MyRepublic Ltd. Seek Profit in Three Years as The Fourth Singapore's Mobile-Phone Carrier Provider
MyRepublic Ltd., the Internet service provider is bidding to become the fourth mobile-phone carrier in Singapore. The company said its low-cost will enable it to become profitable in three years.
Singapore mobile carrier was once under monopoly by Singtel. However, as government liberated the telecommunication sector, two other players entered the market since late 1990's. They are Starhub and M1.
MyRepublic planned to be the fourth mobile-phone carrier as it has placed a bid for spectrum auction. Starting its business as Internet service provider, MyRepublic has owned an optical fiber broadband infrastructure with advantage on bandwidth availability. CEO Malcolm Rodrigues in an interview on Monday told Strait Times, "We'll have a much faster network than the existing players because our network will be less dense. We don't have legacy issues, so our operating costs will be lower."
Regulator in Singapore have made an auction for spectrum and MyRepublic expect to win the auction. Meanwhile Singapore government expected wireless software provider Consistel is also place a bid.
Singapore is listed as the most expensive in mobile data in Asia, based on Sanford Berstein data as quoted by Bloomberg. Its mobile data cost was twice more expensive than Hong Kong, South Korea and Thailand, and three times higher than Australia, India and Indonesia. In order to drive price lower, government planned to introduce new competition to the market.
However, Singtel Chief Executive Officer Chua Sock Koong disagreed with the plan. Last month, he said that the new competition would drive prices lower and hurt the telecommunication industry. In respond to fear of competition from Singtel, CEO Rodrigues said, "We've never been a price disrupter and we never will be," as quoted by Bloomberg. "We'll offer customers more for the same price they pay other operators and bring back unlimited data."
Currently MyRepublic has about 500,000 fixed-line broadband users in Singapore. The company aimed to meet regulatory requirement in October 2018, by providing nationwide coverage. While MyRepublic expectes the auction to start in the third quarter this year.
In order to fund its operation, Business Times reported that MyRepublic has mandated Goldman Sachs Group Inc and DBS Group Holdings Ltd to help the company raising S$250 million. The company will need about $300 million to build a nationwide 4G network, less than a third of conventional infrastructure cost due to its already operational Internet business.
MyRepublic targeted a 9% of 7,8 million mobile users in Singapore within five years of operation. While in its first year as carrier, it aimed 250,000 customers and starting to gain profit in third year.
As the company has already operated an Internet service provider and own infrastructure, MyRepublic will be a lot more efficient in managing the mobile network. The first step is to win auction to become the fourth mobile carrier in Singapore.