Singtel said there will be room for consolidation.
TPG Telecom's entry into Singapore's telco fray is likely to cause the decline of mobile revenue during 2019, Singtel said. It also reiterated that it "believes that four players cannot survive independently and there will be room for consolidation in the market."
According to brokerages' accounts of Investor Day, Singtel believes that TPG will be able to launch by year-end, meeting its first phase rollout obligation (i.e. 95% street coverage).
"Compared to incumbent's street coverage (>99%) and strong in-building coverage, Singtel says subs will surely notice the network quality difference upon TPG’s service launch," added CGS-CIMB analyst Foong Choong Chen.
Moreover, according to DBS Equity Research analyst Sachin Mittal, a few more MVNOs have expressed interest in partnering with Singtel.
It also sees a rising trend for SIM only plans in Singapore, which accounts for a single-digit proportion of the subscriber base in Singapore. "Allowing subscribers to lease handsets over 12 months is the key differentiator of Singtel’s SIM only plans as opposed to offering cheaper data, which the other players have resorted to," he added.
Moreover, UOB Kay Hian analyst Jonathan Koh said, "Singtel seeks to differentiate itself beyond competing just on pricing."
He noted that it has 913,000 active users using My Singtel App to monitor usage of talk time, SMS and data, check re-contract date, get new smartphones, and subscribe to add-on services. "It also utilises its AI-powered chatbot, Shirley, for self-help and to handle customer enquiries."
OCBC Investment Research analyst Eugene Chua commented on this, "Automating certain transactions such as sales and query handling through online/mobile app platforms allows Singtel to reduce customer service headcount and improve the speed of service."
"Across both countries, Singtel do not intend to compete on pricing, but will let their MVNOs target the price-sensitive consumers," Koh added.
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