Which is the Best Singapore Telco Stock to Buy? – Part 2

Welcome to the second part of the series on the competitive dynamics in Singapore’s mobile space between the three telcos here, which are namely Singapore Telecommunications Limited (SGX: Z74), M1 Limited (SGX: B2F), and StarHub Ltd (SGX: CC3).

As a quick recap of the first part of this series, I had compared different aspects of the postpaid customer base of the three telcos. In the second part here, let’s move on to the prepaid mobile segment for the trio.

The prepaid user wars

Again, I have summarized the number of prepaid 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.

Prepaid Telco Singapore

Source: Company’s Presentations

From the graph, we can see that Singtel’s dominance extends beyond the postpaid segment – it’s the same in the prepaid space as well.

This time around, Singtel looks even better, having posted a gain of 40,000 new customers over the 15 month period we’re looking at. Meanwhile, Starhub and M1 had both suffered a loss of pre-paid customers over the same period. Both companies – Starhub and M1 – had cited government restrictions on the number of SIMs per person as the reason behind this fall.

As mentioned in the first part of this series, the prepaid segment has a lower average revenue per user (ARPU) compared to the postpaid segment. For the period stretching from January to March 2015, Starhub and M1 reported an ARPU of $18 and $15.1 respectively for prepaid customers.

Bringing it together

In all, it is worth mentioning that the Singapore mobile scene plays a different role within each of the three telcos.

For instance, in the latest quarter, the Singapore mobile segment only made up about 12% of Singtel’s quarterly revenue. In contrast, the selfsame segment accounted for 49.4% and 56.6% of Starhub’s and M1’s latest quarterly revenue. As you can see, the mobile segment plays a more critical role for Starhub and M1.

The above is a first look at one of the key areas of competition for the big three telcos in Singapore. With the information shared, Foolish investors may be in a better position to choose the best of the bunch in the Singapore telco 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 Chin Hui Leong doesn’t own shares in any companies mentioned.