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Singapore and Malaysia, the two countries shared very similar history, separated by politic. If you are an active investor in these two markets, you will realize many similarity between the two markets. In particular, we will look at the telecommunication industry in both countries.

 

Singapore

The telecommunication industry in Singapore is dominated by 3 main telcos; Singapore Telecommunications Ltd (ST:SP), Starhub Ltd (STH:SP) and M1 Ltd (M1:SP). Starhub Ltd and M1 Ltd are operating predominately only in Singapore. Singapore Telecommunication however, is a global telecommunication companies, owning interests in more than a dozen countries.

 

Malaysia

The telecommunication is also dominated by three companies, Maxis Bhd (Maxis:MK), Digi.com Bhd (DIGI:MK) and Axiata Group Bhd (AXIATA:MK). Maxis and Digi.com are predominately a local operation while Axiata Group is a multi-countries telecommunication giant as well. Ironically, Axiata Group is one of the largest shareholder of M1 Ltd.

 

Opportunity

Maxis and Digi.com tend to have a higher growth prospect compared to M1 Ltd and Starhub Ltd due to the larger population of Malaysia and the growing affluence in the country. Singapore, already has one of the higher mobile penetration in the region and might have a lesser growth potential in term of increasing its mobile subscribers.

 

Risk

As more and more services can be replaced through the advancement in internet speed, there is a risk that many of the services that a telecommunication company provides might be consolidated area its broadband offering.

 

Value Invest Asia

Telecommunication is regarded as a stable and safe investment due to the consistency of the revenue of the business. However, being a mature industry facing some disruptive new innovation in the mobile internet industry, the industry might be facing slower growth and higher risk in the future.

 
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All views and opinions articulated in the article were expressed in Stanley Lim’s personal capacity and does not in any way represent those of his employer and other related entities. Stanley Lim does not own any companies mentioned above.

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