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Will Singapore Telecommunications Limited Be Affected By A Fourth Telco?

Recent news that a fourth telecom provider might enter the local market has unsettled Singapore-listed telecommunication companies.

So how might Singapore Telecommunications Limited (SGX: Z74) or ‘Singtel’ be affected?

Singtel is Singapore’s largest telecom company with a market capitalization of S$63.8 billion. The other two quoted telecom companies are StarHub Ltd (SGX: CC3) and M1 Ltd (SGX: B2F) with market values of S$5.96 billion and S$2.36 billion, respectively.

From a market capitalization perspective, Singtel is almost 10.5 times bigger than its closest competitor.

Singtel’s consumer segment provides many essentials services such as broadband services, pay TV and mobile to name three. It does this in six countries, which gives it an advantage through a wide geographical reach.

Its overseas operations include investments in Australia (Optus), Thailand (AIS), India (Airtel), Philippines (Globe Telecom) and Indonesia (Telkomsel).

Singtel also has Enterprise and Digital Life segments. These include its other interests such as inSing.com, which is a lifestyle web portal, with over 100,000 listing. Additionally, it has a venture capital arm that focuses on technologies and solutions to enhance customer experiences.

Singtel also provides cyber security services through Trustwave and data analytics through Amobee.

For the last financial year, nearly three-quarters of Singtel’s revenue was generated from overseas markets. Similarly, 74% of operating earnings was contributed by operations outside of Singapore. A breakdown of this contribution is as follows, Optus (26%) and rest of the regional associates (50%).

With its wide range of services and geographical reach it seems that Singtel could be one of the least affected, if a new player should enter the market.

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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 Esjay does not own shares in Singapore Telecommunication Ltd, StarHub Ltd and M1 Ltd.