That said, Optus remains strategically important for Singtel. Despite the volatility in its share price since the recent incidents, analysts have maintained their “buy” on Singtel.
It is Australia’s second-largest operator, is operationally improving, and has seen heavy network investments over the past decade. As a wholly owned subsidiary, it contributes around half of Singtel’s consolidated revenue, though it lags behind other regional associates in terms of profit contribution.
The latest Optus incident has forced minds at Singtel in Singapore and Optus in Australia to focus on the shortcomings that led to the latest debacle, and various other incidents in recent years. In the wake of what happened last month, management at both Singtel and Optus have also reaffirmed their long-term commitment to improve quality of service and efficiency of operations.
Meanwhile, Australian media reports of under-investment appear overstated as Optus has consistently managed a capital expenditure of almost 20 per cent to sales over the last 10 years.
But there is no denying that what happened last month was a serious stumble. The outages should not have happened. Lives should not have been lost. Events could have been better handled. Lessons must be learnt, and are – hopefully – being learnt.
History suggests that if the right things are done, and things are done right, customer confidence could return in about three months.
In the meantime, there is no real pressure, or need, for Singtel to sell out of Optus. The task ahead for Optus – and by extension, Singtel – is to work hard to rebuild customer confidence in Australia.
Ven Sreenivasan is a former editor and journalist who has covered financial markets, economic and corporate news and aviation for more than 30 years.
