Infrastructure sharing to reduce StarHub and M1's capex

The scheme could reduce their overall capex.

StarHub and M1 are joining forces as they battle head-to-head with two other telcos, one of which just recently entered the battlefield.

According to DBS Vickers Securities, StarHub and M1 signed an MOU to study potential further collaboration in mobile infrastructure sharing, with a focus on sharing radio access network, backhaul and access assets.

"The telcos have been sharing mobile infrastructure including the combined antenna systems, in-building fibre and tunnel cables. The new MOU will focus on sharing mobile network radio elements while keeping mobile core networks separate," it said.

With the scheme, the firm added that the two could eliminate significant amounts of equipment and installation cost duplication, reducing overall capex, while achieving similar levels of coverage and capacity for multiple service providers.

"In addition, overall running costs of the networks can be reduced by removing certain operational costs relating to staff, maintenance, security, etc.," DBS said.  

It furthered, "According to Groupe Spéciale Mobile Association (GSMA) sharing part, or all, of the radio access network (RAN) could result in up to 20% increase in free cashflows for a typical European operator. Similarly, according to TMG, a consultancy specialising in telecommunications, RAN sharing can save 30– 40% in costs. Given the considerable synergies, especially in capital expenditure, we believe network capex of M1 and
StarHub will each reduce by 20% post FY18, as network sharing takes hold."