consumer and business sentiment and the pace of capital recycling.

What is also concerning is that recent tensions could further accelerate the US-China financial decoupling and tech bifurcation that has been underway for some years now. This could see further divergence of technical standards and digital infrastructures that could impede the knowledge sharing that has driven global technological progress to date. As Singtel operates in the Asia Pacific region, we will have to be familiar with both the Western and Eastern tech stacks.

Looking longer term, countries in Southeast Asia still have very strong fundamentals and a growing middle class, factors that should help the region stay resilient. Southeast Asia could also benefit from the global trade and geopolitical tensions as multinational corporations increasingly see it as a viable place to diversify their supply chains.

Singtel derives most of its profits from overseas. Do you expect overseas contributions to grow?

More than 70% of our annual underlying net profit comes from our overseas operations through contributions from our regional associates Airtel, AIS, Globe and Telkomsel as well as our wholly-owned Australian subsidiary Optus. Many people probably don’t realise the extent of our geographic diversification — we have been long-term strategic investors in these markets for more than 20 years. Collectively, we have a mobile customer base exceeding 800 million and our reach spans 20 countries in Asia, Australia and Africa.

This regionalisation strategy has enabled us to ride different phases of growth in both developed and emerging markets while also hedging against a slowdown in any part of the Group. Unlike Singapore, our regional associates have evolved from consumer-focused mobile businesses in recent years, branching out into the fixed broadband and enterprise space to capture the rapid growth in demand in these areas. They are some of the strongest operators in their markets with tremendous growth potential, and we expect their contributions to strengthen in the years ahead.

Beyond traditional connectivity, we are diversifying our revenue mix further through our newer digital services and digital infrastructure businesses. As NCS internationalises and Nxera’s regional data centre platform continues to scale, they are poised to drive a greater share of the Group’s earnings from markets outside Singapore. These growth engines underscore our ambition to build a resilient, future-focused business that capitalises on the large-scale digitalisation across Asia.

Singtel has identified Nxera and NCS as new growth engines. Tell us more about your plans.

Cloud, digitalisation and AI are transformative trends reshaping industries, businesses and the way we live and work. Recognising these growth opportunities, we carved out NCS and Nxera as key growth engines in digital services and digital infrastructure. We set a target to increase NCS and Nxera’s EBITDA contributions to the Group from 12% in FY2023 to 20% by FY2028. Achieving this goal will require both businesses to seize opportunities at speed and scale.

Enterprises today face challenges in effectively adopting and responsibly leveraging AI to drive efficiency, growth and resilience. This is where NCS can play a pivotal role, guiding businesses toward strategic AI implementation. Additionally, the rapid adoption of AI and cloud services is driving the demand for more digital infrastructure. We have extensive experience and expertise in data centres and subsea cable systems to address these needs. With the backing of Singtel and our strategic partner, global investment firm KKR, Nxera is developing a portfolio of hyper-connected, AI-ready data centres in Singapore and the region. These state-of-the-art facilities are set to more than double Nxera’s capacity to over 200MW by 2026 and contribute meaningfully to the Group's growth when they become operational in the next two years.

The emergence of disruptive innovations such as DeepSeek can help make AI more affordable to enterprises and accelerate AI adoption. This, in turn, can spur greater demand for AI solutions, encouraging further investments into more advanced solutions, and by extension, our data centres and AI cloud solutions.

Singtel is striving to become an AI-driven company. Where do you see the biggest opportunities for the Group?

AI is going to be a game changer, and the Group is in a unique position to drive scale in AI through our connectivity, digital infrastructure and digital services businesses. We have defined our AI strategy around three pillars — user, provider and enabler — that reflect our diverse roles across the value chain as well as our ambition to capture value from this technology that holds immense potential.

While the use of AI is not new to us as we have been working with AI for over a decade to enhance business performance and customer experience, technological advancements in the form of generative AI and agentic AI now allow us to process vast amounts of data and realise even greater value.

As an enabler, we develop infrastructure through Nxera to support AI adoption, while as a provider, we develop and provide AI solutions to consumers and enterprises through NCS, Singtel Singapore, Optus and our regional associates. Internally, we are using AI to enhance network performance, provide more personalised experiences for customers and drive greater productivity and better decision-making.

Despite its tremendous potential, AI carries inherent risks that must be managed effectively while ensuring its benefits are maximised. We are investing in employee training to foster a culture of responsible AI and data use and to equip them with the skills and proficiency in AI tools. Additionally, we have introduced a responsible AI framework and policy to provide essential safeguards so that we not only drive business value but also harness AI safely and sustainably.

Yuen Kuan Moon

Group Chief Executive Officer