RAM Ratings sees incumbent Singaporean telecommunication companies (telcos) holding their ground despite the potential of new players heating up competition. "Our analysis reveals that SingTel, StarHub and M1 have healthy cash-generating ability to drive data growth which dictates the future landscape", highlights Davinder Kaur Gill, Co-Head of Infrastructure & Utilities Ratings. "This positions the incumbents well against incoming competitors that would need to rapidly sink in hefty capex to gain significant traction", adds Davinder. RAM's commentary, Singaporean Telecommunications Sector - Liberalisation promotes leading technological advancement (released today) also outlines that the industry has experienced slower mobile revenue growth and the downtrend in average revenue per user in the fixed-broadband segment.
RAM expects spectrum-acquisition costs and advertising expenses to increase as more players enter the market. The intensifying competition in the telecommunications industry is moderated by Singapore's high income per capita as consumers have strong purchasing power and quick adoption of the latest products and technology. The Singaporean telecommunications sector has been charting healthy growth, with a 5-year (2010-2014) CAGR of 4.1% for industry revenue. The large spending power is also partly reflected in the higher postpaid-to-prepaid mix of the Singaporean market - atypical of the region where prepaid schemes generally take precedence.[1] Nonetheless, the industry is constrained by the nation's small and ageing population.[2]
While we acknowledge that Singapore is a small island, which eases the deployment of infrastructure, its success has been helped by the well-executed efforts of its government in creating a market-driven and open economy. The liberal regulatory landscape - as evinced by the auction of spectrum rights and the enforcement of competition law by the regulators, such as the cross-carriage rule for the pay-TV segment - facilitates competition based on efficiency and enables telcos to provide high-quality services at competitive prices, ultimately benefiting end-users.
RAM will be releasing telecommunications sector reports on selected ASEAN countries in the coming months. These publications can be accessed via our website, www.ram.com.my.
Subscribers can retrieve the full report on Singapore through this link. Non-subscribers may purchase the report at RM530 (inclusive of GST) per copy. For further enquiries, please contact Ms Ain at (603) 7628 1108 or Mr Faiez (603) 7628 1104, or fax (603) 2711 1701/ (603) 7620 8250, or e-mail ain@ram.com.my or faiez@ram.com.my.
Media contact
Chin Wynn
(603) 7628 1170
chinwynn@ram.com.my
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Published by RAM Rating Services Berhad
Copyright 2015 by RAM Rating Services Berhad
[1] Source: Asia Pacific Mobile Observatory, GSM Association.
[2] Source: Singapore Department of Statistics.
Press Release 2015
