SMRT Gets Into Telco Business

SMRT busIn the news yesterday is about SMRT’s bid, jointly with OMGTEL Pte Ltd (OMG), to become Singapore’s fourth wireless telecommunications carrier. Yes, that means they want to become a telco. My first thoughts, SMRT hasn’t got a handle on their train problems, and yet here they are wanting to go into a new industry. What in the world are they thinking?

I’m not sure exactly what SMRT’s involvement in the partnership will entail. The one part that is pretty clear is that SMRT will be offered the opportunity to invest up to S$34.5M in OMG’s shares.

SMRT’s disclosure to SGX adds that they will collaborate with OMG for the provision of services and/or goods between them and seek to leverage on synergies that can be derived from SMRT’s media presence and commuter reach.

Does that sound like advertising? I had imagined that SMRT’s involvement, apart from simply investing money, would have been a lot more concrete in terms of the core business of a telco. Perhaps the MRT tunnels and aboveground rail system would be used as infrastructure to carry telecommunication cabling.

A wireless telco will need physical infrastructure, not just for the siting of cellular towers, but also cabling across the island. In principle they could leverage on OpenNet, but I somehow don’t think that would be the most desirable option. Furthermore, I imagine any dependence on SingTel and StarHub would be even less desirable.

Perhaps a thought foremost on everyone’s mind is whether SMRT’s new venture will distract them from their core business. In the public’s mind, SMRT’s core business is to provide public transport. This includes trains, buses, and taxis. However, we know they’ve since gone into numerous other businesses, like retail, media, and advertising.

I hope SMRT doesn’t lose sight of their core business. If they have S$34.5M, why not invest in their trains and buses? Oh, right, the returns-on-investments isn’t so good.

If SMRT does successfully get involved to become the fourth telco in Singapore, I hope they will not offer a mobile phone service plagued with signal faults, packet delays, power trips, and a myriad of other problems.

Honestly, I’d rather they fix their trains, and improve their bus services.

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