Keppel to sell M1’s telco business to Simba

[sphere]

Keppel to sell M1’s telco business to Simba for $1.43b, says deal expected to benefit consumers

Keppel will receive nearly $1 billion in cash proceeds for its 83.9 per cent effective stake in M1.

ST PHOTO: SHINTARO TAY

Published Aug 11, 2025, 08:36 AM

Updated Aug 12, 2025, 05:22 AM

 

SINGAPORE – Singapore-based Keppel is selling the telecoms business of its subsidiary M1 to rival Simba Telecom for $1.43 billion, in what is the first telco consolidation in Singapore’s history.

 

The sale has been widely anticipated by market watchers, as telcos here are facing downward pressure on revenue from each subscriber due to the rise of mobile virtual network operators offering cheap plans.

 

The $1.43 billion deal, announced on Aug 11, factors in cash and debts and is subject to post-completion adjustments.

 

Speculation had centred on StarHub instead of Simba as the likely buyer until the announcement.

 

A Keppel spokesperson said that business remains as usual at M1, with no disruption to its offerings and services, while the deal is pending approval by the Infocomm Media Development Authority.

 

In an analyst briefing on Aug 11, Keppel chief executive Loh Chin Hua said it is too early to tell if retrenchments are needed, reiterating that M1 is already a streamlined, efficient entity with the least overlap with Simba.

 

M1 and Simba did not reveal how many employees they hire at present.

 

“The proposed landmark transaction is expected to benefit Singapore’s telecommunications sector and consumers through market consolidation and harnessing synergies between two of the nation’s agile and digitally driven telcos with strong track records for innovation,” Keppel said in a statement.

 

“It brings together M1’s digitally transformed, cloud-native network with its ability to deliver hyper-personalised services through an advanced tech stack, and Simba’s innovative digital consumer model.”

 

Simba has more than one million mobile subscribers as at December 2024.

 

Singtel commands half of the total number of mobile subscribers here, with 4.5 million customers; while StarHub and M1 have about two million subscribers each.

 

Keppel said Simba put forward the strongest bid among interested parties, with a compelling all-cash offer at an attractive valuation. Simba and M1 also have the least overlap in resources, which Keppel said is expected to create further revenue pools and career opportunities.

 

M1 chief executive Manjot Singh Mann said Simba’s and M1’s business models are significantly different in terms of subscription plan, retail footprint and approach to customer care.

 

For instance, M1 has rolled out its dedicated 5G network, while Simba is still rolling out its 5G network. These differences make for more revenue opportunities under one combined entity, he said.

 

Analysts said the consolidation of four mobile network operators into three could reduce the pressure to undercut one another on price. But the emergence of a stronger Simba-M1 could further threaten Singtel and StarHub’s grip on the Singapore market.

 

Consumers, on the other hand, are hoping that prices remain affordable and services, reliable.

 

One M1 customer and business owner in his 50s, Mr Tang S.K., said: “Simba must continue to be reliable and… provide good deals.”

 

Keppel will receive nearly $1 billion in cash proceeds for its 83.9 per cent effective stake in M1.

 

The global asset and real-estate manager will retain M1’s fast-growing enterprise business, which will complement Keppel’s connectivity business involving data centres and subsea cables.

 

It hopes to conclude the transaction in the next few months.

 

Approval from Keppel shareholders is not required, as the relative figures from the proposed transaction do not exceed 20 per cent of Keppel’s net asset value, profit before tax and market capitalisation.

 

Approval from Simba shareholders is also not required for the deal, Keppel added.

 

Simba is owned by Australia-listed telco Tuas.

 

Keppel said it intends to use the cash to invest in growth opportunities, lower the company’s debt or reward shareholders.

 

The transaction represents an implied valuation of 7.3 times enterprise value to earnings before interest, taxes, depreciation and amortisation (Ebitda).

 

M1’s operations, excluding the businesses that Keppel intends to retain, recorded revenues of $806.1 million and Ebitda of $195.4 million in the fiscal year ended April

 

Keppel said: “The proposed divestment is in line with Keppel’s strategy as an asset-light global asset manager and operator, and will sharpen the company’s focus within its connectivity segment on digital infrastructure.”

 

The divestment will result in an accounting loss of $222 million, over the target assets’ book value, computed on a pro forma basis, Keppel estimated. This assumes the proposed transaction had been effected on June 30.

 

Despite the accounting loss, Keppel said the divestment “crystallises value from Keppel’s investment in M1 over the years”.

 

Keppel expects to receive more than $700 million in cumulative cash, after considering its initial investment in M1 in 1994 as one of its founding members and the subsequent privatisation of the telco in 2019, as well as dividends and divestment proceeds from 1994 to 2025.

 

Shares of Keppel were halted from trading on Aug 11 before the announcement. They closed down 0.8 per cent at $8.58 on Aug 8.

 

Simba’s parent Tuas said the acquisition will be funded by a mix of existing cash, equity raising and $1.1 billion in fully underwritten bank debt financing.

 

The equity raising of about A$416 million (S$348.2 million) comprises an institutional placement of about A$366 million and a share purchase plan for eligible shareholders totalling up to A$50 million.

 

In the Aug 11 analyst briefing, Keppel chief finance officer Kevin Chng said the accounting loss was primarily driven by “goodwill and intangibles”.

 

He added that the attractiveness of the transaction lies in not just the amount, but also in freeing up cash to make investments, reduce debt or reward shareholders.

 

Responding to queries, a Singtel spokesperson said the telco is assessing the implications of the proposed transaction, and pledged to continue its investments in technology to better support customer needs.

 

StarHub, on the other hand, hailed the Simba-M1 deal as a development that could bring greater stability and opportunities for innovation.

 

Both StarHub and Singtel did not respond to questions on whether they made an offer for M1.

 

 

[Source: here]

 

[sphere]

The highs and lows of M1: From bright beginnings to delisting and proposed sale

Keppel said it would sell M1's telecom operations to fellow telco Simba for S$1.43 billion.

The M1 shop at Peranakan Place closed in January 2024. (Photo: Facebook/M1)

 

SINGAPORE: When M1 launched in 1997, the telco's popularity grew quickly – within a month, it had captured 10 per cent of the market share, or 35,000 subscribers.

 

The company, which started life as MobileOne – a consortium formed by Keppel, Singapore Press Holdings (SPH), Cable & Wireless and Hong Kong Telecom – was the second telco in Singapore.

 

Its market share ballooned to a third in the next five years, with about 1 million subscribers. It launched an initial public offering and listed on the Singapore Exchange (SGX) in 2002.

 

The company was valued at between S$1.2 billion and S$1.5 billion then, making it the biggest share offering since 1999.

 

But it has not always been smooth sailing for M1, as it struggled with increased competition.

 

On Monday (Aug 11), Keppel announced that it would sell M1's telecom operations to Simba Telecom for an enterprise value of S$1.43 billion (US$1.11 billion).

 

M1 currently has 13.5 per cent of Singapore’s prepaid mobile market, 23.9 per cent of the postpaid mobile market and 15 per cent of the broadband market, according to a regulatory filing on the Australian Securities Exchange by Simba’s owner Tuas.

The company made significant inroads in its first two decades of service.

 

In 2005, M1 launched consumer 3G services – the first operator in Singapore to do so. That same year, Malaysian telecommunications conglomerate Axiata bought a 12.1 per cent stake in the company for S$260.8 million.

 

Over the next few years, it became the first in Singapore to launch an islandwide wireless broadband service as well as Southeast Asia's first 4G network.

 

M1 shares hit a high of S$3.99 in March 2015, but competition was never far away.

 

StarHub entered the market in 2000 as Singapore's third telco. It was followed in 2016 by TPG Singapore, which would become Simba.

 

The country also opened up to mobile virtual network operators (MVNOs).

 

The competition took its toll, and a year later, M1 shares had almost halved in value. Reuters reported that M1's shareholders – SPH, Keppel and Axiata – had approached China Mobile to sell their majority stake.

 

More reports emerged that Chinese companies . Meijin Energy and China Broadband Capital were preparing to make separate bids for M1.

 

None of those deals materialised.

M1 headquarters at the International Business Park. (Image: Google Street View)

BUYOUT AND DELISTING

By September 2018, M1’s share price had dropped by almost 60 per cent since its high in 2015.

 

That same month, Keppel and SPH offered to buy shares they did not already own in M1. The companies said then the move was to “arrest the decline in M1 shareholder value through a combination of transformational efforts which are expected to take several years”.

 

The deal would allow M1 to cooperate further with other Keppel units and allow SPH to provide digital content through M1’s mobile platform, the companies said. At that point, the companies valued the telco at S$1.9 billion.

 

In December, Keppel and SPH announced their “firm intention” to make a voluntary general offer.

 

By January 2019, the two companies launched an offer to buy out majority shareholder Axiata and gain control of M1. That offer was accepted the following month and Axiata sold its 28.7 per cent stake.

 

It meant Keppel and SPH collectively owned 90.15 per cent of M1’s shares.

 

To be listed on the stock exchange, the total number of shares in a company that is issued to the public must be at least 10 per cent. With M1 no longer meeting this requirement, it was delisted from the SGX in April 2019.

 

In 2020, a joint venture between M1 and Starhub won the rights to build Singapore's two nationwide 5G networks. The other telco was Singtel.

SALE

In its announcement on Monday, Keppel said it would receive S$1 billion in cash proceeds for its stake in M1.

 

Keppel will retain the information and communications technology business, including data centres and subsea cables.

 

The company said it hopes to complete the proposed sale "over the next few months", adding that Simba had submitted the strongest bid among interested parties.

 

Simba is wholly owned by Australia-listed Tuas. In a separate statement, Tuas said it is looking to raise at least A$416 million (US$271 million) through a placement and share purchase plan.

 

The deal is subject to regulatory approval by Singapore's Infocomm Media Development Authority (IMDA). Its considerations include ensuring there is "no significant lessening" of competition.

 

 

[Source: here]

 

[radiusulnar]

Hope for cheaper prices and improved network coverage/speed.