Yuen Kuan Moon
To understand Singtel, you really have to understand: What are the underlying businesses that we have today? Actually, Singtel has got many different businesses; it is actually eight companies. In fact, more than 75% of profit comes from outside of Singtel.
Lee Da Wei (V.O.)
For more than 140 years, Singtel has been a cornerstone of connectivity in Asia, evolving from a national telecom into a regional powerhouse. Now, under CEO Yuen Kuan Moon, the company is transforming itself from a traditional telco to a tech co, focused on next-generation data centers, AI infrastructure, and IT services essential to the next wave of growth in Asia's digital economy. As an analyst covering Asian telecom, I wanted to understand how one of Asia's most influential CEOs is leading the multinational organization through disruption and reinvention. So, I sat down with Moon to talk about his vision for Singtel, the future of connectivity in the region, and the leadership principles that are shaping the next chapter of this iconic company.
Lee Da Wei
Thank you for joining us here today.
Yuen Kuan Moon
Happy to be here.
Lee Da Wei
You've been leading Singtel through a major transformation since you stepped into a role as CEO. What's your long-term vision for Singtel like?
Yuen Kuan Moon
When I took over, it was really about cleaning up, about making our business simpler, and really removing a lot of businesses that were not profitable. It took us a while to do that and then to refocus back onto the core business. I then introduced what we call The Singtel 28 Plan. The Singtel 28 strategy is really about transforming Singtel beyond just being a telco, and if you look at all the operating business within the group—in the region and both in Singapore and Australia—we need to operate [our] telco a lot more efficiently, as a tier one telco. Basically, what we want to achieve is to deliver good returns at an individual operating company level.
And on top of that, then we look at where we need to invest in growth. And the two areas of growth we've identified is really on the area of data centers and secondly, on IT services, as in NCS. So, with these two engines, giving us the next wave of growth and the core telco business operating and executing well, this gives us the opportunity to unlock value.
Lee Da Wei
I understand that Singtel has actually strategic stakes in a lot of the leading telcos across [the] Asia-Pacific region. How do you actually see the role of these regional sources evolving within Singtel’s portfolio?
Yuen Kuan Moon
We have reached a stage where the business is mature, and we are kicking in a second wave of growth in many of these markets. First, it's coming from fixed broadband business. So, from Indonesia to India to Thailand and [the] Philippines, you can see all our operating companies that are investing in fiber rollout within each of these markets.
So, the penetration of fiber to the home is actually low, from as low as less than 30% in Indonesia to even the highest, probably in Thailand at about 41%. And this is nowhere near what we have seen here in Singapore, where you can get 98% fiber penetration. So, we are still very far away from hitting that high fiber penetration. So, this is one area [where] I see the next wave of growth for the regional markets.
The second area is in the space of fixed enterprise. [In] many of these markets, you see the enterprises [and] businesses are being underserved. So, there's a big need or gap in serving them on traditional local interconnection and international circuits and beyond just pure connectivity in the enterprise space. We also see opportunities in new digital investment in these countries, in similar growth strategy of what Singtel is pursuing in data center and in IT services.
Lee Da Wei
What role do we actually see Singtel playing in Asia's digital economy?
Yuen Kuan Moon
Many of the customers are looking at capacity, not just specifically in one country. They are looking across the whole region, where [is] the capacity of high-quality data centers and who is building them to the right specs, to the right reliability, and with the right sustainability requirement. And being a player in the region actually helps us anchor and secure this relationship with all our potential customers.
So, when we invest together with our local partners in each of the markets, we do bring our core competency, our strengths, and they also bring their local knowledge, their local competency in terms of the regulatory environment, the energy requirements, as well as the land requirement in each of their respective markets.
Lee Da Wei
What about sovereign AI? There is this idea that nations should develop and own [their] own AI. What's your take on this particular topic?
Yuen Kuan Moon
I think as we see the technology evolve, many governments in countries that we are aware of in the region are looking at keeping the data within the country, [by] processing sensitive data, and that's where sovereign AI comes in.
So, a lot of this will be conducted at the local level, and therefore, there's a need for data centers to run AI workload. I think we will have to look at the two businesses quite separate, while they are synergistic. And I think it will come— there will be more and more requirements for sovereign AI in each of the countries that we operate in, and that's why we are very positive about a data center business in the region. I believe we will be best placed to secure the customer and provide the solution for the country.
Lee Da Wei
What are your key priorities? How do you think about capital allocation for Singtel overall?
Yuen Kuan Moon
Singtel is committed to payout 70% to 90% of our underlying profit as dividend, right, and this underlying profit [is] primarily from our core operating business. And this comes from our telco business, from Singtel, from Optus, from NCS, and from our data center business, as well as from the profits from our associates.
More than 70% of our current underlying profit comes from our associates. As we improve our operations from Optus, from NCS, and from Singtel Singapore, you see that the absolute amount of these underlying profits will grow.
Lee Da Wei
Singtel two years ago actually brought forward its net zero pledge by 2045. And so how do you actually execute towards this target, while at same time you're trying to grow data center footprints, which are very energy-hungry infrastructure assets?
Yuen Kuan Moon
The new data centers that we are building will be of the highest Green Mark status that we will pursue. And not only that— even [with] some of our existing older data centers, we are aggressively sort of recycling them into more efficient green energy data centers. So, it is not just about adding on new stuff. It is also about what we have today.
So, it is a continuous effort of turning today our brown energy into green, making our operations a lot more efficient, and then pursuing new growth. In the area of new data centers, if we pursue [them] outside of Singapore, then we will have to work with our local partners to make sure that as we build the data centers, we will be as green as possible within the context of the country.
We have to appreciate that in Singapore, as a country, we have committed to going net zero by 2050, but we also have to appreciate that in the region, many countries [do] not have the same timeline. They may be further out: 2060, 2070, or 2075. So how do we reconcile each country's, you know, net zero target. And how do we operate as a group when we consolidate all our emissions, as a company? So Singtel looks at it from a very holistic standpoint, and we are definitely committed to delivering the 2045 net zero target. In fact, I'm tracking closely to the interim target of 2030.
Lee Da Wei
What is some career advice or leadership qualities that you think that the next generation should actually have?
Yuen Kuan Moon
You need good talent and good people to grow with the organization. So, you need very broad base leaders to execute to the plan. So, what is very critical is the development of this talent and also attracting new talent to join us to complement the people that we have today.
This is very critical as businesses transform. As businesses faced with disruption and challenges, all the more you need people who are always learning and people who have the right focus on the business, on your customer. And I think if you invest in this area—developing your own talent—this is where you will have the best chance of beating the market, beating your competition, and outperforming the market.
Lee Da Wei
It's been a great pleasure speaking with you, Moon. Thank you so much for your insights.
Yuen Kuan Moon
Thank you.
