It could be pushed to 20% in the next five years.
Average revenue per user (ARPU) in the mobile segment is expected to fall by 14% to 20% in the next five years, OCBC Investment Research said.
According to a review, competition within Singapore mobile segment could intensify with the pending entry of Australian telco TPG and the campaign by Circles.Life, a mobile virtual network operator (MVNO).
Local fibre broadband operator MyRepublic is also likely to launch mobile services in Singapore by Oct 17, which offers generous mobile data.
This competition has been evident when Starhub and M1 recently launched aggressive campaigns targeted at data-hungry customers by offering plans with unlimited data allowances.
"In our view, both telcos are likely taking actions to try to gain or at least retain their market (i.e. to lock-in as many new customers on new contracts as possible) before more players enter the space," OCBC Research Team said.
Moreover, 55% of Starhub and 88% of M1's H1 revenues are derived from Singapore's mobile segment.
The competition has more impact on the two telcos over Singtel, with the mobile segment consisting only 4% of its total revenue.
Here's more from OCBC:
Singtel’s 1QFY18 core NPAT fell 3.5% to S$910m, largely impacted by aggressive competition by new entrant in India but offset by higher contribution from its Indonesia associate, Telkomsel. However, EBITDA improved 2.7% YoY to S$1.3b on the back of stronger Australia contributions but offset by weaker Singapore consumer performance.
Starhub’s 1H17 EBITDA slipped 9.2% YoY to S$341.0m as revenue growth from enterprise fixed and sales of equipment were offset by mobile, pay TV and broadband segments, as well as lower NBN grant.
For M1, 1H17 EBITDA declined 7.8% YoY to S$152.4m, mainly due to weaker mobile revenue and higher operating expenses due to higher handset sales and higher fixed services revenue.
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