Chart of the Day: TPG could snap up 4% of telco revenue by 2022

The latest telco entrant may compete through aggressive pricing packages.

TPG could snap up potential telco revenue share of up to 4% by 2022 despite efforts by existing competitors to tie up with Mobile Virtual Network Operators (MVNOs) denting its entry into the Singapore telco market, according to DBS Research.

TPG has already announced plans to offer unlimited voice and 3GB of data free of charge for 24 months to senior citizens in Singapore as it is expected to deploy aggressive pricing strategies in order to snatch market share early on.

"We believe that TPG will likely adopt a similar strategy of offering free services at the initial stages of its entry in Singapore as well, possibly leading to price wars between operators," according to DBS analyst Sachin Mittal. One possible scenario envisions TPG wiping out almost a quarter of the industry topline if it mimics the approach of Reliance Jio in India and drives MVNOs compeltely out of the market, leading the mobile industry to contract at an annual rate of 6%.

Also read: 'Four is a crowd' in Singapore's telco market

However, it is not all smooth sailing for the latest entrant as it faces heated competition from incumbents who have partnered up with MVNO to take the latest entrant out of the picture. Singtel, for instance, has joined hands with two operators, taking the total number of mobile service providers in the country from three as of 2015 to seven in a span of two years.

Also read: Telco war heats up even before TPG enters fray in Q4

By partnering with MVNOs, incumbents hope to muscle TPG out of the scene in the SIM-only segments and generate wholesale revenues whilst offsetting any negative impact on low-end segments that TPG will target, added Mittal.

Compared to Singtel who is best placed to weather the storm due to overseas contributions, StarHub is most likely to emerge as the most affected in the medium term due to a contracting Pay-TV business and heavy compettiion from M1 in the broadband segment.

Also Read

Singapore emerges as world’s 2nd most expensive data centre market

SIAS urges NeraTel shareholders to reject Ennoconn Corp's mandatory offer

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit