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

News analysisM1-Simba deal collapse: A setback for consolidation, but not necessarily for Keppel or consumersSign up now: Get ST's newsletters delivered to your inboxThe sale of M1 to Simba was first announced in August 2025. The deal was valued at about $1.43 billion.

ST PHOTO: BRIAN TEODavid GeraldPublished Jun 22, 2026, 05:00 AMUpdated Jun 22, 2026, 05:00 AMSINGAPORE – 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 shareholdersAt 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 questionWhile 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.

More on this topicSimba’s parent company Tuas terminates deal to buy shares in M1Limited choices, slower customer service among key consumer concerns amid telco restructuringConsumers 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 consumersFrom a consumer standpoint, the immediate effects are likely to be positive because fou