On 14 Dec 2016, Singapore’s Infocomm Media Development Authority (IMDA) announced that Australia’s second largest telco TPG Telecom has clinched the nation’s fourth telco licence, after beating homegrown company MyRepublic with a bid of SGD105 million to secure the spectrum rights.
TPG expects to launch its mobile services in early 2018 and establish a mobile network with nationwide coverage by Sep same year. It also expects to capture a market share of 5% to 6% within a short period of time.
As a fast growing company known for providing very competitive service offerings, TPG is likely to compete not only on innovation, fuller packages, but also on prices. The three incumbents, SingTel, StarHub and M1, are likely to follow suit in order to defend their market shares.
The three listed telcos are likely to suffer in face of fiercer competition, resulting in our cautious view on the Singapore telco sector. Among the incumbents, we prefer SingTel as it is least reliant on Singapore for revenue (only 24% of its enlarged revenue is derived from Singapore operations). On the other hand, M1 is likely to be most impacted as approximately 84% of its revenue comes from mobile services and handset sales.
However, not everyone loses in this market development. Mobile subscribers stand to gain the most, benefiting from more generous and cheaper mobile plans. So if you are looking to get a new mobile line or renew your plan in the coming year, do take your time as it may possibly be one of the best time to do so!