StarHub not interested in buying M1

But StarHub's key shareholder has the final say.

A lot was thinking whether StarHub has any intention to acquire M1, as the smallest telco's three biggest shareholders are reviewing their stakes. But according to Maybank KimEng, StarHub's management was steadfast in its position not to acquire or merge with the other telco.

However, Starhub said its key shareholder, ST Telemedia, which owns 56% of its shares, will ultimately decide, given Temasek’s influence over both StarHub and M1.

"ST Telemedia is wholly-owned by Temasek, which is also a major shareholder of M1’s shareholders Keppel T&T and SPH. These two companies hold a combined 32.4% of M1 while Axiata owns 28.3%," Maybank KimEng said.

For its part, StarHub’s management prefers to collaborate with M1. It has already started to explore capex reduction through network sharing with M1, which could start to see cost savings within the next two years.

"Telcos invest in infrastructure to create barriers of entry, but if there is no need to duplicate certain parts of it, then there is scope for cost savings. M1 and StarHub use the same network equipment suppliers, Huawei and Nokia," Maybank KimEng noted.

Meanwhile, StarHub stated that should another telco acquire M1, they may have to give up certain spectrum as the regulator will not permit hoarding of unused spectrum. This could mean that if TPG was to acquire M1, it will likely have to give up the 60MHz of spectrum that it recently paid $105m for.