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MyRepublic CEO lays out game plan
INTERNET services bundled with mobile plans, and pay-television offerings on the side. This sounds like a traditional triple-play telco model, but it is also on the horizon for MyRepublic, chief executive Malcolm Rodrigues told The Business Times.
Still, TV might have to wait. With the fibre broadband provider fresh from launching mobile services here on network leased from StarHub, his priority is to roll out the same in its other markets - Indonesia, Australia and New Zealand - in the year ahead.
He wants his seven-year-old company turning a profit - and consistently so - by the first quarter of next year, so it will not be loss-making when it goes public.
With MyRepublic counting around 80,000 households here as fibre broadband customers, Mr Rodrigues is sure the Singapore business can stay in the black in the long run.
He wants 5 per cent of the mobile market here in three to five years, and thinks he can convince more than half of his broadband customers to give mobile products a try. "StarHub is a 'Hubbing' company," he said, referring to the mainboard-listed telco's lifestyle brand. "We like that strategy."
He added: "We'll break even at less than 3 per cent of market share, but we think that we can achieve a 5 per cent market share, across the market, and that'll be profitable for us."
This roughly matches a major rival's timeframe: Circles.Life, hosted by M1, has said it should reach its goal of 3 per cent to 5 per cent market share by 2019, three years after launch.
Mr Rodrigues said MyRepublic's average revenue per user (ARPU) is more than S$50 for broadband here, with a forecast of "maybe S$30" for mobile customers. Latest full-year figures put the incumbents' post-paid mobile ARPU at S$64 for Singtel, S$68 for StarHub and S$56 for M1.
"Over time, I think our mobile revenue will be higher than our fixed revenue. Profit-wise, they'll contribute evenly." As for mobile margins: "We can make 20 per cent, 23 per cent margins, maybe more, depending on how many subscribers we get."
In the run-up to a planned initial public offering (IPO) in Hong Kong, Mr Rodrigues said MyRepublic is in talks with potential network partners in its three other markets, with leasing deals planned for the next three to four months.
Citing industry estimates that mobile virtual network operator (MVNO) players could eke out a market footprint of up to 20 per cent, he said he would be happy to lead in just the MVNO segment, and could compete with incumbents without undercutting their prices.
"As an underlying operator, where you make those capital investments, you can always be a price leader," he said. "They'll always have a bit of a competitive advantage . . . We don't want to dominate any single country or any single market. Our plan is to get that 5 per cent market share in 50 countries over time, and that, by itself, is a big, big business."
He is a long way from that, though. The more modest ambition is to raise his footprint, to between eight and 10 markets, within two years of listing. MyRepublic settled on Hong Kong as its IPO venue this month, but pushed the debut back to as late as 2020.
Still, Mr Rodrigues said IPO details such as offer price and public float size have yet to be decided. MyRepublic's key shareholders include Indonesian conglomerate Sinar Mas, Brunei telco DST Communications and French billionaire Xavier Niel.
Mr Rodrigues also told BT that private equity firm Makara Capital's S$70 million fund injection will give it a 12 per cent stake in the company.
On whether MyRepublic will give StarHub a run for its money, he said: "I think we're actually going to help StarHub's bottom line."
The former StarHub vice-president added: "We're more efficient, we're more cloud-based than them. That same bundle can be used to service other markets . . . We're not copying people. The reality is that this is what people do."