Thailand, RP 'attractive': SingTel

Thailand, RP 'attractive': SingTel

Bloomberg, Singapore

Singapore Telecommunications Ltd., Southeast Asia's largest phone company, said the mobile-phone markets in Thailand and the Philippines remain "attractive" even as growth has slowed.

SingTel, as the company is known, on Thursday reported a 14 percent jump in fiscal first-quarter profit to S$796 million (US$$482 million) as it gained more phone users in India and Indonesia.

Pretax profit at its Thai associate, Advanced Info Service Pcl, fell 2.2 percent to S$76 million while at Globe Telecom Inc., Singtel's investment in the Philippines, it declined 9.9 percent as sales growth slowed.

"We're long-term investors. We believe fundamentally these are attractive markets," Chief Executive Lee Hsien Yang, 47, said in an interview.

"The Thai economy has been going through a slightly rougher patch in recent times. Competition in Thailand can be quite intense."

Sales at Globe, the second-largest Philippine cell-phone operator, grew at the slowest pace in at least five years as market-leader Philippine Long Distance Telephone Co. offered cheaper calls through its fixed-line network to its own mobile users while charging subscribers to other operators more.

Advanced Info, Thailand's biggest cell-phone operator, faces rising competition as the nation's mobile companies cut prices to gain market share and retain customers.

"The slowdown in growth in Thailand and the Philippines seems to be a temporary phase," said Teo Chon Kiat, who helps manage $1.4 billion of investments in Asia at DBS Asset Management Ltd. in Singapore, including shares of SingTel.

"But there's still growth, and in the longer run they will do better than the developed markets like Singapore and Australia."

Thailand, Southeast Asia's second-biggest economy, may expand as little as 3.5 percent this year, from 6.1 percent growth in 2004, amid rising fuel costs and a widening trade deficit, the central bank said on July 28.

Lee said the company will continue to look for acquisitions although with a "disciplined approach."

"Paying the highest price doesn't necessarily always mean having a successful strategy," he said.