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Singapore Telcos’ Mobile Revenue Declines as the Fourth Telco Looms

Originally, there were three parties vying to be Singapore’s fourth telco, namely MyRepublic, TPG Telecom and airYotta. Last Wednesday, airYotta had to drop out from the race as it did not meet the Infocomm Media Development Authority’s (IMDA) criteria. This leaves MyRepublic and TPG Telecom in the hunt.

However, Singapore’s incumbent telcos experiencing revenue declines in its mobile business even before the fourth telco even hits the Garden City’s shores. Here’s a look at what is happening to the average revenue per user (ARPU) for the three companies in the latest quarter.

Going down

In StarHub Ltd ’s (SGX: CC3) third quarter , the telco’s mobile segment sales slipped 3.6% year on year. To be sure, StarHub did gain 53,000 post-paid customers and 45,000 pre-paid customers compared to a year ago.

So, what happened?

2016-11-18-starhub-arpu

Source: StarHub’s earnings presentation

As it turns out, Mobile pre-paid’s average revenue per user (ARPU) was $16 in the latest quarter, down from $18 recorded a year ago. Post-paid ARPU was also down from $71 to $69 during the same time frame. During its earnings briefing, StarHub said that the decline was due to lower usage of roaming and IDD calls.  

StarHub ended the quarter with 1.37 million post-paid customers and 902,000 pre-paid customers.

Also down

StarHub isn’t alone here. M1 Ltd ’s (SGX: B2F) mobile segment also reported a 6.1% year on year decline for post-paid sales and 10.4% decline for pre-paid sales. Interestingly, M1 also reported 52,000 new subscribers for post-paid and 51,000 new subscribers for pre-paid over the past year.

2016-11-18-m1-arpu

M1’s earnings presentation

The graph above shows the post-paid ARPU. M1’s post-paid ARPU was $56.5 in the latest quarter, down from $61.2 a year ago. On the pre-paid side, ARPU was down from $14.6 to $12 over the past year.   

So, both StarHub and M1 are generating fewer sales from each customer. M1 ended the quarter with 1.23 million post-paid customers and 762,000 pre-paid customers. M1 is behind StarHub in mobile subscriber count, but not by much.

Down, down, down

Mobile revenue from Singapore was also down, 2.1% lower year on year for Singapore Telecommunications Limited (SGX: Z74).

However, there were some notable differences to StarHub and M1. For one, Singtel lost 22,000 post-paid customers over the past year. But Singtel gained around 43,000 pre-paid customers during the same time. Singtel’s pre-paid ARPU was $19, up from the $18 recorded a year ago. Like its peers, post-paid ARPU was down 5.5% to $69.

Singtel ended the quarter with 2.34 million post-paid customers and 1.77 million pre-paid customers. It remains the largest player among the three.

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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.