StarHub and Keppel have confirmed they are discussing a potential transaction involving Singapore telecommunications operator M1, reopening talks over a deal that could reshape the country’s mobile network market.
The companies disclosed the discussions in separate filings on September 23, while stressing that there is no certainty an agreement will be reached. Keppel said it continues to examine consolidation opportunities involving M1, citing the need for greater consolidation in Singapore’s telecommunications industry.
The Brandspur News Desk reports that the discussions follow the collapse of Simba Telecom’s proposed $1.4 billion acquisition of M1’s telecommunications business in May. The transaction was halted after Singapore’s Infocomm Media Development Authority suspended its assessment while investigating Simba’s unauthorised use of spectrum.
If completed, a StarHub and M1 combination would reduce Singapore’s number of mobile network operators from four to three, subject to regulatory approval. The two companies had also reportedly explored a possible merger in 2024, although those discussions did not result in a transaction.
The latest talks are also significant because of the ownership links between the companies. Temasek is a controlling shareholder of both StarHub and Keppel, while Keppel controls M1. Temasek is also the controlling shareholder of Singtel, giving the state investment company interests across three of Singapore’s four mobile network operators.
StarHub has been facing pressure from intense competition in the mobile market. Its mobile service revenue fell 10.5 per cent year on year to $245.3 million in the six months ended June 30, while underlying net profit excluding Ensign dropped 76.1 per cent to $12.4 million.
The financial pressure has strengthened the case for cost reduction and consolidation within the sector. StarHub has committed to $70 million in cost savings and had achieved 10 per cent of that target by August, according to its management.
M1 is pursuing a similar strategy, targeting $70 million in annual run rate savings by 2028. It had achieved annualised savings of $4 million in the year to date and was aiming to reach $10 million by the end of 2026.
Reports also indicate that advisers have been appointed for the potential transaction, with JPMorgan advising StarHub and DBS Bank advising Keppel and M1. The involvement of financial advisers indicates that discussions have moved beyond general market speculation, although the companies have not confirmed that a deal will be completed.
The proposed transaction comes as StarHub expands its own consolidation efforts. The company is preparing to move MyRepublic mobile customers onto its network and has also migrated customers from mobile virtual network operator redOne to its budget brand, eight.
M1 has remained open to potential divestment opportunities since the failed Simba transaction. Simba acknowledged on September 23 that it had exceeded its permitted limits on the 2,300MHz spectrum, attributing the unauthorised usage to a combination of hardware and software problems.
For consumers, any eventual StarHub and M1 deal would depend on regulatory approval and the final structure of the transaction. The immediate discussions nevertheless underline the growing pressure on Singapore’s telecom operators to reduce costs and respond to a market where several major players are competing for mobile customers and revenue.
