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Selling Optus makes perfect sense for SingTel for more than one reason – Australia and Singapore are saturated markets and leveraging Optus will foster growth.

First of all there is SingTel’s success in the Asia mobile market. It is one of the few international mobile operators that has been able to move out of its national market and succeed in the international marketplace. 

The figures speak for themselves: 

Global Mobile Subscribers SingTel

Operator	Subscribers (000)
SingTel	3,100
Optus	8,225
Bharti	110,511
Telkomsel	79,774
AIS	28,282
Globe	23,128
Warid	18,468
PBTL	1,979

(Source SingTel – November 2009) 

Most of these markets still have enormous growth potential, while Australia, and Singapore for that matter, are saturated markets. Optus easily represents the largest operating unit within SingTel and as such is key to the financial possibilities of the organisation; so looking at leveraging Optus as a possibility for its potential growth makes sense. 

From these figures it is obvious where SingTel’s international future lies – in mobile. 

Now let's analyse the Australian market. 

As indicated, a saturated mobile market with increased mobile competition from Vodafone/Hutchison (VHA), can only lead to lower margins. There will also be an increased undermining of the lucrative phone market by VoIP services; this will be driven by smart phones. Furthermore Telstra is reviewing its strategies and a more aggressive sales approach is expected to emerge in the near future. 

Of course there are interesting developments in relation to the NBN, and Optus certainly does have options there. In reality, however, the business model that Optus currently follows will have to change and the company will have to decide which direction it wants to take. The focus on national infrastructure developments will obviously move towards NBN Co. While some good opportunities will remain in the corporate (CBD) market, infrastructure is unlikely to be a growth market for Optus. 

At the moment the company will, of course, keep its options open for a possible shareholding in NBN Co. Its success or otherwise in the tendering process for the backhaul blackspots program will impact future developments here also. 

The new structurally separate telco market offers a whole new range of options for Optus as well, but that would require changing business models, and perhaps investing in new retail models that the company has little or no experience with. As mentioned, SingTel is very successful in mobile and it will have to weigh its mobile options in other Asian markets against the opportunities in Australia. 

It therefore makes sense for the company to consider the alternatives at this point in time, where changes will have to be made anyway. Depending on the outcome of the NBN negotiations with Telstra and the results of the implementation study SingTel could also separate its Optus businesses and follow the new opportunities in the various areas that might arise from that. 

The company is in excellent shape, still with good growth prospects ahead. It can afford to sit back and watch events unfold, at which point it will be in a good position to make the right decisions.