Singtel has the edge to ride out headwinds

AS the possibility of a new entrant into the already crowded Singapore mobile phone market comes closer to reality, it raises once again the question of how this development will affect the existing three telcos. The Infocomm Development Authority of Singapore (IDA), which announced last year that it was preparing ground for a new operator, will later this year hold an auction in which it has earmarked a generous amount of spectrum for a potential new telco. Two companies - internet service provider MyRepublic and Consistel - have announced their interest in becoming Singapore's newest mobile phone operator.

In the midst of all this, Circles Life, a mobile virtual network operator (MVNO), has leased capacity from M1 and started its own network offering mobile plans. Early indications show that it has been able to generate a fair amount of interest.

With Singapore's mobile penetration rate hovering in the 150 per cent range, any gains by new operators will likely to be at the expense of existing ones. The financial impact is of particular concern to telco investors, given that earnings over the past few quarters have been less than stellar.