Probability of new telco grows dimmer amid mounting funding, growth problems

Incumbents are aggressively defending their subscriber bases.

The possibility for a new mobile tenant grows dimmer by the day, as analysts say that the new player will have to grapple with funding and growth issues.

According to a report by DBS, interested players face difficulty in raising sufficient funds.

Further, a flurry of headwinds await new entrants. For starters, new players will have to grapple with the lack of a domestic roaming agreement in Singapore, as DBS asserts it is not “aware of any success story globally without roaming in place.”

In addition, incumbents have shown their willingness to defend their subscriber bases—even at the cost of future probability—by sharply slashing data prices.

Lastly, telco hopefuls would have to face the potential launch of 5G in four to five years, as this would lead to another round of capex and make balance sheet strength even more critical.

DBS asserts, though, that the timeline for the spectrum auction has been forwarded to the last quarter of 2016, from 3Q16 earlier.