Game face on: Singapore telco giants gear up for fiercer broadband competition

Low pricing game starts now.

Mobile subscribers might as well start grabbing popcorns and sodas as they watch telco firms intensely compete with each other for broadband subscriber market share.

According to OCBC, for 2QCY14, it was a pretty muted quarter for the telcos, with all of them reporting results that were within our expectations, despite the weaker revenues and earnings – SingTel saw a 2% YoY earnings drop while StarHub reported a 6% decline, but M1 saw a 12% jump. 

Here's more from OCBC:

Nevertheless, we had two telcos trimming their FY guidance – SingTel now expects core revenue to remain stable but cuts EBITDA growth guidance from single-digit previously to stable; StarHub now expects stable revenue versus low single-digit growth previously, but keeps 32% service EBITDA margin.

One main reason for the lower profitability is likely due to the still intense competition in the fiber broadband market, with the smaller players (including M1) using low pricing to snatch market share away from the incumbents. As such, sliding ARPUs are seen across the board in 2QCY14 and could continue to edge lower in the coming quarters.