Broker: Maybank Research Pte Ltd
Date of Report: September 3, 2025
Singtel’s Multi-Pillar Growth: Why This Telco Giant Is Set to Outperform
Introduction: Singtel’s Next Wave of Growth
Singapore Telecommunications Limited (Singtel, ST SP) continues to demonstrate resilience and growth, emerging as a leader across Southeast Asia and Australia. Despite outperforming expectations, Maybank Research believes Singtel’s growth story is far from over, driven by three major pillars:
A robust recovery and rational competition in Australia (Optus)
Market consolidation in Singapore
Immense opportunities in AI and data centers (Digital Infraco)
This article dives deep into the operational, financial, and strategic outlook for Singtel and its associates, presenting a comprehensive analysis for investors, market watchers, and analysts.
Singtel Snapshot: Market Position and Performance
Singtel stands as Singapore’s largest and Australia’s second-largest telco, with substantial exposure across India, Indonesia, Thailand, and the Philippines.
Key Statistics:
Share Price: SGD 4.39 (as of report date)
12-month Price Target: SGD 4.75 (+13%)
Market Capitalisation: SGD 72.5B (USD 56.3B)
Major Shareholders: Temasek Holdings (50.3%), Central Provident Fund (4.6%), Capital Research & Management (1.6%)
Issued Shares: 16,515 million

Optus: Multi-Engine Recovery and Margin Expansion
Rational Competition Drives ARPU and Revenue Growth
Australia’s telco market is witnessing rational competition, with all three major mobile network operators (MNOs) — Telstra, Optus, and Vodafone/TPG — implementing broad-based price hikes throughout 2024–2025. For instance:
Telstra: Raised prices by AUD 3–5/month from July 2025
Optus: Increased postpaid plans by AUD 2–6/month from June 2025, plus prepaid/top-up hikes
Vodafone/TPG: Hiked various postpaid tiers by ~AUD 4/month in Mar–Jul 2025
These disciplined pricing actions have resulted in rising ARPU and revenue for all players, with Optus mobile service revenue up 4% YoY and Telstra postpaid ARPU up 2.5% YoY.
Supportive Macro Backdrop
Australia’s macroeconomic environment remains stable, with IMF and OECD forecasting GDP growth of +1.8% in 2025 and +2.2% in 2026, alongside low unemployment rates (4.2% as of July 2025) and robust consumer sentiment. This macro strength supports resilient spending on telco services.
Margin Catch-Up and Capex Optimization
Optus has made significant strides in cost optimization, improving its EBITDA margins by 130bps over three years. However, its margins still trail Telstra and TPG by 4–5 percentage points, indicating further room for self-help. The Multi-Operator Core Network (MOCN) partnership with TPG enables infrastructure sharing in regional Australia, reducing future capex intensity and enhancing capital efficiency.
Financial Outlook and Valuation
Optus is expected to deliver:
Mobile revenue CAGR: 4% (FY25–28)
EBIT CAGR: 27%
FCF CAGR: >100%
Maybank upgrades Optus EBIT estimates by 5–20% and its DCF valuation by 36%, applying an 8x EV/EBITDA (still a 2–11% discount to Telstra and TPG).
Singapore Mobile: Consolidation to Spur Price Recovery
Market Rationality Post-Consolidation
The Singapore mobile market is poised for consolidation, mirroring global trends where industry revenue growth typically rebounds by ~5% post-merger due to restored pricing discipline. Singapore’s ARPUs have contracted sharply — 36–41% since 2017, now 15–40% below developed Asia peers.
Structural Headwinds for Merged Entities
The merged entity (M1 + Simba) faces:
Legacy exposures (roaming, caller ID)
High leverage (~4x net debt/EBITDA)
Integration complexity
Limited cost synergies due to shared infrastructure (Antina)
These factors restrict near-term upside but create space for price rationality and ARPU recovery for incumbents like Singtel.

Digital Infraco: Nxera’s Data Center and AI Expansion
Data Center Pipeline and Differentiation
Singtel’s Nxera unit is rapidly expanding its ASEAN data center footprint, with more than 50% of its flagship 58MW Tuas site (launching Jan 2026) and 80% of its first Thailand facility already pre-sold. Its regional pipeline stands at ~400MW, including Johor and Batam.
Nxera’s differentiation stems from:
Dual role of data centers as cable landing hubs
Sovereign-compliant orchestration across Singapore, Malaysia, Indonesia
Advanced liquid cooling supporting >200kW/rack GPU deployments
Expansion into Tier-1 Markets and CFA2 Allocation
Nxera is preparing to enter Japan and Korea with Hitachi, targeting supply-constrained Tier-1 markets. Singapore’s DC-CFA2 allocation presents a major opportunity to secure premium data center capacity.
GPUaaS: Leading Sovereign AI Infrastructure
Singtel’s RE:AI journey is transitioning GPU-as-a-Service (GPUaaS) from pilot to scale:
Initial H100 cluster (512 GPUs) already fully booked
Customer-underwritten GB200/300 deployments for pharma, research, and AI enterprises
Long-term contracts ensuring mid-teen returns
Expansion into Japan (with Hitachi) and broader ASEAN
Peers such as Deutsche Telekom (AI gigafactory), SK Telecom (Haein cluster), KDDI/NTT (AI-ready centers), and Indosat are also moving decisively in GPUaaS.
Associates: Performance Across ASEAN and India
Singtel’s associates — Telkomsel (Indonesia), Bharti Airtel (India), AIS (Thailand), Globe (Philippines) — are showing marked improvements, bolstering group earnings.

Valuation, Yield, and Capital Management
Singtel’s valuation remains compelling, supported by attractive yields and potential share buybacks:
SGD 5 billion earmarked for value realization dividends (VRD); SGD 1.4 billion already paid over two years
VRD likely to extend beyond FY28 to FY30, with potential top-ups from further capital recycling
Holdco discount remains elevated at 25%, suggesting further upside

ESG Profile: Robust Sustainability and Governance
Singtel demonstrates a strong ESG profile with high transparency and ambitious targets:
Net-zero goal advanced to 2045
Scope 1 & 2 emissions reduced by 11.31%
Multiple solar energy projects (1.38MWp, 1,700MWh annual generation)
43% female directors; zero corruption cases in past three years
Recognized for gender equality and digital inclusion initiatives
ESG score: 85 (well above peer average of 50)

Financial Metrics, Key Ratios, and Outlook
Singtel projects healthy growth across revenue, EBITDA, and net profit, with robust margins and liquidity.

Other Companies in Focus
Australia: Telstra (TLS AU), TPG (TPG AU)
Both are key competitors to Optus, with industry-wide price hikes and margin expansion.
Europe & Asia:
Vodafone (VOD LN): Involved in global consolidation trends
SK Telecom (017670 KS): Leader in GPUaaS and sovereign AI cloud
KDDI (9433 JT), NTT (9432 JT): Investing heavily in AI-ready data centers
Deutsche Telekom (DTE GY): Developing industrial-scale AI gigafactories
Indonesia: Indosat Ooredoo Hutchison (IOH)
Rapidly expanding AI infrastructure, strong revenue and EBITDA outlook.
Risks and Upside Potential
Upside Factors
Successful Optus revamp boosting ROIC and FCF
Sustained ARPU growth as price competition eases
Strong execution of cost savings and digital initiatives
Downside Risks
Delays or fines related to Optus network & IT issues
Intensifying competition in core markets
FX headwinds impacting Optus and associates
Conclusion: Singtel, Well-Positioned for Sustained Outperformance
Maybank Research reiterates its BUY rating on Singtel, raising its target price to SGD 4.75 (+11%). The company’s multi-pillar growth, rational competition, regional expansion, and advanced digital infrastructure position it as a compelling investment for yield, growth, and capital appreciation. Investors can expect robust dividends, further asset optimization, and long-term upside amid a resilient business model and strong ESG credentials.