Would A Fourth Telco In Singapore Be The End Of The Existing Three?


MyRepublic, a new fibre broadband provider in Singapore, is not satisfied with just being a broadband player in Singapore. It has submitted a proposal to the Infocomm Development Authority (IDA) of Singapore for consideration to become the fourth telecommunications outfit here.

Currently, Singapore’s saturated telecommunications market is made up of just three companies (ordered according to size), namely Singapore Telecommunications (SGX: Z74), Starhub (SGX: CC3) and M1 (SGX: B2F).

Interestingly, MyRepublic has no plans to become a full-fledged telecommunications company that would have its own telecommunications infrastructure. Instead, it plans to be a Mobile Virtual Network Operator (MVNO). A MVNO is an operator that buys airtime from existing telcos instead of building its own infrastructure.

MyRepublic plans to focus on the mobile data space by offering 4G plans that provide users with unlimited data usage. This might entice the newer generation of smartphone users who value mobile data usage more highly than traditional call-time and SMS services.

Given the current oligopolistic nature of the telecommunications market in Singapore (with just three players), it’s not hard to imagine a scenario whereby MyRepublic would shake up the industry if the IDA approves its proposal. However, on that front, MyRepublic’s chief executive, Malcolm Rodrigues, has stated that his company has no intention of “taking down the giants.” Instead, the company is only targeting about 10% to 15% of the 4G market.

Rodrigues is of the opinion that current 4G plans being offered by the incumbents are unattractive for consumers and the appearance of a new telco might benefit consumers by forcing the existing trio of telcos to take a harder look at their data plans and try to them improve them.

Foolish Summary

Although MyRepublic’s potential entry into the telco market might be exciting, it is not the first time a MVNO had appeared in Singapore. Back in 2001, Virgin Mobile launched Singapore’s first MVNO service through a joint venture with SingTel; it ceased operations after just one year as it failed to gain scale.

It might seem theoretically attractive for consumers to have a new player in the market. But, the actual business execution on the part of the newcomer should be really tough. In light of that, it might be premature to expect any of the trio of SingTel, Starhub, or M1 to fall anytime soon because of MyRepublic’s potential entry into the telecommunications space.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim doesn’t own shares in any companies mentioned.