Will a 4th telco affect the existing three telcos in Singapore?

How will a 4th telco affect the existing three telcos in Singapore?

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A 4th telco license will be awarded to 3 bidders in one month’s time.  A lot of articles have appeared online suggesting there is a bigger impact on M1, Starhub while Singtel will be left unscathed.

In a report, ARPU for Starhub and Singtel are S$70 per cutomer while M1 is way lower. M1 doesn’t have Pay TV bundle, a heavy burden the two incumbents will have to bear as costs are not cheap for pay channels.

With OTT, there are lesser subscribers as they can source their own programmes e.g. using NETFLIX. That is to say, All four telcos have similar packages to compete. I don’t think most will be lured to sign up a phone package because it offers you cable tv which you don’t need. Thus the ARPU per customer is lowered.  The bundling deals would just be Mobile package + Fibre Broadband.

While most reports claim that Singtel will not be impacted most. They have conveniently forgotten that Singtel has arms in India and Australia. Profits are affected by foreign exchange. Starhub on the other hand may have to come up with innovative packages not everyone requires pay TV.

M1 the smallest has some innovative ideas. e.g. mySIM plan is copied by Starhub and Singtel. Lately M1 offers Eleven Sports Network Pass bundled with 1Gbps fibre at $44.90 Sports bundle.

So, if M1 is able to survive all these years with innovative plans and at a lower ARPU, more customers will shift from Singtel/Starhub to M1 and probably the 4th telco as plans for affordable plans that suit their needs.

Data/Network Coverage would also be a factor that will determine which telco the customers sign up with. A new entrant may face voice/data quality issues within the first few years. With no contract plans, customers can easily switch from one telco to another. They might give the new telco a try and if the voice quality is bad or experience bad network connectivity, they will switch back to the incumbents.

In one month’s time, we will know the results of the 4th telco bidding. Who do you think will get the license? Will there be major shake up in the industry and it’s stock price ? Discuss.