Singtel, StarHub shares fall after announcement of Keppel’s M1 sale
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Keppel announced on Aug 11 it will sell M1, Singapore’s third-largest telco business, to rival Simba Telecom.
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SINGAPORE – Shares of Singtel and StarHub fell on Aug 11, following the announcement by Keppel that it will sell M1, Singapore’s third-largest telco business,
Singtel slid 1.3 per cent, or five cents, to $3.93 with 18.2 million shares traded. StarHub tumbled 4.9 per cent, or six cents, to $1.16 as 9.1 million shares changed hands.
Shares of Keppel were halted from trading before the market opened on Aug 11. They had last closed down 0.8 per cent at $8.58 on Aug 8.
Tuas Limited, the Australia-listed parent company of Simba, also halted trading on the Australian stock exchange on Aug 11.
The drop in StarHub and Singtel share prices can be attributed to the unexpected acquirer of M1, said CGS International Securities Malaysia.
“While the M1 stake sale was widely expected by the market, the consensus view was that it would be partnered with StarHub. The emergence of Simba as the acquirer was a surprise and added uncertainty to future sector dynamics,” the research house said.
It added that while the consolidation of four mobile network operators to three should be seen as positive for longer-term competitive dynamics, Simba’s longer-term plans remain unclear, raising the risk of a stronger telco that could lead to more intense competition.
Along the same lines, Mr Nicholas Yon, equity research manager at Lim and Tan Securities, said: “By acquiring M1, Simba has the potential to generate synergies and become a larger operation that could further threaten Singtel’s and StarHub’s grip on the Singapore telco industry.”
He added that Simba’s advantage over the other two telcos could be greater cost-savings and potentially lower-priced mobile plans, which would certainly hurt their market share.
Mr Hussaini Saifee, equity research analyst at Maybank Singapore, believes, however, that the consolidation of the major telco operators could lead to mobile virtual network operators (MVNOs) raising their pricing as competition subsides.
The Singapore market is currently very crowded with the presence of four facility-based operators and seven MVNOs, said Mr Saifee. As a result, the industry has been undergoing intensive competition, with prices as low as $8 for 200GB to 300GB of data, he said.
“As seen in markets like Thailand, Australia, Indonesia and India, we expect competition to subside. These markets experienced elevated competition before consolidation, though not as aggressive as what we are seeing in Singapore currently.”
Mr Nirgunan Tiruchelvam, head of consumer and internet at Aletheia Capital, said M1’s sale is further proof of the inherent difficulties in Singapore’s telecoms industry.
Market conditions would benefit only a player that operates without fixed assets like the legacy telco companies do, he added.
Keppel’s sale to Simba is subject to approval by the Infocomm Media Development Authority. Keppel hopes to complete the sale, if given the nod, in the next few months.
The sale will give Keppel cash proceeds of nearly $1 billion, though it will make an estimated accounting loss of $222 million on the deal, over the target assets’ book value.
As at Aug 8, Keppel shares have climbed 25.4 per cent to date in 2025, outpacing the 11.9 per cent rise in the Straits Times Index, LSEG data showed.
