Why is Singtel tapping into the pay TV market?

One of Singtel’s competitors in the mobile industry in Singapore is Starhub. It seems now that Starhub, which monopolises Pay TV in Singapore has a new competitor. Singtel has now ventured into the Pay TV market.

The added revenue stream would be an added benefit for Singtel as the earnings growth in Singapore is slowing down due to the mobile market becoming more saturated. The reason for this is that there are more handsets than the 4.6 million people living in Singapore.

Nevertheless, Singtel would take more than 5 years to break even. “The cost of setting up the service will be more than the earnings,” said Sachin Mittal, an analyst at DBS Vickers Research. If this be the case, why is Singtel breaking into this market? If they do break even , would Starhub customers switch to Singtel? Will they try to force Starhub out of the market through clever marketing? Will they provide a mobile cum Pay Tv package that is cheaper than Starhub’s and would this eventually lead to Starhub losing its mobile phone customers in the process?