Chart of the day: Will a new telco squeeze incumbents’ revenues?

It will take up 7% of mobile revenues in 5 years.

The potential new telco in the city-state spurs more fear with Starhub and M1, two of the three telco players aside from Singtel. How badly will their revenues be affected should a new player enter the field?

According to the latest report by DBS Research, M1 will be impacted the most due to its higher exposure to mobile revenue and more price-sensitive subscriber base.

"We project M1’s mobile revenues to contract by 20% (16% drop in total revenue) in 2022 from 2015 levels. We expect M1 earnings to drop by 25% during the same timeframe," the report noted.

Meanwhile, Starhub is likely to be more resilient than M1, as only around 50% of its revenues are coming from mobile.

"As a result, we expect StarHub’s mobile revenues to decrease by 12% (6% drop in total revenue) and earnings to contract by 12% in 2022 versus 2015," DBS stated.

Nonetheless, the new telco would still have to go over hurdles, as the absence of domestic agreement is a big obstacle.