StarHub is exploring taking legal action against rival Singtel over an online smear campaign last June, which Singtel has apologised for and distanced itself from.
The controversy first became public after blogger Wendy Cheng, better known as Xiaxue, posted on her website last week that social media agency Gushcloud had instructed its bloggers to bad-mouth StarHub and M1 as part of Singtel's e-campaign.
"We have written to Singtel on this matter and are assessing our legal options," said Ms Jeannie Ong, StarHub's chief marketing officer.
The telco wants Singtel to take responsibility to ensure all false and disparaging comments created and proliferated by its staff and Gushcloud are "retracted and corrected".
"Such marketing tactics are unethical and we do not condone such negative campaigns," said Ms Ong.
On Tuesday, Singtel and Gushcloud apologised for the marketing campaign that disparaged its rivals. Singtel explained that its marketing standards that forbid negative campaigns were not followed, and that the incident was an "isolated" one.
An M1 spokesman said it had noted Singtel's apology, but "will explore further action if necessary".
Lawyers said this includes taking legal action against Singtel and Gushcloud for possible defamation.
Separately, the Infocomm Development Authority is investigating to see if its Telecom Competition Code, imposed on all licensees, was breached.
Last Saturday, Ms Cheng posted a leaked 2014 e-mail from Gushcloud to its bloggers instructing them how to create messages targeted at StarHub and M1. For instance, they were asked to "complain/lament" about the two telcos' network connections and services.
The aim was to promote a Singtel youth mobile plan, with Gushcloud's bloggers receiving up to $4,000 in cash incentives, among other benefits, for successful sign-ups.
Ms Cheng also posted on her website samples of these complaints targeted at StarHub and M1. One such complaint read: "I've really been annoyed by the terrible connection I've been getting from M1 through these years. From constantly having no connections at Zouk to having my line cut off when I'm on the line (sometimes important business talks)..."
Another sample read: "You know what? I'm finally sick and tired of StarHub's poor reception and network connections!"
Lawyers contacted said Singtel and the bloggers engaged could be liable for defamation.
Lawyer Gilbert Leong, a partner at Rodyk & Davidson, said the case could be one of "conspiracy to injure".
"However, StarHub and M1 would need to show that they sustained damage to their business as a result," said Mr Leong. "This is because the complaints may be genuine and what Singtel and Gushcloud did was to precipitate a public airing of the complaints."