Chart of the Day: How are the telcos doing in terms of broadband ARPUs?

They managed to add a total of 11,000 new customers between 2QCY16 and 3QCY16.

Ahead of the official entry of TPG Telecom as the fourth telco, the incumbents seem to be in good shape, at least in terms of their broadband segments.

According to OCBC Investment Research, the residential broadband market remains stable as the three telcos added a total of 11,000 new customers between 2QCY16 and 3QCY16.

"As at end-3QCY16, the total broadband subscriber base of the three telcos was 1.23m subscribers, which represent ~91.2% of the overall Singapore broadband market in 3QCY16, slightly higher than the 89.7% in 2QCY16," the brokerage firm noted.

It also pointed out that the broadband segments of M1 and StarHub were bright spots in the previous quarter, as revenue grew YoY on higher subscriber base for M1 and higher ARPU for StarHub.

"Over the past few quarters, we are also seeing stabilizing monthly broadband ARPUs across all three telcos. Currently, telcos are pushing out higher broadband speeds and M1 is charging the lowest monthly subscription fee over a 24-month contract. StarHub is also trying to differentiate by offering “dual” broadband (i.e. both fiber and cable connections), albeit at a higher price point," the brokerage firm explained.

However, it believes ARPUs growth may stagnate once most of the subscribers are on the 1Gbps plan, which is more than sufficient for most users. While some providers have started to offer 10Gbps plans at $189.00/month, OCBC does not expect this ultra-high speed broadband to become mainstream anytime soon.

"The lack of affordable consumer hardware and more importantly, lack of any applications requiring ultrahigh broadband speed do not justify mass adoption of 10Gbps plans," it stated.

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