The Simba-M1 consolidation will scale Simba to be on par with StarHub, reducing the incentive to keep undercutting rivals. “Scale reduces incentive to price compete as it serves to weigh down on a company’s overall revenue momentum. The logical move based on game theory is to take a more cooperative stance on price competition,” Pineda wrote in his Aug 11 note.
Analysts believe Simba’s acquisition of M1 would positively impact local telco competition as it could help ease price competition.
Citi Research analyst Arthur Pineda says Simba, which had relied heavily on discounting to win market share, struggled to make significant inroads as incumbents cut prices and opened the door to mobile virtual network operators (MVNOs) to defend their turf.
