On 23 September 2026, StarHub Ltd (SGX: CC3) and Keppel Ltd (SGX: BN4) confirmed they are in discussion over a possible deal involving M1.
However, both companies stressed there is no certainty the talks will progress or that a deal will result.
No definitive agreement has been reached, and terms were not disclosed.
Any deal would also require regulatory approval; this is a potential transaction, not a completed one.
The talks follow the collapse in May 2026 of Keppel’s planned sale of M1’s telecom business to Simba on regulatory grounds.
With Keppel still looking to divest M1, it’s time to evaluate the potential consequences of a M1-StarHub tie-up.
Could M1 strengthen StarHub and could a sale finally unlock value for Keppel?
| Category / Metric | StarHub Ltd (SGX: CC3) | Keppel Ltd (SGX: BN4) |
| Primary Industry | Telecommunications | Asset Management, Infrastructure & Energy |
| 1H2026 Revenue | Mobile Service Revenue: S$245.3 million (down 10.5% YoY) | Total Revenue: S$3.81 billion (up 25% YoY) |
| 1H2026 Earnings / Profitability | Group EBITDA: S$158.6 million (down 23.8% YoY) | Net Profit (New Keppel Core): S$530 million (up 25% YoY) Overall Net Profit: S$154.7 million (after legacy asset accounting losses) |
| 1H 2026 ARPU / Returns | Mobile ARPU: S$20 (flat YoY) | Return on Equity (ROE): 15.0% |
| 1H 2026 Liquidity / Cash Flow | Cash Position: S$515.7 million Free Cash Flow: S$40.6 million | Free Cash Inflow: S$570 million Asset Monetisation (YTD 2026): ~S$1.7 billion |
Why Is M1 Back on the Table?
In August 2025, Keppel agreed to sell its 83.9% effective stake in M1’s telecom business to Simba, valuing the business at around S$1.43 billion including debt.
Keppel expected to unlock nearly S$1 billion in cash from the sale.
On 18 May 2026, Infocomm Media Development Authority (IMDA) suspended its review after finding a potential regulatory breach at Simba.
Keppel subsequently let the deal lapse at its 21 May deadline.
Since then, Keppel has run an efficiency drive at M1 to lift its value before any future deal.
Why Would StarHub Want M1?
Put StarHub and M1 together and the combined business would be bigger, with more leverage over suppliers.
The combined entity could save money by merging overlapping networks, technology platforms, shops, and corporate office functions.
Starhub’s own numbers show the pressure of competition on its standalone business.
In the first half of 2026 (1H2026), StarHub’s mobile service revenue fell 10.5% from a year earlier to S$245.3 million, even though average revenue per user (ARPU) was flat at S$20.
Group EBITDA shrank to S$158.6 million, down 23.8% year on year (YoY), while the service EBITDA margin softened to 20.0% from 25.1% a year ago.
What Could the Deal Mean for StarHub?
DBS Group Research estimates a StarHub-M1 combination could potentially generate around S$70 million in annual recurring synergies by FY2029 through greater scale and a larger customer base.
Furthermore, this consolidation could improve the combined entity’s margins.
That said, the challenges are real too.
The purchase price will likely determine if the deal creates or destroys value.
StarHub had only S$515.7 million in cash as at 30 June 2026, and its free cash flow (FCF) for the first half was just S$40.6 million.
It may therefore have to raise equity or issue shares directly to Keppel to fund the purchase.
Finally, integration costs could be meaningful, and M1 operates in the same difficult market.
What Could the Deal Mean for Keppel?
For Keppel, this is another opportunity to monetise a non-core asset which it has already tried to sell once.
Keppel’s broader strategy had previously targeted S$2 billion to S$3 billion of non-core asset monetisation in 2026.
Keppel could utilise the potential cash proceeds from the M1 deal to support its asset-light strategy by reducing debt, funding growth or even shareholder returns such as buybacks and dividends.
A price materially below the old S$1.43 billion Simba benchmark would raise fair questions about how much value Keppel is actually extracting.
The Bigger Question: Can a StarHub-M1 Combination Improve Singapore’s Telco Economics?
With one fewer operator, there would be less duplicated infrastructure and, in theory, better economics for the whole industry.
However, regulators will scrutinise any deal, as the Simba episode showed.
Merging two networks is also hard work, and competition could stay fierce with three players instead of four.
Consumer pricing could also change.
Whether the industry ends up better off depends on the terms and on what conditions regulators attach.
What Should Investors Watch Before Buying Either Stock?
For StarHub, the acquisition price and how the deal is funded are important.
Furthermore, investors have to monitor whether synergies are actually being realised, whether integration costs are ballooning, and if operational trends (mobile customers and ARPU, EBITDA, and FCF) are improving post-deal.
Finally, any potential impact on StarHub’s dividend policy is something to monitor as well.
For Keppel, the final transaction value and whether cash proceeds are paid in cash or in StarHub shares.
Following the completion of the transaction, watch how the asset manager deploys the capital.
In all, the terms of the deal matter for both companies.
Get Smart: Watch the Price, Not Just the Deal
A StarHub-M1 combination could meaningfully reshape Singapore’s telco landscape, and both companies have real strategic reasons to want it.
For StarHub, the question is whether the price and funding structure let shareholders actually capture the synergies DBS has estimated.
For Keppel, the test is whether a sale finally brings in a price that justifies the wait and moves it further toward an asset-light model.
Until terms are announced, there is little to judge.
The price, how StarHub funds it and whether the promised synergies show up in operating performance will decide most of the outcome.
Some companies cut dividends in a downturn. These 5 didn’t.
Find out which Singapore blue chips have weathered past chaos…and why they could be your portfolio’s anchors in the next wave of downturn. Download the report free.
Follow us on Facebook, Instagram, Telegram and YouTube for the latest investing news and analyses!
Disclosure: Wilson H. does not own shares in any of the companies mentioned.
