Will MyRepublic's multi-play telco strategy give it the edge?

WHEN it comes to what observers fear is a looming price war in the crowded consumer telco market, battle lines are no longer neatly drawn between asset-heavy mobile network operators (MNOs) and their mobile virtual network operator (MVNO) clients.

And the refusal to participate in rate-slashing marks the entrance of a different breed of telco - one that wants the best of both worlds. Such a move has bucked industry predictions that MVNOs would compete on price, even as the market here added its third such operator in under a year.

The newest kid on the block - MyRepublic, a seven-year-old fibre broadband player and freshly minted MVNO - recently upped the ante with a strategy that points to chief executive Malcolm Rodrigues' decision to compete on traditional telco ground.

It has just kicked off its mobile offerings with plans starting at S$35 - higher than the lowest SIM-only monthly fees of S$20 at M1 and Singtel, and S$24 at StarHub.

This is also starkly at odds with the zero-dollar products announced by both the incoming TPG Telecom, holder of Singapore's fourth MNO licence, and MVNO rival Circles.Life.

And it is a sign that Singapore's crowded telco market will not fall comfortably into MNO and MVNO camps - even as the drums of war beat.

Mr Rodrigues, a former StarHub executive, brings to the table both his conventional industry experience and, just as crucially, the lessons from seven years of building up MyRepublic as a fibre broadband player.

He acknowledged, in a recent conversation with The Business Times, that MyRepublic's customer acquisition strategy bears some resemblance to that of his MNO host. StarHub's "Hubbing" lifestyle brand relies on bundling fibre broadband, pay-TV and consumer mobile services, alongside fixed voice lines.

"We like that strategy," Mr Rodrigues told the media, adding that "the reality is that this is what people do". Still, he has also said that he does not plan to go toe to toe with the Republic's MNO incumbents. He is banking on capturing a large enough market share within the MVNO segment.

In Case You Missed It: MyRepublic CEO lays out game plan

That is where the company's other operations will come in handy. Mr Rodrigues said MyRepublic's broadband business serves some 80,000 households in Singapore - or what he guesses are about 250,000 individuals. His closest MVNO foe, Circles.Life, has no broadband products - so, no such captive audience to tap.

Mr Rodrigues also wants to take 5 per cent of the mobile market here between 2021 and 2023, largely tracking Circles.Life's timeframe.

But it has taken Circles.Life two years to beat its way up to an estimated share of 1 per cent. MyRepublic could possibly clinch that overnight, by converting a fraction of its broadband households' members.

And, while MyRepublic has to lease network space from StarHub - perhaps a slight sting, as it was a failed spectrum auction contender for TPG's operating licence - its established broadband play gives it a headstart over the Australian entrant too.

Given its fibre-plus-mobile business model's built-in capabilities for a multi-play telco approach - especially with Mr Rodrigues' plans to give pay-television a spin - MyRepublic could reap a generous harvest. Singtel had 508,000 households signed up for three or more of its services, as at Dec 31, 2017, while StarHub had 326,000.

Such bundles are critical to keeping churn rates down - a savvy move for MyRepublic, which, like the other MVNOs here, touts no-contract exits as a benefit of its mobile products.

Growth rate

But all these visions of a rosy future as a traditional(-ish) telco player will be for naught, if MyRepublic fails to scale up the business at a comfortable clip - not so slow that growth sags, yet not so fast that expenses force Singapore operations back into the red.

As the business expands, Mr Rodrigues must also contend with winning over a consumer public made a tad jaded by MyRepublic's long runway to mobile services.

His would-be triple-play strategy is the result of a lengthy rethink, after the company lost its 2016 bid to be a network operator. It has twice delayed its mobile roll-out, and has already pushed back its planned listing deadline once so far.

In fact, as end-games go, the dream of a bourse debut might just be his The Great Gatsby-esque green light on the fragrant harbour.

Mr Rodrigues is also loath to roll out new services, such as pay-TV, until MyRepublic turns profitable and sews up its proposed initial public offering in Hong Kong - at the very latest, he has promised, by mid-2020.