Talk is cheap: Why mobile virtual network operators can’t defeat telcos in Singapore

The telcos will continue to reign supreme.

Subscribers looking forward to the entry of mobile virtual network operators (MVNOs) are bound to be disappointed. In a recent report, Macquarie noted that MVNOs are unlikely to dent the telcos’ solid hold in the mobile space.

“The Infocomm Development Authority’s (IDA) paper on the introduction of MVNOs to Singapore has drawn lots of press but we believe the risks to the industry are limited unless the IDA sets price points too low,” stated Macquarie.

“History has shown that MVNOs rarely succeed, due to the huge branding costs and limited market acceptance. They can have short-term impacts on incumbents via low pricing, but issues around quality and branding typically lead to lack of scale which ultimately leads to these entities shutting down,” the report added.