A Morgan Stanley report on MyRepublic published earlier this week revealed that the Singapore-based broadband provider is experiencing a strong growth in the fixed broadband market.
In 2015, MyRepublic started with 30,000 broadband subscribers in Singapore. By the end of the year, it had acquired over 90,000 subscribers in three markets: Singapore (50,000), New Zealand, and Indonesia. It is expected to hit 300,000 subscribers by end-2016 and believes it can break even at 5 percent of the market share in Singapore.
While it has a strong interest in NBN (which stands for next generation broadband network, not to be confused with Australia’s National Broadband Network) markets, it also keen on many non-NBN markets, given that many emerging markets in the region have yet to adopt the NBN infrastructure. MyRepublic expects Indonesia to be a key contributor to its non-NBN subscriber base as less than one per cent of the broadband speeds in its market exceed 10 mbps.
Operators globally are ditching fixed content and access — and phasing out cross subsidisation across mobile and fixed content access — to provide OTT (Over The Top) services such as Netflix. MyRepublic believes that it stands a good chance to leverage this to innovate its broadband services.
Becoming the fourth telco in Singapore
Despite the naysaying from Singtel’s CEO, MyRepublic remains resolute in becoming Singapore’s fourth telco and will participate in the upcoming mobile spectrum auctions in June 2016. In this round, it will focus on bidding for the spectrum that is reserved for new entrants at a lower base price.
To differentiate itself from its competitors, MyRepublic intends to leverage on evolving digital trends such as IoT, and throw in a mix of varied attractive pricing options to tailor to different customers’ requirements and usage levels.
Last year, the company did a mobile trial in Singapore, where it field tested its potential mobile operator as well as stress-tested its engineering assumptions. In an end-user survey conducted to gauge the public’s demand for a fourth telco operator, the response was largely positive.
Financial targets and funding raising goals
For its telco operations, MyRepublic aims to hit 8 – 9 per cent of the market share in five years and break even in 2 – 3 years.
Given that it has already in place an advanced infrastructure (with next generation process automation), IT systems and brand presence, MyRepublic expects it will require only an additional S$250 million (US$173 million) of funds to get the operation up and running, compared to the traditional greenfield network, which cost up to S$1 billion (US$713 million).
MyRepublic is already in the midst of raising funds and aims to raise S$300 million (US$214 million) from two banks. These funds will be used mainly to accelerate its broadband business in the Indonesian and Australian market. It will also channel some funds to its Singapore telco business.
The company previously raised close to S$100 million (US$71.3 million). According to a spokesman for MyRepublic, its S$20 million (US$14 million) angel fundraising round is going swimmingly and may be completed soon. It is still actively looking for investors.