What to expect as SG telecoms consolidate

Experts see varied price movements.

The mergers and acquisitions in Singapore's telecoms market are viewed favourably, though there are mixed expectations on whether market prices will rise as a result.

“Expectations of market price repair are, however, varied – with mobile network operators (MNOs) expected to sustain the ‘high-press’ approach to defend/grow revenue market share (RMS) in the short-to-medium term,” RHB said in its recent sector update.

The Simba-M1 marriage was announced on 11 August, with MNOs unsure of the timing of market price repair despite an upbeat market

“We believe Simba is likely to sustain its competitive intensity, as it remains sub-scale. At StarHub’s Q2 / H1 2025 results call, management said it reserves the rights on spectrum assigned to the Antina JV with M1, and will explore options to protect its interest,” RHB said.

The earlier joint venture with M1 entails equal pooling of spectrum resources. Simba’s acquisition of M1 reflects “a material change in ownership that would alter the spirit of the JV,” StarHub said.

The current spectrum resources are also optimal, with no reasons to add more despite the narrowing spectrum gap with Simba-M1.

StarHub sees opportunities to take further RMS as the integration will take some time to complete. M1, meanwhile, remains highly vulnerable to competition, being largely dependent on a single mobile virtual network operator.

StarHub also acquired a 49.9% stake in MyRepublic (MR) on 12 Aug. This follows the 50.1% stake acquisition in Sep 2021, citing strategic alignment, access to MR’s operational back-end assets and strong brand equity.

“Post results, StarHub cut FY 2025F EBITDA growth to a ‘8% to 12% YoY decline’ as it intends to be more aggressive in H2 2025 to defend/grow revenue market share, following the Simba-M1 deal,” RHB said.

RHB cut its forecast for fiscal year 2025 to 2027 core earnings by 22% to 33%, noting its comments that cost savings guided earlier under the DARE+ transformation have been offset by the shift in market dynamics, which implies that the earnings recovery will be pushed back.

“It will, instead, expand on cost optimisation initiatives encompassing three more levers with positive outcomes to be 3-4x larger in the long run,” RHB said.