Which is the Best Singapore Telco Stock to Buy? – Part 1

When it comes to getting a mobile service in Singapore, it’s pretty straight forward.

There are only three players in the scene – namely Singapore Telecommunications Limited (SGX: ZY4),  M1 Ltd (SGX: B2F) and StarHub Ltd (SGX: CC3) – and prices and features of the different services are readily available for easy comparison.

To find the best telco stock in Singapore though would entail a different approach. It comes with understanding the different competitive strengths of each company. And to do so, I would like to compare two hotly contested areas in the mobile space in Singapore today: The postpaid and prepaid mobile scene.

The postpaid user wars

Below, I have summarized the number of postpaid users for the three telcos in comparable three-month time periods. The duration for comparison would be for the past 15 months, separated into five distinct quarters.


Source: Company’s Presentations

The immediate thing which strikes us from the graph may be the dominance of Singtel in terms of number of users. Singtel reported that it had 2.27 million postpaid mobile users in Singapore in its most recent quarter; that’s almost twice Starhub and M1’s postpaid customer base.

On the other hand, Starhub has been moving at a faster pace when it comes to adding customers over the past 15 months with 72,000 new postpaid customers having signed on for its mobile services. While Singtel came close with 70,000 new postpaid customers for itself, M1 had lagged with only 20,000 new customer adds to its postpaid space.

To be sure, gaining more customers would be useful only if they can be kept. Starhub had a churn rate – that is, the rate of customers leaving – of just 0.8% for the most recent quarter. In contrast, M1 reported a churn rate of 1%.

Finally, the postpaid segment may be important for all three telcos as the average revenue per user (ARPU) is higher compared to the prepaid segment. For the first-quarter of 2015 (the period from January to March 2015), Singtel had reported an ARPU of $73. Meanwhile, Starhub and M1 reported ARPUs of $68 and $62.40 respectively.

For the competitive dynamics on the prepaid mobile segment, check out the second part of this series.

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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 Chin Hui Leong doesn’t own shares in any companies mentioned.