Broker: Maybank Research Pte Ltd
Date of Report: August 11, 2025

Simba’s Acquisition of M1 Set to Reshape Singapore’s Telco Landscape: Impacts on Singtel, StarHub, and Market Competition

Executive Summary: Major Shakeup in Singapore’s Telecom Sector

The Singapore telecommunications sector is on the brink of transformation as Simba announces its acquisition of M1 at an enterprise value (EV) of SGD 1.43 billion. This landmark move marks a pivotal moment for industry competition, market share distribution, and future growth for all major telcos in Singapore. The deal’s implications ripple across Singtel, StarHub, and the wider telecom ecosystem, promising both rationalized competition and new opportunities for investors.

Simba’s Acquisition of M1: A Strategic Leap Towards Market Rationalization

Simba, a subsidiary of Tuas Limited (TUA ASX), will acquire M1 (owned by Keppel, KEP1 SP) at an EV/EBITDA multiple of 7.3x (excluding M1’s ICT EBITDA). The consolidation is expected to bring much-needed equilibrium after years of aggressive competition, triggered initially by Simba’s entry as the fourth operator in 2020 and further intensified by incumbents’ responses through cheaper digital brands and partnerships with mobile virtual network operators (MVNOs).

• Combined Market Share: Post-merger, the telco landscape would see Singtel (ST) holding ~55%, StarHub (STH) ~24%, and the combined M1+Simba entity ~22%.
• Competition Dynamics: MVNO contracts, generally lasting 3-5 years and limited in sales reach, mean the market is primed for a reduction in aggressive competition as consolidation proceeds.
• Rational Pricing Ahead: With Simba and M1 set to merge, there is little incentive for destructive price wars, as both operators would risk self-inflicted losses.

StarHub: Unexpected Beneficiary with Strong Dividend Prospects

Market expectations had leaned towards a potential StarHub-M1 tie-up. However, the Simba-M1 merger is more strategically sound given Simba’s smaller market presence (~5% pre-merger), which otherwise would not have been enough to rationalize competition.

• Network Synergies: StarHub and M1 already operate a singular 5G access network. The inclusion of Simba’s spectrum into this shared infrastructure will enhance overall network efficiency without requiring StarHub to shoulder the cost of complex integration.
• Dividend Certainty: As StarHub avoids the heavy lifting of industry consolidation, its dividend outlook is clearer and more secure.
• Network Differentiation: While the merged entity will gain additional spectrum and network superiority, the impact is expected to be modest, as robust network coverage is already a given across Singapore.

Singtel: Limited Direct Impact but Attractive Growth Trajectory Maintained

Singtel stands to benefit from a more rational competitive environment, though the effect is relatively muted given that Singapore consumers account for less than 10% of its sum-of-the-parts (SoTP) valuation. The company’s operational momentum remains positive across all segments and associates.

• Growth Drivers: Singtel’s performance is buoyed by strong contributions from all operating units and associates, with the Singapore Consumer segment positioned to benefit from consolidation-led stability.
• Recommendation: The report maintains a BUY rating on Singtel, citing the group’s overall positive trajectory and growth in key associates.

Company Financial Snapshot & Valuations

Detailed Company Analysis

Simba (Subsidiary of Tuas Limited, TUA ASX)

• Unlisted subsidiary, entered Singapore in 2020 as the #4 mobile operator.
• Has driven aggressive competition, prompting incumbent telcos to launch budget-friendly digital brands and MVNO partnerships.
• Post-merger with M1, Simba will hold a ~22% combined market share, reducing its need for ultra-aggressive tactics.

M1 (Owned by Keppel, KEP1 SP)

• Subject of Simba’s acquisition at an EV of SGD 1.43 billion, based on 7.3x EV/EBITDA (excluding ICT EBITDA).
• Brings scale and spectrum to Simba, contributing to a more balanced three-player market structure.

StarHub (STH SP)

• Current market share of ~24%, operating in a shared 5G access network with M1.
• Poised to benefit from the Simba-M1 merger through shared network synergies, without bearing integration costs.
• Dividend outlook remains stable and robust.
• Analyst rating: HOLD, with a forecasted modest downside (-4% upside) and dividend yields above 5% for 2025 and 2026.

Singtel (ST SP)

• Dominant market leader at ~55% share.
• Likely to see only moderate direct benefit from the merger, as Singapore consumer revenue forms a small portion of its overall SoTP.
• Retains a BUY rating due to broad-based operational strength and growth across associates.
• Forecasted dividend yields of 5.0% (2025) and 4.8% (2026), with price upside potential of 13%.

Key Market and Industry Takeaways

• Industry Consolidation: The Simba-M1 merger is poised to usher in a more rational pricing environment, with less incentive for cut-throat competition.
• Network Quality: While the merged entity will improve spectrum and possibly network quality, Singapore’s telco market already enjoys strong coverage, limiting differentiation opportunities.
• MVNO Impact: With most MVNO contracts short-term and limited in reach, their influence on market competition will likely wane as consolidation takes hold.
• Dividend Visibility: StarHub, in particular, stands out for investors prioritizing dividend stability, benefiting from industry changes without bearing integration risks.

Conclusion: A New Era for Singapore Telcos

The acquisition of M1 by Simba signals the dawn of a more rational and potentially profitable phase for Singapore’s telecommunications market. While Singtel continues to chart its growth story with limited impact from this deal, StarHub emerges as a beneficiary of network synergies and dividend certainty. Investors should monitor this evolving landscape as consolidation paves the way for improved financial health and sustainable competition among the city-state’s leading telecom operators.