Singtel’s NCS expands in the Philippines through a joint venture for clients to better access services

[SINGAPORE] NCS, Singtel’s technology services arm, is expanding its presence in the Asia-Pacific (Apac) region through a joint venture with Globe Telecom in the Philippines.

The tech company announced on Thursday (Mar 27) that its wholly owned subsidiary NCSI Holdings has acquired a majority stake in Globe’s IT arm Yondu in the Philippines. The move will give clients better access to digital, cloud, data and artificial intelligence services, it said in a statement.

NCSI Holdings will acquire a 51 per cent stake in Yondu for a total net consideration of 134 million Philippine pesos (S$3 million) – net of the 818 million pesos used by Yondu to acquire the existing NCS subsidiary, NCSI Philippines.

This will bring the post-transaction enterprise value to around 1.9 billion pesos. The new entity will be renamed NCS Philippines.

Ng Kuo Pin, NCS’ chief executive officer, said: “Globe and Yondu’s deep country expertise, coupled with NCS’ technology capabilities, will increase our capacity to further drive business transformation and innovation, especially in the telecommunications sector.”

Through the joint venture, NCS’ local workforce in the Philippines will be boosted from 150 to more than 1,200 professionals, and will improve its global delivery network – combining NCS’ delivery capability and capacity with Yondu’s resources and skills.

This partnership will “unlock new global opportunities”, said Globe’s president and CEO Ernest Cu, and enable Yondu to expand its reach worldwide and deliver more impactful IT solutions.

In an interview with The Business Times, NCS’ Telco+ managing partner, Tom Loozen, said that the joint venture will help them become relevant in “more geographies”, scale operations across the region with a growing workforce of over 13,000, and enhance the services provided to Singtel and Optus.

Loozen added that NCS chose to expand in the Philippines due to the country’s strong demand for digital services – in cloud, data, and AI.

Beyond market demand, the tech company also highlighted promising growth projections. According to a report by the International Data Corporation, the Philippines’ IT services market is expected to grow at a compound annual growth rate (CAGR) of 8.7 per cent from 2024 to 2028, outpacing the broader Apac region’s forecasted 6.2 per cent growth over the same period.

Additionally, the partnership was a natural fit due to the complementary expertise of both companies, said Jimmy Ong, NCS’ senior partner and global services lead.

He added that as key players in the telecommunications sector, NCS and Globe bring together aligned skill sets that will enhance technological capabilities, streamline service delivery, and drive industry innovation.

NCS’ expansion into the Philippines was a “good move”, said Carmen Lee, OCBC’s head of investment research. She also expects to see more companies following suit, given its long-term growth potential in AI, which will make it an increasingly important market.

The joint venture is expected to enhance efficiencies for NCS and create new growth opportunities in the region, according to Foo Zhi Wei, a research analyst at Macquarie Capital.

Foo added that this expansion aligns with Singtel’s strategy to strengthen its global delivery network and establish itself as a leading Pan-Asia technology services provider.

This initiative is part of Singtel’s ST28 strategy, announced last May, which aims to improve financial performance and optimise capital management. As part of the plan, the telco is scaling up NCS’ global delivery network and investing in AI-driven solutions to better serve its clients.