Fourth telco hopefuls plagued by funding hiccups

The incumbents shouldn't be too worried.

When MyRepublic first declared its intention to become Singapore's newest mobile network operator, analysts feared that incumbent telcos' profits will take a hit with the entrance of a new player. But now, with mere months to go before the scheduled spectrum auction, it has become apparent that inadequate funds might overshadow MyRepublic's fourth telco bid.

According to a report by Maybank Kim Eng, MyRepublic had just $130,000 in cash in its 2015 financial statement, and the company also lost $9.4m in Singapore and NZD5.5m in New Zealand during the period. Its CEO Malcolm Rodrigues has also confirmed that its banks DBS and Goldman Sachs have been struggling to raise funds.

Maybank Kim Eng also noted that MyRepublic wanted to complete a funding round of SGD250 million by April, but has not reported any progress since its fundraising plans were first reported in February.

"Our ground checks suggest that MyRepublic is finding it an uphill task despite its appointment of two major investment banks," Maybank Kim Eng said.

On the other hand, Consistel—another fourth telco contender—is reportedly looking at a mix of funding options, including term loans and equity. In March, Consistel reported that it had secured SGD400m of the SGD 1 billion that it hopes to raise ahead of the spectrum auction in Q3.

“In our view, Consistel could make a more rational competitor than MyRepublic, going by their different media tones. We are likely to remain positive on the sector if Consistel wins. But regardless of who wins, we think the risk-reward trade-off for Singtel and StarHub is favourable,” Maybank Kim Eng said.

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