Singapore Telecommunications Limited (SingTel) on reported a 10 percent decline in third quarter on higher customer acquisition costs and weaker contribution from India.

“Strong gain in mobile customers in Singapore during the quarter led to higher acquisition and retention costs, while contributions from the regional mobile associates declined due to their weaker currencies and 3G losses from Bharti India. In addition, the Group recorded higher net finance expense, reflecting its financing strategy of extending debt maturity with long-term borrowings, and higher taxes from Bharti. Consequently, net profit declined 10 per cent to S$902 million”, the company said in a statement.

The regional mobile associates had another quarter of strong customer growth and in some key markets, competition eased and mobile tariffs improved. In Singapore Dollar terms, pre-tax earnings of the regional mobile associates fell 8 per cent to S$449 million, and in constant currency, it would have declined 3 per cent.

“This quarter, the Group recorded healthy growth with Singapore and Australia continuing to add mobile customers. Across their markets, our regional mobile associates have executed well against competition”,  said Ms Chua Sock Koong, SingTel Group CEO.

“The Group remains financially sound, with strong cash flow generation, and solid underlying performances from our businesses in Singapore, Australia and the regional mobile associates. We continue to invest in innovation to enhance our multimedia and ICT capabilities as we progress in our transformation beyond a traditional telco.”

The Group continued to generate strong free cash flows across its businesses. For the nine months ended December 2011, overall free cash flows of S$2.46 billion were lower by 14 per cent largely due to AIS’ special dividends received last year. Free cash flow from Australia fell 2 per cent to S$958 million because of tax payments from this year. Free cash flow from the Singapore business was lower due to higher capital expenditure for major customer contracts as well as tax refund received in the prior year.