TELCOs – DBS

Reality about Mobile Number Portability

Full mobile number portability (MNP) to go live in Singapore on 13 Jun 08. MNP would allow mobile-phone customers to switch operators without changing their numbers. This has raised investor concerns on how the competitive landscape can change in Singapore.

Experience suggests that MNP experience in Singapore should not be drastic. Almost everywhere, except Hong Kong, where MNP has been implemented, the effects of portability have been relatively minor and unnoticeable. Our analysis suggests that there are at least five reasons why MNP should not have much impact on the competitive landscape.

(1) Operators have signaled “status-quo” intentions to each other.
(2) Post-paid contracts are likely to be honoured in Singapore unlike Hong Kong.
(3) Competitive environment is less crowded than Hong Kong and Australia.
(4) A more mature market than others where MNP has taken place.
(5) No pent-up demand, as partial MNP already exists in Singapore.

Potential impact on each player should be minimal. We think that there could be negative impact on M1 due to its customers churning to other operators. For SingTel, the impact should be slightly negative to neutral while for StarHub the impact should be neutral. We maintain SingTel as our top pick for the Singapore Telecom sector.

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