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Friday, March 4, 2016

BMI cautious on Singapore's telecom sector

BMI Research, a Fitch Ratings group company, is cautious on the financial performance of the three Singapore telecom companies, amid rising competition in the sector.

BMI expects investments by the three operators -- Singapore Telecommunications, StarHub and M1 -- to rise due to the upcoming auction of telecom bandwidth.

BMI says the entry of a fourth telecom company can potentially be "price disruptive" for the sector.

Singapore's telecom regulator plans to bring a fourth player in the sector.

The news has hurt M1, the smallest of three companies, the most.

M1's share price has fallen 35.8% over the past year, and BMI is bearish on the outlook of the company.

Even if the regulator's aim to license a new entrant is unsuccessful, rising competition among the three incumbents, in a bid to boost subscriber base, will eat into their profits, BMI adds.

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