Telco competition set to subside, price war unlikely after sale of M1: Analysts

Consolidation of 4 network operators into 3 may reduce pressure to compete on price

- Sarah Koh and Koh Ming Lun

Simba Telecom's acquisition of rival M1 is expected to create a stronger competitor to Singtel and StarHub, but do not expect mobile plan prices to change as a result, said analysts.

A price war is unlikely to break out in the near term as current plans are already competitive, said Ms Carmen Lee, head of OCBC Investment Research.

On August 11, Singapore-based Keppel announced the sale of the telecoms business of its subsidiary M1 to rival Simba Telecom for $1.43 billion.

For instance, Simba's Super Roam10 plan comes with 400GB of data for Singapore, Malaysia, Indonesia and Hong Kong at a price of $10 monthly. M1's Maxx plan also offers a generous 290GB of data for use in Singapore and Malaysia for a record low of $7.90 a month.

"In a typical merger, the initial period will entail a relook into understanding the combined entity and the potential synergies. We believe pricing strategy will not be an immediate consideration," said Ms Lee.

Similarly, rivals are unlikely to undercut their prices to win over M1 customers even though it is easy for consumers to switch telcos.