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Aggressive fourth player could capture 7% of mobile revenue share in Singapore by 2022
Check out which operator will be worst hit.
With competitive battles ahead as a new operator possibly comes into play, mobile revenue in Singapore is estimated to drop by 7% in 2022 versus 2015, said DBS Vickers Securities.
According to the research firm, both MyRepublic and TPG have a reputation of capturing subscribers through price competition, albeit in the fixed broadband segment.
"A well-funded player could capture up to 7% revenue share by 2022 on our estimates," it said in a report.
DBS Vickers Securities believes the potential entry of a new player will be most felt by M1 due to its higher exposure to mobile revenue and a more price-sensitive subscriber base.
"We project M1’s mobile revenues to contract by 24% from 2015 levels with a 31% drop in earnings by 2022," it said.
In 2Q, mobile service revenue fell 5% qo-q unexpectedly as many customers adopted cheaper upsized data plans instead of paying S$10 for each additional GB. Decline in mobile roaming and adoption of SIM only plans were other factors that led to the decline.
Accrued handset revenue decreased ~S$7m in 3Q16 versus 2Q16 due to lower iPhone sales. This resulted in S$7m adverse impact on earnings which is likely to continue as M1 still has S$67m in accrued handset revenue, said DBS Vickers Securities.
M1 downgraded its official guidance from single-digit decline in net profits to ~12% decline in FY16.
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