Singapore wireless wannabe MyRepublic eyes profit in three years

[SINGAPORE] MyRepublic Ltd, bidding to become Singapore's fourth mobile-phone carrier, says its lower costs mean it can start with a small subscriber base and still be profitable within three years of winning a license.

The Internet service provider expects to get at least 250,000 customers in its first year as a carrier, should it win a spectrum auction expected later this year, Chief Executive Officer Malcolm Rodrigues said in an interview on Monday. The company intends to build that to a 9 per cent market share, or more than 700,000 users, within five years, by offering unlimited data plans, he said.

While former monopoly Singapore Telecommunications Ltd has about half of the mobile service market to itself, MyRepublic expects to have a cost advantage as a new entrant in one of Asia's most expensive wireless markets for users. Rodrigues said MyRepublic will need about S$300 million, less than a third of the conventional infrastructure cost, to build a 4G network nationwide as the company will operate from facilities already used by its Internet business.

"We'll have a much faster network than the existing players because our network will be less dense," Rodrigues said. "We don't have legacy issues, so our operating costs will be lower." MyRepublic must first have the winning bid at a spectrum auction where competition is expected to include Consistel, a wireless software provider. Singapore's government is seeking to introduce new competition to a market where mobile-phone users can pay more than twice as much for data services than subscribers in Hong Kong, South Korea and Thailand and more than triple that for Australia, India and Indonesia.

Singtel Chief Executive Officer Chua Sock Koong said last month that the entry of a new operator would drive prices lower and hurt the industry. MyRepublic's Rodrigues said his company wouldn't start a price war.

"We've never been a price disrupter and we never will be," Rodrigues said. "We'll offer customers more for the same price they pay other operators and bring back unlimited data." MyRepublic, which currently has about 50,000 fixed-line broadband users in Singapore, will meet the telecom regulator's requirement to provide nationwide coverage by October 2018, Rodrigues said. He also said he expects the auction to happen in the third quarter of this year. The company has mandated Goldman Sachs Group Inc and DBS Group Holdings Ltd to help it raise S$250 million it needs for the network, he said.

BLOOMBERG