A snapshot of the mobile and tower markets of Singapore

Experienced mobile and tower industry advisors Capitel turn their analytical lens upon Singapore, providing an insight into the shifting competitive landscape for operators and the potential for future infrastructure sharing, or even independent infracos, in one of Asia’s most mature and sophisticated mobile markets.

TowerXchange: Please introduce Capitel Partners.

Capitel is a leading advisor on complex investment decisions by service providers, global institutional investors and policy makers in Telecoms, Media and Internet. We have advised on multi-billion dollar transactions and investments plans. We are based in Singapore and India, and serve a client base located in the U.S., Asia and Europe.

TowerXchange: Please introduce us to the Singaporean mobile market. Who are the operators? At what level is ARPU now and where is it trending?

Singapore is a mature mobile and fixed telecoms market, with mobile penetration close to 150%, and fixed broadband penetration in almost all households. There are mobile only offerings, triple play services and high-speed FTTH broadband services.

There are three incumbent operators, namely Singtel, Starhub and M1, with mobile market shares of 49%, 27% and 24% respectively.

The regulator has considered entry of a new entrant operator in mobile to offer innovative services and also to promote competition. The planned auctions in this year will allow new entrants to purchase spectrum and roll out mobile services. Consistel, and MyRepublic are reportedly interested in the mobile license.

The fixed broadband market has witnessed significant price competition with the entry of new providers such as MyRepublic that are offering FTTx services at a fraction of the incumbent prices. The model is to leverage the NGNBN (Next Generation Nationwide Broadband Network) to offer low priced, high-speed fiber broadband access to households and businesses.

ARPU for mobile only services offered by M1 is at SGD30 per month (US$22.39). For other operators offering bundled services, the ARPU is in the range of SGD42-SGD48 per month (US$30.22-35.82). With the entry of new mobile operator, the mobile-only ARPU may witness some pressure, as new entrants are reportedly planning to offer 2GB data for SGD8 (US$5.76) for a prepaid model. Incumbents have launched SIM only plans, and have also reduced tariffs for existing plans.

Handset subsidies remain a source of concern for operators, and are impacting their profitability due to high subscriber acquisition costs.

TowerXchange: How mature is the rollout of mobile broadband? What spectrum has been acquired, at what cost and what spectrum is coming to market? What levels of data usage are we seeing? How fast is data usage growing, and does the network have adequate capacity?   

Incumbents have been rolling out LTE networks, and have achieved close to 99% geographic coverage with LTE. The LTE subscriber penetration has now reached 70% of the base.

The average throughput received by consumers is in the range of 4Mbps – 5Mbps.

Incumbents are using 900MHz for GSM as well as 3G and 4G deployments. Operators plan to shut down GSM services from 2017, and their spectrum roadmap for 900MHz will also depend on their spectrum holdings after the 900MHz auctions. In addition to 900MHz, operators are using 1,800MHz, 2,100MHz and 2,500MHz spectrum bands.

3G is deployed on 2,100MHz, and LTE deployments are on 1,800MHz and 2,500MHz. The regulator is also offering 700MHz and 2,300MHz in the upcoming auctions, and we expect LTE deployments to also start moving to these bands. Table one provides details of spectrum available in upcoming auctions.

Data usage on mobile is reportedly in the range of 3GB to 4GB per month. The total petabyte traffic on the mobile network is growing, although there is also support from high penetration of fixed broadband and Wi-Fi. With the entry of new operators, increase in offered speeds and affordable prices, the mobile data usage is expected to increase from the current levels.

TowerXchange: Roughly how many cell sites are there in Singapore? How is indoor coverage achieved? Is fiber ubiquitously available?

Incumbent operators do not share the number of sites deployed by them. Independent estimates from industry analysts suggest 2500-3000 sites deployed per operator for macro coverage. Indoor coverage is via building coverage using IBS and other solutions – incumbents have not deployed a large number of small cells as their spectrum holdings on sub-GHz bands are good. It is estimated that incumbents are covering 600-800 buildings with indoor coverage solutions.

Next generation fibre backhaul is widely available in Singapore, and will be needed for high density small cell deployments.

TowerXchange: Appreciating the incumbents do not share counts, what would you estimate is the total site count for Singapore? And how does that divide between ground based towers (GBTs) and rooftops?

We would estimate there to be a total of 6,000-7,500 sites in Singapore. Given the urban density, 85-90% of those sites are rooftop structures, with most of the rest being monopoles, primarily located on the outskirts of the city.

TowerXchange: Is there a lot of parallel infrastructure, or is there a culture of infrastructure sharing? Is sharing limited to passive infrastructure or is there RANsharing in Singapore?

The regulator, IDA has provided a Code of Practice for Info-communication Facilities in buildings (COPIF) that details the requirement of building owners and developers to provide space and facilities for deployment of mobile services in residential and non-residential buildings.

There is no mandatory sharing of infrastructure, and incumbent operators have parallel deployments rather than shared infrastructure. The new entrant has requested the regulator to mandate sharing of infrastructure especially for indoor areas and locations such as MRT tunnels and transport networks. As per the current policy, such a mandatory sharing requirement has not been approved.

TowerXchange: What would a new entrant MNO have to invest to build a network in Singapore? What are the prospects for a new entrant sharing existing infrastructure?

There are varying estimates for new entrant capex in the range of SGD250mn to 400mn+ (US$186.6-298.5mn). Our estimates based on network coverage and capacity modeling for each of the fifty five planning areas in Singapore suggests a capex of close to SGD400mn. This capex consists of investment in procuring spectrum and deploying active infrastructure for macro, street and small cell networks, in addition to transmission and other miscellaneous capex.

The new entrant has requested mandatory infrastructure sharing, as they believe it will take them three years and more to match the coverage requirement of incumbent operators especially in indoor locations such as basements. However, the policy guidelines do not mandate sharing for now – there can be a potential commercial model for bilateral sharing among telecom operators which will be market-led rather than regulation–led.

TowerXchange: Are there any independent infracos, particularly towercos, in Singapore? If not, is there an opportunity for one or more?

There are no shared infrastructure providers for macro and street coverage.

With the increase in price-led competition, and increasing impact of acquisition cost and falling broadband prices, there is a clear argument for infrastructure sharing. If incumbent operators can develop a commercial model that allows entrants and potentially other incumbents access to their network infrastructure, it can be a win-win arrangement.

TowerXchange: How would you sum up your vision for the future of the mobile and tower markets of Singapore?

We are very positive on the mobile broadband and tower market in Singapore. We expect new entrants to drive innovative M2M services and other areas leveraging cloud based services, increasing data usage among retail users, and improving service experience. All these demand and supply factors will require network densification that will drive the need for more sites on streets, retail locations, transport networks and CBDs.

There are competitive considerations currently that prevent infrastructure sharing, however, with increasing competition and stretched balance sheets we may begin to see bilateral and finally independent infraco led infrastructure sharing.