DBS Group Research has on Nov 8 maintained its "buy" call and $3.82 on Singapore Telecommunications Z74 following a fine of just A$12 million for service outage in its Australia subsidiary last year.
On 8th November 2024, Optus was fined A$12 million ($10.47 million) for failing to provide emergency call services
"No further regulatory actions are expected, and there will be no impact on our projections due to the existing provisions," says DBS, noting that Singtel has already provided $54 million for the outage.
As such, DBS will not be making changes to its projections for Singtel's earnings as no further regulatory actions are seen related to this incident.
Singtel will be reporting its 1HFY2025 ended Sept 30 results on Nov 13.
However, Optus continues to face a couple of other ongoing issues Down Under, such as one related to a cyber attack and more recently, allegations of ''unconscionably' selling to some vulnerable customers, says DBS.
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Back in 2023, Optus failed to provide emergency (triple zero) call services to thousands during a nationwide outage.
A routine software upgrade to Optus’ mobile network caused a 14-hour service disruption across the country.
DBS notes that telecommunication providers are generally required to maintain an alternative network for triple zero calls, but the Australian Communications and Media Authority (ACMA) found that 2,145 customers were unable to access the emergency call service during the November 2023 outage.
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In addition, Optus failed to conduct welfare checks on 369 of these customers after the outage was resolved.
According to DBS, Optus has since invested US$1 billion in network maintenance and upgrades to enhance emergency call handling during network issues.
Singtel shares closed at $3.25, up 1.56% on Nov 7, amid a broader bank-driven rally of the local bourse.
