MobileOne Pty (M1), the main mobile competitor to incumbent operator Singapore Telecommunications Ltd (SingTel) plans to launch an initial public offering that could raise between SGD 875m ($496m) and SGD1.1bn ($624m).
Shareholders are aiming to sell between 57% and 70% of the operator’s 1.05 billion shares. It is marketing the shares at SGD 1.25 ($0.71) and SGD 1.52 ($0.86) a piece, and expects to set the final price in two weeks time.
The wisdom of seeking an IPO in the current economic climate, which is decidedly hostile to any telecom-related stock, is being questioned by some analysts. Comparisons are being drawn to China Telecom’s IPO, which has been plagued by weak demand, and forced it last week to cut its share sale 60% to $1.4bn.
M1 is the second largest mobile operator in the city state and has a subscriber base of 1 million, which accounts for roughly a third of mobile users there. Unfortunately, Singapore has a high saturation of mobile use, where 75% of the population is estimated to own a mobile phone. To put this in context, out of a total of 4 million people in Singapore, three out of four currently own a mobile. This has led to serious investor concerns about M1’s ability to expand in this market. Additionally, M1 lacks any international operations, in contrast to its bigger rival, Singapore Telecommunications.
M1 is owned by four companies. Singapore-based Singapore Press Holdings Ltd, Keppel Telecommunications & Transportation Ltd, UK-based Cable & Wireless Plc, and Hong Kong-based PCCW Ltd.