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After failed 4th telco bid, MyRepublic seeks to be virtual operator, go public

July 6th, 2017 | by Alfred Siew
After failed 4th telco bid, MyRepublic seeks to be virtual operator, go public
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So, MyRepublic isn’t interested in buying M1, after all.

Apparently, there was speculation that the fibre broadband operator, fresh from the shock of losing a bid to be Singapore’s fourth telecom operator, was eyeing M1, the number three telco here.

Not so, MyRepublic chief executive officer Malcolm Rodrigues told various media outlets today. It now wants to be a virtual operator instead, buying airtime and bandwidth from one of the existing three telcos, he added.

The press event was billed as one where MyRepublic would “set the record straight” on market rumours. Certainly, that was what the media invitation that came into the mailbox said.

Truth is, if you ask the right sources in the industry, there wasn’t a realistic chance of the smaller broadband player gobbling up M1, which had a market capitalisation of close to S$2 billion.

For comparison, MyRepublic today said it had raised a total of S$120 million previously from strategic investors. Its latest round of fund-raising, begun in May, is aimed at bringing in another S$100 million to push out to markets in the region, reported The Business Times.

Those amounts are a far cry from what you need to take over M1. To raise that kind of money, you need financial backers that not only trust you to run the company afterwards but to do so in an increasingly tough market.

Now that TPG Telecom is entering the fray as a fourth telco, competition could make market players take drastic steps like price cuts to retain customers. Good news for consumers, not so rosy for investors.

Were there enough backers for Rodrigues and MyRepublic to take over a bigger player? Pretty doubtful, if you had considered the facts carefully.

When a source told Techgoondu last year that MyRepublic would be better off buying over M1 after it failed in a potentially costly bid to be the fourth telco, he was speaking half in jest.

No, you don’t go from readying S$100 million to join the market to swallowing up a S$2 billion rival in a few months. And the months ahead are not going to be all smooth sailing, either.

While going on the MVNO (mobile virtual network operator) route now is the right one to supplement its fibre broadband offerings, MyRepublic faces an uphill battle.

Another contender, Circles.Life, has been here for more than a year. In that time, it had cut prices for generous mobile data services, something that MyRepublic now says it also plans to offer.

Such a climate is also not ideal for an IPO (initial public offering), as MyRepublic wants to shoot for in 2018, either in Singapore, Hong Kong or Australia.

What the company has built up is lots of goodwill through its disruptive offerings over the years. It was the first to drop prices for 1Gbps fibre broadband plans under S$50 in Singapore in 2014, forcing the bigger players to follow suit.

So, when it said it was gunning to be the country’s fourth telco, much was expected. Unfortunately for MyRepublic, that dream came clashing down when TPG Telecom turned up as a dark horse and outbid it for a chunk of airwaves needed to operate mobile services here.

MyRepublic can still grow its subscriber base here if its mobile services are competitively priced. With 70,000 fibre broadband customers in Singapore, it is not starting from zero and can up-sell mobile bundles very quickly.

Depending on what happens to TPG – remember that it still has to take time to build an expensive network a few times the cost of the airwaves – MyRepublic’s story could turn out very differently in the coming year or two.

If TPG does well, it would surely rue a missed opportunity to build the foundation for future services. If TPG gets bogged down by cost and fierce competition from incumbents, MyRepublic might just feel that it had dodged a bullet.

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