Will MyRepublic succeed as Singapore’s fourth telco?

The odds may not be in the challenger’s favor.

Competition in Singapore’s saturated mobile market is about to heat up further with the potential entry of a fourth telco operator here.

MyRepublic, a local fibre broadband operator, has set it sights on being the country’s fourth telco operator. However, the firm is struggling to get past several stumbling blocks which are hindering its path to success.

According to OCBC, MyRepublic is struggling with regulatory constraints, high initial cost outlay, and the expected resistance from the existing three telcos.

“However, MR admits that the journey is not going to be easy, noting that a lot of assumptions would have to fall in its favour. Two of these assumptions include having a separate bidding exercise for spectrum for new entrants and having a National Roaming Agreement in place," OCBC stated. 

The report further added that “While the IDA has always been keen to have more competition in the mobile space, past efforts were unsuccessful due to the high cost of setting up new networks and buying mobile spectrum. It remains to be seen how the IDA would "allocate" spectrum in the future with regards to the potential new entrant/s. We understand that the IDA would decide on the mechanics of the auction early next year."

Should the odds fall in MyRepublic’s favor, challenges remain for the fledgling telco operator. OCBC notes that it will take some time before MyRepublic is able to clinch around 10-15% of the overall market with its unlimited data plans.

Apart from the need to convince customers that it can provide reliable service at reasonable speeds, MyRepublic will also have to deal with customers who are likely to be ‘bandwidth hoggers’. 

These customers will sap resources and will not provide MyRepublic much-needed revenue uplifts. 

“Last but not least, the incumbents could also have come up with counter measures over the time that MR needs to get its mobile business going. Nevertheless, the threat of a new entrant could potentially put a crimp on how much the incumbents can monetize data over the longer term. And we believe that M1, currently with the smallest market share, could be most at risk from the emergence of a new entrant,” stated OCBC.