Welcome again, everyone to a special Towkay Talk this week.
Towkay Talk is a deep-dive into the intangibles of a company (aside from their reports and statistics) by talking to the key people behind the scenes.
The ones that run the day-to-day of the companies, and knows the ins and outs and this week, we want to do a spotlight on Singtel.
Singtel is a telecommunications company, providing services to consumers and businesses in Singapore, Australia and internationally.
At the centre of this Towkay Talk is its CFO, Arthur Lang.
Arthur joined Singtel in January 2017 as CEO, International. Before joining Singtel, he was Group CFO of CapitaLand, where he also ran CapitaLand’s real estate investment management business. He was awarded the Best CFO (Large Cap) at the 2015 Singapore Corporate Awards. Prior to CapitaLand, Arthur was at Morgan Stanley where he was Co-head of the Southeast Asia investment banking division and Chief Operating Officer of the Asia Pacific investment banking division.
Let’s check in to see what’s going on!
Q1: Congratulations on the achievements of Singtel28. The company has successfully increased its underlying return on invested capital (ROIC) from 9.1% in 2024 to 11.1% in 2026. Can you share more about the main drivers of the improved underlying ROIC from a segmental point of view?
Singtel Group’s ROIC hit 11.1% in FY2026, meeting the low double-digit underlying* ROIC target set in FY2023. The improvement was supported by stronger earnings from our operating companies Optus, NCS and Digital InfraCo, as well as higher contributions from our regional associates, particularly Airtel in India and AIS in Thailand.
Optus benefited from mobile service revenue growth and network sharing revenues, while NCS saw improved delivery margins with sustained revenue momentum across all business segments. Digital InfraCo also continued to scale, supported by improved capacity utilisation, and the launch of Nxera’s 58MW DC Tuas data centre in Singapore, as well as the commercialisation of its sovereign AI cloud platform, RE:AI.
At the same time, we remained disciplined on capital deployment and continued to recycle capital from noncore assets. This helped improve capital efficiency while giving us the flexibility to fund growth areas such as digital infrastructure, AI and data centres.
*Excluding Optus goodwill and exceptional items.
Q2: Singtel is acquiring ST Telemedia Global Data Centres (STT GDC), and the deal is expected to be completed by 2H 2026, with a total design capacity of 2.8 GW when combined with Nxera. How is this going to boost Digital InfraCo segment’s revenue and EBIT?
Our acquisition of STT GDC with KKR significantly accelerates our digital infrastructure growth engine as part of our Singtel28 growth plan. This strategic investment will transform Singtel’s digital infrastructure franchise, elevating Singtel into one of the strongest global players in the high-growth data centre space.
As Singtel Group will hold a 25% stake in STT GDC, when the transaction is completed, the investment will be equity-accounted, with no consolidation of STT GDC’s results in Singtel Group’s financials. This means minimal impact to the Group’s balance sheet, allowing us to maintain balance sheet strength and strong credit ratings.
Our dividend policy of paying out between 70% and 90% of underlying net profit remains intact, along with our commitment to grow dividends on a sustainable basis.
While Nxera and STT GDC will be operated independently, we expect their differentiated footprints and business models to unlock greater growth and value.