Find out how a fourth telco can wreak havoc on Singapore's saturated mobile market

The IDA will reveal its decision early this year.

A potential new entrant in Singapore’s saturated telecommunications sector can still cause considerable profit disruption for the country’s three big telcos.

Analysts warn that the threat of a new telco has not yet passed for SingTel, Starhub, and M1, with the Infocomm Development Authority yet to release its decision on the potential entry of a fourth provider.

“We believe Infocomm Development Authority (iDA) is committed to its goal of enhancing competition and service innovation. As such, we expect iDA to conduct a separate auction to allocate the 60MHz of spectrum in the 900MHz frequency band, which is currently utilised by the three incumbent mobile operators and expires in Mar 17,” wrote UOB Kay Hian analyst Jonathan Koh.

Meanwhile, BNP Paribas analyst Wei Shi Wu warned that a potentially price-disruptive new entrant would be negative for the Singapore telco once all regulatory hurdles are cleared.

“The recurring theme among the potential new entrants seems to be the emphasis on a low-cost structure, enabled by proprietary infrastructure/software development. In our view, this would potentially allow the new entrant to be price disruptive,” she noted.