The market is now crowded with four telcos, Singapore Telecommunications (SGX:Z74
) (Singtel), StarHub (SGX:CC3) , M1 and Simba Telecom as well as a dozen mobile virtual network operators (MVNO) ranging from MyRepublic to Circles.Life to even Changi Mobile, part of the consumer services unit of Changi Airport Group. The MVNOs included sub-brands created by existing players to go head-on with potential competitors or reach out to previously neglected market segments. For example, Singtel introduced Gomo and StarHub launched Giga! All in all, these operators are going after a market of 6 million people, where, based on a total of 9.2 million mobile subscriptions as of February, the only way to grow the business is to have each subscriber carry more than one mobile line.
Talks about mergers and consolidations have been swirling around. What are the possible scenarios and is there a case for pursuing the move?
Over two decades ago, consolidation in Singapore’s banking industry strengthened the remaining three local banks, enabling them to compete with larger foreign banks. Industry talk suggests that the local telecom sector will soon undergo a similar consolidation, potentially renewing investor interest and improving consumer offerings.
