Keppel's Strategic Shift in 5G: Assessing Investment Implications in APAC Markets

The telecommunications landscape in Asia-Pacific (APAC) is undergoing a seismic shift, driven by 5G adoption and spectrum reallocation. Keppel's recent strategic maneuvers-particularly its divestment of M1 Limited's telco business to Simba Telecom and its unresolved legal disputes with Liberty Wireless-offer critical insights into the investment dynamics of 5G infrastructure. This analysis evaluates the implications of these moves, focusing on spectrum access, regional partnerships, and the broader APAC telecom ecosystem.

Strategic Divestment and 5G Synergy

Keppel's decision to sell its 83.9% stake in M1's telco business to Simba Telecom for S$1.43 billion underscores a deliberate pivot toward asset-light operations and digital infrastructure, as Keppel said it would unlock close to S$1.0b. The transaction, expected to generate S$1.0 billion in cash proceeds, aligns with Keppel's long-term strategy to focus on high-growth areas like data centers and subsea cables, according to the S$1.4 billion sale announcement. By offloading M1's mobile operations, Keppel retains its ICT business, which includes enterprise 5G solutions and cybersecurity services, while enabling Simba to accelerate 5G deployment in Singapore.

The merged entity, combining Simba's digital consumer model with M1's cloud-native network infrastructure, is poised to enhance Singapore's 5G leadership. According to the Singapore Telecoms Industry Report 2025, the APAC region is projected to reach 1.4 billion 5G connections by 2030, with mid-band spectrum (particularly the 3.5GHz band) critical for achieving coverage and capacity balance. Simba's current 5G outdoor coverage already exceeds 90% in Singapore, surpassing its 2023 target of 60%, and its cost-competitive data plans with roaming access to 60+ APAC countries position it to capitalize on cross-border demand, as evidenced by Simba's subscriber growth.

Legal Disputes and Partnership Uncertainties

While Keppel's partnership with M1 is transitioning smoothly, its relationship with Liberty Wireless remains contentious. A 2019 contract dispute, exacerbated by Singapore's 2020 mobile services framework, has led to legal proceedings. Though no direct APAC expansion plans with Liberty Wireless are evident in 2025, the legal friction highlights risks in cross-border telecom collaborations. Separately, Keppel's ongoing arbitration with Seatrium over S$68.4 million in indemnity claims-linked to Brazil's Operation Car Wash-exposes broader corporate governance challenges, as highlighted in the arbitration demand. These disputes, while not directly tied to 5G, underscore the importance of contractual clarity in high-stakes infrastructure deals.

APAC 5G Expansion and Spectrum Access

Simba's 5G strategy in APAC hinges on mid-band spectrum access, a trend mirrored across the region. Countries like South Korea and Malaysia have prioritized the 3.5GHz band for 5G, enabling high-speed urban connectivity and smart city initiatives, as noted in APAC 5G midband spectrum. In contrast, markets such as Thailand and Indonesia lag in C-band allocation, creating disparities in 5G performance. For Simba, securing additional mid-band spectrum will be vital to maintaining its competitive edge against Singtel and StarHub.

Keppel's broader APAC ambitions extend beyond Singapore. Through its AsiaPac division, the company is acquiring ICT firms in Malaysia and Vietnam, deploying 36 enterprise 5G use cases, and replicating these models regionally, as Keppel eyes regional expansion reports. A partnership with Amazon Web Services (AWS) further strengthens its data center and subsea cable capabilities, critical for supporting 5G-driven AI and IoT applications, a move also noted in the USD 1.1bn sale.

Investment Implications

The APAC 5G market, projected to grow to USD 259 billion by 2030, presents significant opportunities for players like Simba and Keppel. However, risks persist:
1. Spectrum Costs: Mid-band spectrum auctions in APAC are becoming increasingly expensive, with operators like Simba needing to balance investment with pricing competitiveness.
2. Regulatory Hurdles: Regulatory approval for the M1-Simba merger remains pending, and spectrum allocation policies vary across APAC markets.
3. Legal Exposure: Keppel's arbitration with Seatrium and its disputes with Liberty Wireless could divert resources from core 5G initiatives.

Despite these challenges, the strategic alignment of Keppel's asset-light model with APAC's 5G growth trajectory offers long-term value. The divestment of M1's telco business not only unlocks liquidity but also positions Keppel to reinvest in high-margin digital infrastructure, a sector expected to grow at 12% CAGR through 2030, according to 5G Growth in the Asia-Pacific Region.

Conclusion

Keppel's strategic shift reflects the evolving priorities of APAC telecom players: leveraging 5G as a catalyst for digital transformation while navigating regulatory and legal complexities. The M1-Simba merger exemplifies how consolidation can accelerate infrastructure optimization, but success will depend on spectrum access, cross-border partnerships, and the resolution of outstanding disputes. For investors, the APAC 5G ecosystem remains a high-reward arena, provided companies like Keppel and Simba can balance innovation with operational resilience.