Commentary – M1-Simba deal collapse: A setback for consolidation, but not necessarily for Keppel or consumers

Date: June 23, 2026

First published in Straits Times on 22 June 2026

The collapse of Simba Telecom’s proposed acquisition of M1 has dealt an unexpected blow to what many had viewed as the inevitable consolidation of Singapore’s telecommunications industry.

Yet as far as consumers and Keppel shareholders are concerned, the jury is still out.

For one, Keppel may still find a buyer for its M1 stake, possibly at a better price, while the public looks likely to continue to benefit from increased competition within the telco sector among four – instead of three – main network providers.

The sale of M1, first announced in August 2025, would have combined the country’s third and fourth mobile network operators in a deal valued at about $1.43 billion.

It was expected to reshape the competitive landscape by reducing the number of mobile network operators (MNOs) from four to three.

However, the Infocomm Media Development Authority (IMDA) suspended its review of the M1 sale after discovering that Simba may have been using radio frequency bands that it had not been assigned The deal subsequently lapsed after regulatory approval failed to materialise.

What the collapse means for Keppel shareholders

At first glance, the outcome appears disappointing for Keppel shareholders because the group had expected to receive approximately $1 billion in net cash proceeds from the sale and had indicated that a special dividend could have been considered upon completion.

The transaction was also consistent with Keppel’s long-term strategy of monetising mature assets and focusing on higher-growth areas such as digital infrastructure.

On May 18 when the news first broke, Keppel’s shares came under immediate pressure, closing 22 cents or 2.1 per cent lower at $10.38. The selling continued on May 19 with a further loss of 15 cents or 1.4 per cent at $10.23.

However, it appears that after the knee-jerk drop, the market’s re-evaluation of the news was that it perhaps was not as negative as first thought – by the end of the same week, Keppel’s shares had recovered at $10.91.

By June 17, Keppel’s share price had risen further to close at $11.37, considerably higher than before the IMDA announcement.

It appears that the market recognised that the collapse of the deal does not mean that M1 has suddenly become less valuable. In fact, some analysts have argued that the transaction demonstrated there is genuine strategic interest in M1 and that other potential buyers could emerge from others within the sector.

More importantly, Keppel is not being forced into a fire sale as the company has indicated that it remains open to future divestment opportunities while simultaneously pursuing a Plan B aimed at improving operational efficiency, rightsizing costs and enhancing profitability at M1.

If these initiatives bear fruit, Keppel could potentially secure a higher valuation in the future than what was originally agreed with Simba, an outcome which would clearly be positive for Keppel shareholders.

The broader industry question

While Keppel’s position remains relatively resilient, the failed transaction has wider implications for Singapore’s telecommunications sector.

For years, industry observers have argued that Singapore’s mobile market is overcrowded compared with other places, where consolidation has helped improve market conditions. These include Malaysia, Thailand, Indonesia, India and the US.

Even large markets like China, India, Indonesia and the US are three-player markets now. In contrast, the Singapore market, despite being very small, is extremely crowded, with four MNOs and at least a dozen mobile virtual network operators.

The entry of TPG Telecom, now operating as Simba, intensified price competition and compressed margins across the industry.

Consumers undoubtedly benefited from lower prices and more generous data packages, but operators found themselves under increasing pressure to invest in network infrastructure while earning lower returns.

The proposed M1-Simba combination was widely viewed as a remedy for this situation. By creating a stronger third operator capable of competing more effectively against Singtel and StarHub, consolidation promised greater economies of scale and potentially healthier industry profitability.

With the deal now off the table, at least for the foreseeable future, the status quo remains. Whether that is good or bad depends on one’s perspective.

What it means for consumers

From a consumer standpoint, the immediate effects are likely to be positive because four-player competition is generally more intense than three-player competition, in which case the pressure to attract and retain subscribers remains high, suggesting that aggressive pricing, promotional offers and generous data allowances are likely to continue.

This is particularly relevant at a time when mobile services have become essential utilities rather than discretionary purchases. Singaporeans have become accustomed to affordable plans with large data bundles, and a continued four-player market makes it less likely that prices will rise significantly in the near term.

However, there is another side to the argument.

Telecommunications networks are capital-intensive businesses. Operators must continually invest in spectrum, cybersecurity, cloud infrastructure and next-generation network capabilities.

If industry profitability remains under pressure for an extended period, investment incentives may weaken.

This does not mean consumers immediately suffer. But over the longer term, an excessively fragmented market can make it harder for operators to generate the returns necessary to fund innovation and network upgrades which would then not be beneficial to consumers.

The challenge for policymakers is therefore to strike a balance between competition and sustainability.

The broad approach taken by local regulators has been to encourage robust competition while ensuring that operators remain financially viable.

In this regard, the IMDA’s intervention in this case was not about preventing consolidation. Rather, it reflected concerns regarding regulatory compliance and spectrum management, issues that go to the heart of maintaining a fair and orderly telecommunications market.

Consolidation delayed, not abandoned

The irony is that the long-term logic behind industry consolidation has not disappeared simply because this particular transaction failed; after all, the economic arguments remain largely intact – Singapore’s telecommunications market still faces the same structural pressures it faced before the deal was announced.

Competition remains fierce, margins remain under pressure and the need for continued investment remains substantial. As a result, the prospect of future consolidation should not be dismissed.

For Keppel, the failed transaction is undoubtedly an inconvenience which may prove to be a delay rather than a defeat. The company retains ownership of a strategic asset, has time to improve its performance and remains free to explore alternative monetisation options.

For consumers, the continuation of four-player competition should preserve attractive pricing and service offerings in the near term.

In that sense, both Keppel and consumers may emerge from this episode in better shape than initially expected. The real loser may simply be the timetable for telecommunications sector consolidation, which appears to have been pushed back rather than permanently abandoned.

• The writer is Mr David Gerald, Founder, President and CEO of the Securities Investors Association (Singapore)