The value realisation share buyback programme is Singtel’s latest capital management initiative, following a change in dividend policy in May 2024 to include a value realisation dividend in addition to a core dividend. For the whole of FY2025, Singtel will be paying 17 cents per share, versus 15 cents paid last year.
Similar to the share buyback, funding for the value realisation share buyback programme will come from excess capital from the recycling of its sprawling portfolio of assets. In FY2025 ended March, Singtel’s active capital management generated $1.9 billion in recycling proceeds.
Most recently, on May 16, Singtel sold a 1.2% stake in Airtel for $2 billion, which means it has achieved more than half of its $6 billion mid-term asset recycling target under its Singtel28 growth plan announced last year. It is now raising this target to $9 billion. Evidently, the market is consistent with its likes for listed companies willing to make a big show of how they are better managing their capital. Singtel shares gained 27.83% year to date to close at $3.95 on May 22, extending a gain of 63.9% over the past year after this capital management strategy was laid down. It was the most actively traded counter on May 22.
Continued optimism in its associates
While Singtel is still looking to equalise its effective stake in Airtel with the telco’s other key shareholder, it is in “no hurry” to do so, says Lang. “We want to make sure that we [divest] responsibly. Airtel is [currently] doing exceptionally well. We will only [sell our stakes] if we have a better alternative return on the capital that we allocate or we have a clear need for [more] capital.”
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Year to date, Airtel’s share price has gained around 15%, thanks to an overall improvement in the mobile industry of India after a bout of brutal price war eased. The continuous earnings growth has supported the share price to gain more than 200% in the past five years, giving Singtel’s 28.3% stake in Bharti a market value of more than $48 billion, versus Singtel’s own market cap of $65 billion.
Despite the regular trimming of its stake, Airtel remains a strategic holding for the long term, says group CEO Yuen Kuan Moon. “We believe in the market and the company. Firstly, India’s large population and rapid pace of digitalisation will drive the growth of telecommunication services. Then, from an operating company standpoint, we believe in Airtel – it has almost doubled its dividends paid out over the last two years, so we expect it to generate a lot of cash and pay dividends to Singtel.”
Returns enjoyed by shareholders from capital management are in tandem with improvements in its operations. In FY2025, Singtel reported a 7% rise in pre-tax contributions from its regional associates, led by robust performances from Airtel and Thailand’s AIS. In constant currency terms, their contribution would have increased 10%.
Airtel posted double-digit growth in operating revenue and ebitda in both India and Africa on a constant currency basis, while AIS delivered solid revenue gains and improved margins through continued cost optimisation.
However, Indonesia’s Telkomsel saw a decline in net profit, weighed down by weaker mobile revenues, although growth in its IndiHome fixed broadband unit provided a partial offset. In the Philippines, Globe Telecom’s earnings fell amid weak consumer spending driven by high inflation, typhoons and extreme heat.
Beyond Airtel, Singtel has no intention of selling its stakes in its other associates because it sees “organic growth” potential in each of them.
“Unlike Singtel, which has always been a full-fledged, integrated telco, our associates primarily started as mobile-only players. They are now branching into enterprise and fixed broadband business, [which could drive] a second wave of growth for them because fibre penetration in those markets is low and companies there will [increasingly demand] cloud and connectivity as they digitalise,” says Yuen.
Optus and NCS primary growth drivers
Singtel’s FY2025 numbers were also supported by its fully-owned units — Optus in Australia, and NCS, the regional enterprise services arm. Optus saw a 55% y-o-y increase in ebit to A$446 million ($370 million). Its CEO, Stephen Rue, says: “Our growth is driven by tight cost management, our ability to grow our subscribers, improve ARPU [average revenue per user] across multiple products, and bring down churn at the same time.”
To further manage costs, Optus will continue to simplify its business and products. “We’re modernising our network architecture and improving our data and AI capability to help us deliver better products and customer experience. We’re also seeing mid-tier and enterprise customers wanting services beyond connectivity, so we’re working with NCS to jointly deliver those capabilities as NCS has the skill set,” shares Rue.
As for NCS, its ebit increased 39% y-o-y to $254 million, driven by continued improvements in delivery margins and cost optimisation. The enterprise unit recorded bookings of $3.2 billion in FY2025, up 5% y-o-y, boosted by new wins and contract renewals in various sectors.
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NCS’s CEO Ng Kuo Pin shares that growth will continue to be driven by its three-axis strategy, which focuses on geographic expansion, diversification beyond government clients to include enterprises and telcos, and delivering digital capabilities — from traditional core IT services to emerging technologies like AI. Earlier this year, NCS announced a joint venture with Globe in the Philippines to increase its capacity to meet the region’s growing demand for digital services, particularly AI-led solutions.
All in, Singtel’s underlying net profit for the year ended March 31 (excluding exceptional items) rose 9% to $2.47 billion. Net profit for the full year came to $4.02 billion, which included a one-off $1.55 billion gain from the partial divestment of Comcentre, its headquarters.
Gearing up for AI-ready data centres
Beyond the mobile associates, Singtel is investing in new growth areas although they might take time to bear fruit. Its so-called Digital InfraCo posted a 5% rise in operating revenue, boosted by non-recurring customer reservation fees, utility pass-through charges, and price increases at its Nxera data centre business.
Yuen identified Nxera and the RE:AI platform — which are part of Digital InfraCo — as new growth areas for Singtel but said their contribution will remain limited in the current FY2026 as both are “still in the investment phase”. Launched last October, RE:AI enables enterprise customers to deploy, manage and scale their AI applications without managing complex infrastructure.
Digital InfraCo CEO Bill Chang expects recent changes to the US export policy on AI chips under the Trump administration to benefit both Nxera and RE:AI. While the previous Biden-era rules imposed strict controls on Tier 1 and Tier 2 countries, the new framework eases restrictions on Tier 2 markets — including much of Southeast Asia, where Nxera operates — allowing greater access to GPUs.
Nxera’s AI-ready data centres, he adds, are already seeing strong demand as they offer liquid cooling at scale and are designed to support high-performance AI workloads. Around 80% of its Thailand facility and 50% of its Singapore site have already been pre-sold ahead of their respective launches in June 2025 and January 2026.
Chang also believes that Singapore’s ongoing negotiations with the US authorities to raise its current GPU cap is poised to benefit Singtel’s GPU-as-a-service (GPUaaS). Aiming to provide enterprises with access to Nvidia’s AI computing power, Singtel’s GPUaaS is powered by Nvidia H100 Tensor Core GPU-powered clusters that are operated in existing upgraded data centres in Singapore.
While the tariffs will not have a direct impact on Digital InfraCo as it is providing services, Yuen notes that there may be secondary impact. “If the world goes into recession or there’s negative GDP growth, everyone will be cutting back on their expenses, so the demand for services — be it for consumers or enterprises — would fall in every country.”
The growth constraints are apparent in Singtel’s domestic business, which reported a 2% rise in ebitda for FY2025, supported by growth in the small and medium-sized enterprises and ICT segments as well as cost control. Operating revenue fell 2%, primarily amid a continued decline in legacy carriage services.
Mobile service revenue was stable, with lower ARPU from intense price competition, inclusion of larger data bundles and aggressive roaming bundling in price plans. Ebit was stable after including higher amortisation charges from its recent acquisition of 700Mhz spectrum and increased depreciation.
Earlier this month, Singtel launched 5G+ Priority in Singapore, a premium consumer mobile plan powered by network slicing. The plan promises up to four times faster speeds, ultra-low latency, greater bandwidth and guaranteed access even during peak network traffic periods. By combining network slicing with the new 700MHz spectrum — which offers better building penetration and broader coverage — the telco aims to deliver more reliable connectivity for consumers.
Yuen asserts that Singtel remains committed to its Singtel28 growth strategy. “We are guiding for high single-digit ebit growth in FY2026, underpinned by Singtel’s diverse business portfolio, continued operational improvements and cost efficiency,” he says.
