Analysts are betting on TPG as fourth telco

TPG could outbid MyRepublic in terms of balance sheet strength.

Infocomm Media Development Authority (IMDA) announced that it has prequalified MyRepublic and TPG Telecom to participate in the New Entrant Spectrum Auction (NESA), while airYotta did not make the cut.

Between the two, CIMB notes that while it is difficult to predict who will eventually emerge as the winner in NESA, as this also depends on the value ascribed to the licence by the respective players, TPG may be able to outbid MyRepublic purely from a balance sheet strength perspective.

RHB also thinks TPG stands an equal chance to wrestle the combined 60MHz of spectrum (900MHz and 2300MHz TDD-LTE spectrum) given its commendable track record as a telco/broadband service provider in Australia with a good financial standing.

The research house however warns that while competition is expected to ratchet up with the new 4G mobile licensee, there remain challenges in meeting the strict quality of standards (QOS) and coverage requirements as mandated by the IMDA (nationwide coverage by Oct 2018 in the absence of domestic roaming).

"The incumbent operators have a distinct advantage in their superior network, bundled value propositions and contract/subsidised mobile plans. M1 remains the most vulnerable to the threat of fresh competition given its pure play mobile exposure while SingTel would be the least impacted," it said.