First Article of 2021 - The Replacement of OCBC Bank is Singtel

This is a continuation of the previous post.

The replacement of OCBC is Singtel.

The joke is on me. Many months ago, for those that asked me about Singtel, I will tell them I do not like it. The main issue is cash burn in the future and the “traditional” management. But recently a friend changes my thinking and it kept me thinking on all the future possibilities. 

Basically, in my opinion, the opportunities exceed its own weaknesses

Thus, let me get into the reasons.

1. Digital Banking

Grab-Singtel JV (GSJV) has been awarded for the full digital banking license. Singtel has a 40% stake in the S$1.5bn entity (around at least S$600million outlay from Singtel).

Recently, I have a deep discussion on the Fundamental Scorecard Telegram Group on Digital Banking. Basically, I commented that Google Pay as an aggregator will be a major competitor against Digital Banking – and there were a lot of explanations stating that this is a wrong.




Part of the conversation as showed above (Many Gurus are in my Telegram group, if you are interested in joining, google Fundamental Scorecard Telegram Group and join us!)

So – as explained above, I should not mixed Digital banking and payments together. In fact, additional payments aggregator could be an advantage to digital banking. While payment is only 1 aspect of digital banking, there are many other aspects such as eWallets, insurance, lending and investing that can be explored further. 

As explained by the CEO of GSJV in this article, “…Customers from multiple segments, including the underserved and underbanked, will be able to have their financial needs met seamlessly, powered by our next generation cloud technology and data platform.”

All in all, an ex-colleague once told me this, “We don’t know what we don’t know”, and I shall use this sentence to explain the potential of digital banking.

2 years ago, Cashless was still such an ambitious project in Singapore. Look at where we are now.

How about eWallets with interest to be earned? Will there be a consolidation of Cash from different eWallets going into the GSJV account?

2. Proxy of Grab

I think, without a doubt, Grab has become one of the major tech giants in Singapore. Many of us has its app in our HP for food delivery or transport. It was able to take market share from ComfortDelgro and other disruptors such as Uber and Foodpanda. 

Then, it even expands overseas into the SEA as well as into the financial industry with Grab Financial Group. 

As per the previous article, it stated that “the digital bank is a natural extension of the Grab Financial Group as well as the mobile financial business of Singtel, with the aim of enabling wider access to financial services. It will also draw on the combined experience of both companies in having already built a successful regional fintech ecosystem in highly regulated environments, offering digital financial services across payments, insurance, lending and investing.”

With such an innovative and disruptive business model, the company will continue to strive and become a GIANT within the SEA.

However, since Grab is a private company, it is impossible for the regular folks to make any investment into them.

Thus, I see that investing in Singtel also as a proxy of investing in Grab.

3. TAM - Grab & Singtel Network Effect 

Do note that this TAM is not just a number but a group of customers that has a high probability to be converted into GSJV customer.

Grab users – 187 million users (around the world)

Singtel Subscribers – 705 million users (around the world) 

Singtel Singapore Subscribers – 4.3m mobile users + 0.6m boardband subscriber

Singtel Dash Users – 1m 

Imagine if Singtel provides a discount for all Singtel subscribers who opens an account with GSJV and pay using GSJV in Singapore, that could immediately mean that at least 1m account holders!

4. 5G 

It is not only GSJV that made me interested in investing in Singtel. But the growth prospect within Singtel core business is exciting.

For those that know me, will know that I believe 5G is the major trend moving forward. It will accelerate the adoption of many other sub trends like IoT, Connected Cars and Cloud computing.

Huge adoption of 5G is expected to be in 2 to 3 years’ time. Apple has already created a 5G smartphone. China and Japan are already started to use 5G/or have 5G trial. 

Singtel being the major telco provider in Singapore and SEA will definitely be able to gain significant headway into getting 5G to their customers – individuals and enterprise. The emphasis on 5G is also stated in their Jun 2020 Agm.

In my opinion, I used to think M1 will be the first to adopt 5G. But since being acquired by Keppel, I feel that they have gone back to basic. On the other hand, I have been watching a lot of Singtel 5G ads lately. Have not really seem any Starhub 5G ads? If anyone did, do comment here.

On the other hand, some may argue the cashburn for 5G is huge. But in my opinion, do note that Singapore has already laid its fibre network all around Singapore and this cashburn is (highly possible) through Netlink Trust. At most, Singtel just need to attach the tower/5G transmittor on top of the fibre cable laid around Singapore. This outlay is not as significant as the initial fibre layout.

Thus, with the above pointers, I foresee Singtel to possibly gain more in the next few years from this 5G trend. 

5. Change in CEO and Management Team

One of the major negatives I have against Singtel is the previous CEO and Management Team. They seem to be out of idea when it comes to the future. I remember they once recommended listing their loss-making digital arm as a form of returns to shareholders (Can no longer find the article, does anyone still have it?)

Since then, in the 4th quarter of 2020, Singtel has went on to change its CEO and restructure its business and management.

Mr Yuen Kuan Moon, currently the CEO of Singtel’s Singapore Consumer Business and the Chief Digital Officer, becomes the CEO.

As of 31 Dec 2020, Singtel continued to announce changes to its business structure as well as some of its management team.


All in all, it seem like Singtel is starting to embrace digitalization is a huge way and this will definitely push their business to greater heights in the future.

That's all on the replacement - Singtel!

With that I will like to wish everyone a Happy New Year!

**I Will Be Having A FB Live with JR_Chai to discuss on the uncertainty on OCBC at night on 4 Jan 2021. More information will be provided in due time!

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