Singapore-based telco MyRepublic expects to complete a $178-million funding round by April 2016 ahead of Singapore auctioning licenses for a fourth mobile operator. The city state’s Infocomm Development Authority (IDA) had unveiled rules for auctioning airwaves to select the fourth mobile player yesterday (February 18).
The move to raise capital is also aligned to its plans of conducting an initial public offering (IPO) in the next 24-36 months, according to a Morgan Stanley report.
MyRepublic also plans to roll out a next-generation “pre-5G network” which will make adapting to future 5G standards simpler.
On Thursday, the IDA has that said the auction will be held in two stages, and the first phase will be open only to new entrants bidding to become the fourth operator in the city state. In the second stage, the airwaves auction will be open to both existing players (M1, Singtel Mobile and StarHub Mobile), as well as the new entrant who bagged frequencies in the earlier bidding process.
To secure spectrum space, MyRepublic will have to pay out at least S$35 million ($21.4 million), reduced from a previously proposed S$40 million reserve price. According to the IDA, this reduction reflected a change in the spectrum bundle. Should MyRepublic fail to secure a telecoms licence, the spectrum will be reallocated to the next phase and auctioned to existing market players.
MyRepublic’s communications manager, Fabian Lau, explained: “Our planned network infrastructure will have a next-generation, fully virtualized core network. This is in contrast to older telco networks, which are hardware-based and where every function would require a specialized piece of hardware.”
This would see it replacing costly physical equipment with virtual machines operating on servers, saving costs while enabling greater efficiency such as implementing Internet of Things (IoT)-related services.
MyRepublic started 2015 with 30,000 broadband subscribers in Singapore and claimed to have acquired over 90,000 subscribers across three markets; Singapore (50,000), New Zealand, and Australia, where it maintains a presence.
According to a Morgan Stanley report, it expects to reach 300,000 subscribers by the end of 2016 and projects breaking even upon capturing 5 per cent of Singapore’s market share. Morgan Stanley reported that Singapore’s broad market is gaining scale, with 30,000 residential and 2000 business subscribers, which gives it a market share estimated at 5 per cent of the fibre broadband market.
This is an increase from an estimated 3 per cent at the beginning of 2014 and implies a 10-12 per cent share of “incremental” growth in fiber broadband in 2014, being comparable to M1 but lagging behind Singtel and StarHub at this point.
With its aim to de-commoditise the broadband connection service, rather than functioning as a low-cost provider, CEO Malcolm Rodrigues disclosed to Morgan Stanley that in terms of average revenue per user (ARPU), it was higher than M1’s, estimated at S$46/mth as of December 2014.
MyRepublic maintains a strong interest in NBN (next-generation broadband networks), however it is keen on exploring non-NBN markets, given the prospects presented by emerging market states that have not adopted NBN infrastructure. MyRepublic is focusing on providing fast connectivity in dense areas, while relying on existing infrastructure to provide nationwide connectivity.
MyRepublic expects Indonesia to be a key contributor to its non-NBN subscriber base, in addition to New Zealand and Australia as immediate focus markets. Within the New Zealand market, MyRepublic is targeting a 5 per cent market share. It entered it six months ago and to date has claimed a client base of 1000 subscribers, with minimal marketing expenses. It is already being seen as a threat to telecoms incumbent Telstra.