Singapore Telco shake-up: Mergers spark hope, but price war far from over

SINGAPORE: According to the latest Singapore Business Review report, the acquisition of M1 by Simba Telecom, which was announced on Aug 11, represents a significant change in the market. Although the deal is causing some optimism, mobile network operators (MNOs) seem cautious about any immediate changes in pricing strategies.

“Expectations of market price repair are, however, varied, with MNOs likely to maintain the ‘high-press’ approach to protect or grow their revenue market share in the short-to-medium term,” RHB stated.

Even after the merger, Simba is expected to stay a strong competitor. Being a smaller player, it will likely continue pushing hard on pricing to grow its market presence. This could place pressure on well-known firms such as StarHub and Singtel.

During its Q2/H1 2025 results conference, StarHub’s administration raised concerns about the repercussions of Simba’s purchase of M1, particularly about various assets associated with the Antina joint venture (JV), where StarHub and M1 had agreed beforehand to equally divide resources. StarHub noted that the acquisition leads to a “material change in ownership” that disrupts the original spirit of the JV.

At the moment, spectrum holdings among players are seen as sufficient, and no major expansions are anticipated, even with the now smaller gap between the resources of Simba-M1 and its competitors.

Looking forward, StarHub sees opportunities amid the upheaval. The company believes the Simba-M1 integration will be complicated and drawn out, providing a chance to capture more revenue market share. M1, meanwhile, is in a vulnerable position, relying heavily on a single mobile virtual network operator (MVNO) for customer access.

StarHub has amplified its asset ventures in MyRepublic (MR) by obtaining an additional 49.9% stake on Aug 12, subsequent to its early 50.1% acquisition in September 2021. This transaction increases StarHub’s access to MR’s backend systems and brand equity, which it considers tactically significant.

However, the company is getting itself equipped in preparation for some temporary financial hurdles. In light of the Simba-M1 deal, StarHub adjusted its full-year 2025 EBITDA forecast to an 8% to 12% year-on-year decline, indicating a more aggressive strategy in the second half of the year to maintain its market position.

RHB, in response, has cut its 2025–2027 core earnings forecast for StarHub by 22% to 33%. The firm commented that the cost savings expected from StarHub’s DARE+ transformation strategy have been diminished by the shift in market conditions.

Nonetheless, there is some good news. RHB mentions that StarHub is expanding its cost optimization strategy by introducing three new measures that could provide long-term benefits “three to four times larger” than current initiatives.