Price war pushes telco revenues lower as consolidation accelerates

Tit-for-tat price aggression to continue in the second half of 2026.

Competition in Singapore's telecommunications market intensified through the second quarter of 2026, with average revenue per user rebasing further downward across the industry as customers shifted toward value brands, according to RHB.

Mobile revenue fell 11% at StarHub and 6% at Singtel. StarHub's core EBITDA declined 24% in the first half of 2026, with price aggression stepping up midway through the quarter following a temporary lull. Broadband prices across the market have converged at around SGD30 a month.

Singtel posted 10% EBIT growth in the first quarter of financial year 2027, ahead of its own guidance, as growth assets scaled and offset weaker Singapore mobile performance.

Meanwhile, newer entrant Simba faces mounting pressure from two regulatory requirements. Critical information infrastructure guidelines and a mandatory switch to 5G standalone networks by mid-2026 both demand investment, whilst the operator holds a limited 5G spectrum block of 20MHz in the 2100MHz band.

RHB said that constraint could hamper subscriber experience and impede growth, and expects a capital expenditure ramp-up if Simba is to compete with rivals holding more 5G spectrum. The operator is also under regulatory scrutiny over a spectrum violation and must invest to meet minimum critical infrastructure requirements.

The combined effect has eroded Simba's structural cost advantage, according to the firm, making its low-price, low-capex model untenable. RHB expects the harder operating environment to catalyse price rationality across the market in the medium term.

StarHub has migrated MyRepublic and redOne customers onto its own network, strengthening its multi-brand, multi-segment approach and cementing its position as the second-largest player. RHB described a merger with M1 as highly probable.

On costs, StarHub has achieved roughly 10% of a targeted SGD70m in operating expenditure savings due by financial year 2028.

Singtel's second-half earnings growth is expected to come from outside mobile, with stronger data centre contributions following improved utilisation at DC Tuas, commissioned in the first quarter of calendar 2026, alongside increased contribution from RE:AI, which has 6MW of contracted capacity on SGD600m of value, and the flow-through from price increases at Australian arm Optus.

RHB expects tit-for-tat price aggression to continue through the second half of 2026, though with a more tactical slant, and named consolidation and market repair as the key factors that could shift sector conditions.