Chart of the Day: See how TPG's entry could impact incumbents' mobile service revenue

Singtel could be an outlier as its EBITDA could expand through higher associate earnings and lower group digital life losses.

This chart from CGS-CIMB shows that incumbent telco players in Singapore may see declining average revenue per users excluding roaming by 8 to 6% in the FY19/20F before stabilising in FY21F. This is based on the firm’s assumption that a 10% negative impact will come from TPG’s entry in Singapore.

“Based on our estimates, overall FY19/20F Singapore service revenue would be largely steady at 0.1%/0.7% YoY due to growth in enterprise fixed revenue,” the research firm noted. “Whilst the growth in enterprise fixed revenue would help to cushion the drop in mobile service revenue, we note that the enterprise fixed business generally earns a lower EBITDA margin (mid-teens vs. mobile services’ 35-40%).”

Also read: TPG to lure Singapore users through aggressive promotions: analyst

For Singapore telcos, CGS-CIMB thinks that the industry’s EBITDA will fall by 5.4 to 4.17% in FY19/20F. Meanwhile, they are positive that Singtel will see its EBITDA to expand by 5 to 5.3% YoY in FY20/21 amidst higher associate earnings and lower group digital life losses which would more than offset lower Singapore EBITDA.

“At the core net profit level, we expect Singapore earnings of the incumbents to fall by 10.4%/11.5% in FY19/20F, further chipped off by amortisation of 700MHz and the interest cost on debt to pay for the spectrum (assuming payment in mid2019 and licence starts in Jan 2020),” the firm explained.

Join Singapore Business Review community
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

Top News

Strides Premier enhances routing with Autofleet tech
The Singaporean taxi operator will utilise Autofleet’s platform to improve route planning and dispatching.
RGE and Singapore Fashion Council launch ‘Responsible Fashion Scholarship’
It is open for Singaporean citizens or permanent residents in full-time undergraduate or postgraduate programs at recognized institutions.
HR & Education