Singtel to focus on three growth areas in digital business

Singtel to focus on three growth areas in digital business

Singtel has sharpened its digital business strategy to focus on three growth areas.

After a review of its group digital life (GDL) business, it has consolidated efforts on digital marketing service Amobee, regional online video streaming service Hooq and an advanced analytics and intelligence capabilities service called DataSpark.

As part of the tweak, it also scaled back its digital services.

It moved the online services previously under GDL, such as music service AMPed, lifestyle portal Insing.com, news and lifestyle portal NewsLoop, mobile money service provider Dash and restaurant reservation service HungryGoWhere, to Singtel's Singapore consumer business.

This offers greater synergy with the consumer business as they can be bundled, say, with data plans or phone sales.

It axed some digital services, especially those in the online entertainment and e-commerce areas that had limited growth, such as mobile gaming WePlay, online store Lyke and interactive education service Genio.

Singtel chief executive Chua Sock Koong said that in the last three years, the telco has experimented to see how its telco capabilities could be best used in the digital era.

"We have identified digital marketing, regional premium OTT (over-the-top) video and advanced analytics as key growth areas," she said in a media statement yesterday.

Singapore's largest telco will redouble its efforts to build Amobee, Hooq and DataSpark to become significant players, she added.

A board which includes independent directors with domain expertise will be appointed for each of these businesses to help them grow in this fast-moving digital space.

A new head has been appointed for GDL.

Mr Samba Natarajan will become the new CEO, replacing Mr Jonathan Auerbach, who has relinquished the post. Mr Auerbach will remain chairman of Hooq and a director of Amobee.

The telco also said current group chief financial officer Jeann Low will take on the role of chief corporate officer, overseeing corporate functions such as strategy, mergers and acquisitions, legal and regulatory operations. Replacing her as CFO is Ms Lim Cheng Cheng, the current deputy CFO. The appointments are effective immediately.

GDL was set up in 2012 to capture opportunities in the digital world. It acted boldly to realise this strategy by acquiring companies. Among its acquisitions was Amobee in 2012, for which it paid US$321 million (S$436 million).

Singtel teamed up with Sony Pictures Television and Warner Brothers Entertainment to found Hooq Digital Holdings to offer online video streaming to countries in the region.

It will offer Hollywood blockbusters and television series, as well as popular local movies and programmes in each country.

Hooq has been launched in the Philippines, with plans to expand to other ASEAN countries soon.

DataSpark was set up a year ago with the telco's internal resources to offer analytics and intelligence. It works with organisations here, such as government agencies, on projects like urban planning. It uses its mobile data to get insights on consumer behaviour.

One of its reports is Shopalytics, which crunches data from more than 50 shopping malls.

It can show retailers, for example, what they are missing to drive higher traffic to their stores and increase sales.

Nomura analyst Sachin Gupta said Singtel's GDL new strategy will see the unit progressing more moderately, but in a more focused manner.

However, there are still concerns about the telco's ability to capture new revenue streams with its digital services, he added in a first-look analysis on the changes.

Of the digital services, like HungryGoWhere, that were being moved to the Singapore consumer business, he said that it indicates that they have greater potential for revenue and profitability.

Of the frequent changes in GDL's management, Mr Gupta said it could be reflection of the difficulty in growing and integrating some of these businesses with the telco's business.

Singtel's digital transition is still very new and the strategy and focus is still evolving. In some ways, the GDL can be even classified as research and development, since it seems to be an experiment, he added.

chngkeg@sph.com.sg


This article was first published on April 11, 2015.
Get a copy of The Straits Times or go to straitstimes.com for more stories.

This website is best viewed using the latest versions of web browsers.