SingTel's Financial Position Analysis

This assignment investigates the financial health of SingTel by applying PESTLE and SWOT analyses. It explores external environmental factors impacting SingTel's business and internal strengths, weaknesses, opportunities, and threats. The report concludes with recommendations for SingTel to enhance its productivity and competitive advantage, particularly emphasizing a cost leadership strategy to counter new market entrants.

Running head: MANAGEMENT ACCOUNTING
Management Accounting
SingTel

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Table of Contents
Introduction...........................................................................................................................................2
Overview of Company.......................................................................................................................2
Vision.............................................................................................................................................3
Mission..........................................................................................................................................3
Impact of Business Environment on the Financial Performance of SingTel Company.......................3
PESTLE...........................................................................................................................................3
SWOT.............................................................................................................................................7
Recommendations.............................................................................................................................8
Conclusion.............................................................................................................................................9
References...........................................................................................................................................10

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Introduction
The report is about an international company i.e. Singapore Telecommunication limited
which is popularly known as SingTel. The report will discuss the business environment
which can have a major impact on the financial performance of the SingTel. Along, with this,
the report will provide recommendations for the company to improve its competitive
advantages.
Overview of Company
Singapore Telecommunication Limited (normally known as SingTel, and earlier portrayed as
Sing Tel), it deals in the sector of the telecommunications industry (SingTel, 2018).
Singapore’s biggest operators of the mobile network are SingTel with 4.1 million subscribers
and have combined subscribers of mobile through subsidiaries with customer’s base of 640
million in 2017 (Dun & Bradstreet, 2018). Till 1995 SingTel was also called as Equipment
Telecommunications. It offers networks of a mobile phone, fixed-line telephony services, and
ISP (Business wire, 2010).
SingTel has increased its market share and gone out of the boundary of home market and has
its shares in various regional operators, consisting 100% of the Optus. It is the second largest
telecom of Australia which was acquire from Cable & Wireless in 2001 and another

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shareholder of Optus, and Bharti Airtel’s 32.15% which is the biggest carrier in India
(National Library Board Singapore, 2018).
Vision
The vision of SingTel is to become the best company of communication technology in the
Asia Pacific (SingTel, 2018).
Mission
The mission of SingTel Company is to break the barriers and build strong relations with the
customers.
Impact of Business Environment on the Financial Performance of SingTel Company
There are various environmental factors that have an impact on the SingTel’s financial
performance. Trade barriers, changes in government policy, tax changes, demographic
change and new laws are some of the examples of change in business environment.
PESTLE
Source [http://undergroundwaterproject.blogspot.in/2011/03/pestle-analysis.html]

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Political
The Singapore’s Telecommunication Authority i.e. (Tas) has strongly supported the
Telecommunication’s Privatization and Liberalization in Singapore. The whole
telecommunication industry including SingTel Company has entered in a phase which is
determined by fast-changing technology and encouraged by the demands of progressively
cultured end-users. In order to fulfil these demands, the worldwide trend towards
Liberalization, Deregulation, and Privatization has increased in the Telecommunication
industry. This particular trend has generated various opportunities along with the challenges
for SingTel Company. Competition, Deregulation, and Liberalization, therefore, propose a
feasible method for safeguarding the delivery of services with better quality at extremely
viable prices.
Economics
One of the factors that affect the business of SingTel Company directly is economic situation.
Globalization has crossed the national boundaries, unlocked and enlarged business and trade
has similarly an opportunity for the country. Therefore, the use of services and
telecommunication devices has improved globally and the development is anticipated to carry
on. This has offered the opportunity to SingTel Company to participate overseas, in order to
increase the market share and uphold productivity.
Recently, the government of Singapore has greatly invested in expanding the economy. The
business sector will generate a better environment in order to help and encourage the
employees as well as launching the financial and legal business structure. The overall
economic sector will regularly grow such as financial service, retail, and tourism industry and
consultant service. The expansion of several economic factors offers SingTel the opportunity
to increase business domestically.

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Social- Culture
The culture of Singapore is distinctive with four main ethnic groups: Malays, Eurasians,
Indians, and Chinese. Today also they intensely have faith in their traditional value while the
younger or new generation has started adopting the western culture. Particularly, there is a
stage in the Singaporean attitude that “kiasu” which means scared of losing out to other.
Through this attitude, several young Singaporean has operated hard to get high income and
follow the modern and new technology. They continuously change their lifestyle, the demand
for quality goods and purchase behavior. This reflects an opportunity for SingTel Company
to raise their profits and returns by proposing the customized and new services and product
(Frue, 2018).
Technology
Nowadays, there are continuous development and changes in the technology. The modern
services like Internet telephone and the rising users of telecommunication are the cause for
the company to invest in advanced technologies for developing services and products. In the
present business scenario, SingTel Company includes services in their offerings like a
telephone line, mobile services, internet services and e-commerce. But SingTel Company has
recognized internet-based activities and e-commerce, which have a major growth in customer
segments. Thus, investment in technology is an essential part of the strategy of SingTel
Company for the long-term growth. Similarly, the high investment in established technology
was the serious issues made SingTel’s flourish in the past.
Legal
In 2009, IDA (Info-communications Development Authority of Singapore) has announced a
decision with concern to the exemption request of SingTel for the government customer and
business segment and Individual Markets. This assists SingTel to pursue an exemption from
the application of Dominant Licensee regulation to its facility in six individual markets of
telecommunication services, overall services of retail telecommunication services to

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customers in the segment of the business and government customer with a yearly spend on
the services of telecommunication of at least S$250,000.
In the whole world, the most advanced communication and information technology is in
Singapore with very great heights of access. This has become possible because of the
country’s small size along with the increasing levels of government commitments towards
excellence of telecommunication and income of people. SingTel Company was initially a
monopoly on the field of ICT till the other companies entered in the market (Zhu, 2018).
Environment
Changes in climate and global warming can disturb how telecommunication services and
products reach customers. In the matter of employment, with the advancement of technology,
employees have to grab or adopt the changes. Products will come and go, frequently switched
by something ‘better’ (based on who is inquired, company or customer).
Demands of the customers and telecom companies are anticipated to deliver. But with wants
in the industry of telecom altering frequently, it's not definite which technology will remain
for longer, be progressive, or discarded. SingTel Company faces the danger of the breakdown
of, damage of, or loss to the infrastructure of the network from original (Catastrophe) or man-
made reasons.

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SWOT
Source [https://www.projectsmart.co.uk/swot-analysis.php]
Strengths
Most of the operational, strategic and financial dynamics of SingTel are presently enhancing.
It is working as a sign that the present business strategies of the company are demonstrating
to be fruitful and successful (MBA Skool, 2018). The company’s key business events are
focused in Australia and Singapore and their associates are placed in Hong Kong, India,
Philippines, Belgium, Indonesia, Thailand and Taiwan. The spread of geographical processes
will help the company; because they will be less depending on the domestic market in order
to earn revenue. Maximum of their businesses are receiving revenue growth in double-digit
over the past year.
Weaknesses
In Asia, SingTel Company is a top telecommunication company; the customer service
department of the company has some scope for improvement. Under the present highly
competitive environment, companies have to offer different products, therefore; to do this the

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company should provide training to its employees in order to handle the problems of the
customers more effectively.
Opportunities
Vietnam and Africa are the emerging markets in mobile space, which absolutely value their
interest, and SingTel Company is keenly captivating the lead to discover the unused
developing telecom market.
Threats
At the time when Star Hub and Mobile One get certificates to sell Apple’s widely held
iPhone and they established on 9 December 2009, the 15th-month monopoly was lost by
SingTel Company. Therefore, the company will probably face stronger competition in the
domestic market.
Recommendations
The SingTel Company must make non-replaceable and appreciated competitive advantage by
creating durable core competencies and proficiencies. Depending on the competitive
advantage, Richard D’Aveni and Cliff Bowman used ‘Strategy Clock’ in order to describe
Michael Porter’s ‘generic’ strategy. This strategy signifies diverse places in a market where
consumers have diverse ‘necessities’ in terms of worth for money. The company can have
exclusive resources that others can’t copy or acquire, for instance, long-term recognized
brand; have a cost leadership as they follow lower-prices or price-based strategy. On the
other hand, in the small local saturated market such as Singapore, managers might take
hybrid strategy or differentiation strategy that offers exclusive or somewhat diverse services
or products to customers from others by valuing a little higher.
SingTel Company should implement a cost leadership strategy, because the company can
competently make services with unique attributes, along with the ability to retain cost at the

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same time. The company can earn additional income by fulfilling the growing demands of the
customer, and permit its services and products to be supposed inversely from the competitors
which will work as an opportunity for the company to gain the customers loyalty. Along with
this, the strategy of cost leadership would allow the company to vend its services and
products both at normal prices in the industry in order to get more profits as compared to
competitors or at less than the prices of the industry to increase the market shares.
As alternatives or substitutes influence the companies of telecommunication by price
competition, the strategy of cost leadership can be utilized in order to counter the new
entrant's threat and alternates; providing it a competitive advantage (Zhu, 2018).
Conclusion
The above report has provided the brief explanation of the environmental factors that affect
the financial position of the SingTel Company. PESTLE and SWOT are performed to explain
the same which has explained all the factors that affect the business. Along with this, the
report has provided some recommendation that can help SingTel Company to improve its
productivity and competitive advantage. In the conclusion, it has been identified that the
company can adopt cost leadership strategy to give competition to the new entrants in the
Singapore market.

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References
Business wire, 2010, Research and Markets: Singapore Telecommunications Limited
(SingTel) - SWOT Analysis, Accessed on: 23 January 2018, Accessed from:
https://www.businesswire.com/news/home/20101207005883/en/Research-Markets-
Singapore-Telecommunications-Limited-SingTel--
Dun & Bradstreet, 2018, Singapore Telecommunications Limited Company Information,
Accessed on: 23 January 2018, Accessed from: http://www.hoovers.com/company-
information/cs/company-
profile.singapore_telecommunications_limited.c030f6883ed3f00b.html
Frue, K., 2018, PESTLE Analysis of the Telecommunication Industry, Accessed on: 23
January 2018, Accessed from: http://pestleanalysis.com/pestle-analysis-of-the-
telecommunication-industry/
MBA Skool, 2018, SingTel Optus SWOT Analysis, USP & Competitors, Accessed on: 23
January 2018, Accessed from: https://www.mbaskool.com/brandguide/telecom-service-
providers/10444-singtel-optus.html
National Library Board Singapore, 2018, Singapore Telecommunications (SingTel), Accessed
on: 23 January 2018, Accessed from:
http://eresources.nlb.gov.sg/infopedia/articles/SIP_1610_2011-03-21.html
SingTel, 2018, About The Singtel Group, Accessed on: 23 January 2018, Accessed from:
http://info.singtel.com/sustainabilityreport2015/pdf/Chapter3_SR2015_AboutSingtel.pdf
SingTel, 2018, Company Profile, Accessed on: 23 January 2018, Accessed from:
https://www.singtel.com/about-us/company/company-profile

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Zhu, A., 2018, Singtel Business-level Strategy, Accessed on: 23 January 2018, Accessed
from: https://business-strategy-competition.knoji.com/singtel-businesslevel-strategy/
Zhu, A., 2018, External Analysis of Singapore Telecom, Accessed on: 23 January 2018,
Accessed from: https://business-strategy-competition.knoji.com/external-analysis-of-
singapore-telecom/