Singaporean transport operator SMRT has entered an agreement with OMGTEL (OMG) to partner the latter’s bid for the city-state’s fourth wireless telecommunications (telco) carrier licence. OMG is a company incorporated by local tech firm Consistel in October 2014 in order to bid for the licence.
SMRT and OMG will collaborate on providing goods and services, leveraging on SMRT’s extensive media presence and commuter reach as a competitive advantage. According to SMRT, such a transaction will not impact SMRTs financial performance for FY 2015, which ends at the end March 2016
SMRT has also opportunity to invest up to S$34.5 million ($25.6 million) via subscribing to OMG shares. Exercising this option is subject to OMG obtaining the telco licence, satisfactory due diligence on OMG and the execution of definitive agreements between SMRT and OMG. Masoud Bassiri, OMGTEL chairman, stated “OMGTEL believes SMRT will make a significant and strategic contribution to making OMGTEL a success in the years to come.”
An advisory board that includes former Foreign Affairs Minister George Yeo, former Singapore Police Force commissioner and INTERPOL president Khoo Boon Hui, in addition to former deputy CEO of the Media Development Authority (MDA) Michael Yap, have been prepared for acquisition of the license. In addition to the advisory board, OMGTEL has entered into a mobile backhaul services agreement with SP Telecommunications.
Masoud commented “OMGTEL will be a true Singaporean alliance to be of service to all Singaporeans for many years to come. It will build a cutting edge telecommunications network and provide exceptional service to its members, building on many years of knowledge and expertise acquired in Singapore as well as in other countries.”
Teo explained “Neither side has ever built a full telco network, so in terms of experience, they are both almost zero. OMG will probably get access to the train tunnels, and that might give them better coverage. But right now, it is everybody’s game. It all depends on who can handle the challenges of the industry – such as pricing, talent and IDA’s expectations – better.”
However, more information is required to evaluate the bid, given a deficit of information on who owns and bulds the network, as well as how the plan to differentiate themselves in the oligopolistic market of Singapore. Teo concluded “If they are going to be the cheapest, well, price doesn’t move a lot of people – they will need to have value-add.”