The government’s Services Australia has the largest contact centre operation handling over 1 billion online transactions and 55 million calls annually.
This comes on the back of Optus also raising its mobile plan prices.
See more: Analysts keep ‘buy’ on Singtel as Optus raises prices for Sim only plans
“We think Optus will leverage its existing physical and cloud/software infrastructure to provide the service and, as such, will require limited new capex/opex,” says Saifee.
See also: UOBKH raises TP on SIA to $6.22, FY2026 earnings to see lift on fuel cost savings
Assuming a modest ramp up in revenues over the contract life and a 40% EBITDA margin, the analyst estimates the new contract would help to lift Optus’ profit after tax by 15%-39% for FY2025-FY2027 (material lift mainly due to its low earnings base).
At the Singtel level, he sees the new contract helping earnings, FCF and SoTP rise by 0.7%-1.4% over FY2025-FY2027.
Saifee also likes that the stock’s holding company discount remains more than 40%.
As at 4.45pm, shares in Singtel are trading at $2.56.
