SINGTEL reported a 12-per-cent fall in quarterly profit and predicted lower full-year contributions from its regional associates due to a stronger domestic currency.

The telco also said it has put a freeze on hiring to manage costs, but it is still eyeing China and Vietnam for growth through acquisitions of strategic assets.

Profits were hit by subsidies for its launch of Apple's 3G iPhone, and a stronger Singapore dollar versus regional currencies.

SingTel derives about three quarters of its sales and two thirds of pre-tax earnings from operations outside Singapore.

It said group operating revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) would also be hurt by the fall in the Australian dollar. SingTel owns Optus, Australia's second-largestmobile operator.

Said SingTel chief executive Chua Sock Koong: 'The current global financial crisis is unprecedented and the negative impact on businesses will be inevitable.

'We have implemented a hiring freeze and we're looking at discretionary expense items, how they can be better managed.' She added that staff cuts would be a last resort.

DMG & Partners analyst Terence Wong said SingTel's earnings had been hit by lower contributions from Indonesia's Telkomsel and losses from Pakistan's Warid Telecom.

'We expect further profit declines over the next few quarters - the outlook is not good,' Mr Wong said.

SingTel shares rose 1.3 per cent to $2.38 at the close of trading yesterday. The stock recovered from a near-five-year low last month, but is still down 40 per cent this year.

July-September attributable net profit fell to $868 million, from $988 million last year. Underlying net profit before goodwill and exceptionals was $801 million, also down 12 per cent from $914 million a year ago.

The results came a day after Vodafone cut its full-year revenue outlook and said it would boost cash flow by cutting £1 billion (S$2.2 billion) in costs.

SingTel, facing a domestic market of just 4.6 million people where virtually everyone has a mobile phone, has spent $18 billion in recent years buying stakes in mobile operators in high-growth Asian countries such as India and in the bigger Australian market.

Last week, SingTel warned that the stronger Singapore dollar would reduce earnings contributions from its overseas operations, while its Indonesian associate Telkomsel has forecast slower operating-revenue growth and a margin decline.

It also said higher subscriber- acquisition costs from the iPhone launch shaved EBITDA by $27 million and A$44 million (S$43.3 million) for Singapore and Australia, respectively.

In Australia, Optus reported a 1.8-per-cent rise in net profit to A$125 million. - REUTERS