They may offer a bundle for mobile services with its existing fibre solutions at a competitive price.
BMI Research said that Singapore's telcos should brace for a hotter price war after MyRepublic enters the market in mid-2018.
MyRepublic will establish Singapore's second mobile virtual network operator (MVNO) to augment its existing broadband markets with mobile markets. It also plans to have an initial public offering (IPO) by mid-2019.
"While we believe that Singapore does not require a fourth telco (TPG will introduce services in end- 2018), MyRepublic's entrance as a virtual player will further add value and more competition to an already saturated market, while maintaining the company's low-cost, online only structure and low capital expenditure," the group said.
Mobile postpaid average revenue per user (ARPU) has been falling since the arrival of the first MVNO Circles.Life (Circles), but its current market share is still small.
The market is still limited to the young and tech-savvy that want a mobile package with a lot of data. However, it is a growing segment of the market.
"We expect MyRepublic will compete on price, and bundle mobile services with its existing fibre solutions to make the entire product offering more appealing," BMI Research added.
Offering discounts to existing broadband customers to take up mobile services can also be done, but MyRepublic is not expected to make much impact in the enterprise segment due to Singtel's dominance.
Here's more from BMI Research:
Reliance on a multi-play strategy will also not be sufficient in the long-term. While we expect MyRepublic's market share to grow at a faster rate than Circles as it leverages its existing 70,000-strong broadband subscriber base, further growth will only come with the introduction of more value-added services.
Partnerships with over-the-top (OTT) service providers are to be expected at some point-in-time. Circles, for instance, has a partnership with WhatsApp to offer its subscribers unlimited messaging and calls over the app, and we anticipate MyRepublic to follow suit. Internet of Things (IoT) solutions, an area where Singapore aims to be the regional leader, is another key area that MyRepublic could target.
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