A telephone company, also known as a telecommunications
operator or telco, is a kind of communications services provider that provides
telecommunication services such as telephony and data communications access. In
Singapore’s context, our telephone companies are also wireless carriers and
function as internet service providers.
Currently, there are 3 major telcos operating in Singapore,
namely Singtel, Starhub and M1. These companies have a combined market
capitalization of S$66 billion and average a dividend yield of 5.8%. With
telecommunications stocks being pitched as defensive stocks and favoured for
their stable and attractive dividend yields, these stocks appeal to many
investors as a means to diversify their portfolio.
Over the last few years, mobile data usage has been
increasing due to higher penetration rate and increased demand. The increasing
connectivity between digital technologies and applications has resulted in new
business opportunities for telecom companies to tap onto this rising data
traffic. In order to keep up with the trend and meet consumers’ needs, telcos
have to adapt their business model.
SingTel is the best-known leading of the telecommunication
industry. It is Asia's largest multi-market mobile operator and it is still
growing. SingTel has had more than 120 years of operating experience and has
played an integral part in the development of the city as a major
communications hub in the region. It has driven the competition as the
challenger brand and led the way in technological innovations and
Over the years, SingTel has grown to be a global player
with a strong regional heritage. The reason behind SingTel's success is that
they based upon their customer focus. They listen to, and connect with,
customers and treat them with dignity and respect. By understanding and
anticipating their needs, they make it easy for their customers to do business
With 100% customer satisfaction, SingTel aim to offer them
value and quality services to enrich lives and enhance business success.
StarHub Ltd. is the fast-rising challenger
in the Singapore telecommunications market, placing second behind former government monopoly
Singapore Telecom (SingTel). StarHub is also that market's only
telecommunications group capable of providing the full range of
telecommunications services, combining fixed and wireless telephone networks, cable television service, and broadband
Internet access. As such, 75 percent of Singapore's population of one million
households subscribes to at least one of StarHub's services, and nearly 30
percent of the population subscribes to two of the company's services. The
company offers fixed line digital telephone service, as well as its own GSM and high-speed 3G cellular phone service, through
StarHub Mobile. StarHub also has put into place international roaming
agreements with some 13 countries worldwide. StarHub's share of the Singapore
mobile market tops 30 percent. The company's cable television network is
available to 99 percent of Singapore's population, and features some 50
channels, most of which are international channels. StarHub launched a digital
television package in 2004 and, on a more limited scale, a Digital Terrestrial
Television system, available to corporate customers. The only cable TV supplier
in Singapore (which has banned satellite television services), the company
boasts more than 400,000 customers. StarHub's broadband Internet access service
piggybacks on its cable television network, offering the island's highest
download speeds of up to 30 Mbps. The company holds more than 46 percent of
Singapore's broadband market.
is one of the three major full service communications providers in Singapore.
It offers a suite of mobile voice-and-data communication services over its
2G/3G/3.5G/4G/LTE-A network, including international-call services to both
mobile- and fixed-line customers. These include SMS, MMS, WAP, GPRS, 3G, 3.5G
and 4G and was the first Singapore operator to launch a nationwide 4G LTE and
4G LTE-A network. It also offers prepaid mobile services, such as prepaid data
plans, under its M Card brand. It is one of the operators in Singapore to offer
a prepaid 4G service. In 2016, it launched the first wireless service for
public buses called WiFi-On-The-Go. Also, Achieved 4G peak download speeds of
more than 1Gbit/s, and peak upload speeds in excess of 130Mbit/s, through a
collaboration with Huawei, reportedly Southeast Asia’s fastest combined upload
and download mobile speeds.
Industry Overview :-
Mobile Market –
Two key drivers of the mobile market is the population growth
rate and smartphone penetration rate. Singapore’s population growth rate has
been on a declining trend in the last few years and growth is currently at
about 1.2% in 2015. We expect the growth rate of new mobile subscribers to be
similar to the population growth rate at the range of 1-2%.
As for smartphone penetration rate, Singapore ranks 1st
across the world with 85%. Penetration rate will increase at a much slower rate
compared to other countries. In the near future, we believe that growth in the
mobile market will slow down due to telecommunications industry being a
relatively saturated market in Singapore and being limited by the population
Demand for broadband has been on the increase over the last
few years as more consumers switch to optical fiber broadband. It is also worth
noting that subscribers are now switching to faster broadband which indicates
higher revenue for the telecom companies.
Pay TV :-
Currently, all 3 telcos in Singapore offer their own Pay TV
services (StarHub TV, mio TV and MiBox). Each carrier offers a wide array of
shows ranging from sports and educational shows to movies and international
channels. However, they have been facing competition from over the top (OTT)
content providers such as Netflix which delivers their programs over the Net.
Another competitor, ViewQwest5 has also offered a set-up box which allows
broadband users to easily stream videos and bypass geographical restrictions.
Therefore, the market for Pay TV is very competitive and it will be challenging
for the telecom companies to retain their subscriber base.