SingTel buoyed by management reorganisation

Southeast Asia’s largest telco has announced a major reorganisation of its leadership, including the creation of some new roles.

Source: Bloomberg

In a statement released before the market open, SingTel Group CEO Chua Sock Koong said the move was aimed at ‘strengthening our market leadership and increasing our relevance to customers.’

Investors appear to be welcoming the news, with SingTel’s stock price trading as much as 1% higher in the morning session – the biggest jump in over a week to touch its one-month high.

Under the restructure, the new appointments and CEOs of the consumer businesses will report directly to the Group CEO. The changes will take effect on October 1, 2014.

Some of the key changes are:

Paul O’Sullivan – Currently Group Consumer CEO and Country Chief Officer of Australia, appointed as chairman of Optus.
Allen Lew – Currently CEO, Group Digital Life, appointed as CEO Consumer Australia and CEO of Optus, to be based in Australia.
Jonathan Auerbach – A new addition to the SingTel leadership team, appointed CEO, Group Digital L!fe.
Bill Chang – Appointed Country Chief Officer for Singapore where he will be the principal liaison with local and regulatory bodies. Retains current position as CEO, Group Enterprise.
Jeann Low – To assume responsibilities for Group Strategy and Group General Counsel in addition to current position as Group CFO.
Yuen Kuan Moon – CEO Consumer Singapore.
Mark Chong – CEO Consumer International.

Notably, Optus will get a new CEO in Allen Lew after the departure of former chief, Kevin Russell, six months ago. This marks a return to the Australian unit for Lew, where he started in 1980 and led the consumer and mobile business along the way.

His appointment comes at a time when SingTel is looking to revive the fortunes of Optus, which has been struggling to keep its market share against rival Telstra. Last year, Optus’ subscriber base fell 1.3% to 9.4 million. Vodafone currently has around 5 million, with Telstra at over 15 million mobile subscribers.

SingTel’s move comes just two years after it restructured its business units. In 2012, the telco split its regional business into consumer and enterprise segments – away from geographically-defined units. The restructure saw the business carved into three main units: group consumer, group digital life and group ICT.

How’s the stock doing?

Year-to-date, the stock price is up 7.1% and has been largely rangebound since the release of its Q1 earnings.

SingTel did not enjoy a particularly good set of results for the quarter ended June, with earnings dragged down by lower revenue from Australia. Group net profit fell -17% to $835 million, in line with a 3.4% dip in revenue to $4.148 billion.

On the domestic front, mobile postpaid ARPU for that quarter was also under pressure, along with the rest of the industry. It fell $3, to $76, which SingTel blamed partly on the lower interconnect SMS charges, roaming usage, and mobile share plans.

Traders can look out for the stock price to break above its 20 DMA, which will signal some bullish short-term momentum. More conservative traders can wait for the stock price to clear above the 50 DMA.

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