CNA Explains: What could happen to Simba customers if IMDA takes action against alleged unauthorised spectrum use?

However, in a “worst-case scenario”, Simba’s licence could be revoked, and it may need to close down, said Mr Lee.

“If the company is solvent enough, it could refund customers and wind up the company. If it is not, it could go into liquidation,” he added.

“In that situation, customers who have paid money into their accounts may not necessarily recover everything. Depending on what happens in the liquidation, they may recover only part of what they are owed.”

He emphasised that such a scenario was unlikely and that there was “no real precedent” for it. 

What about customers of other telcos?

Customers of other major telcos could also feel the effects if Simba were forced to stop operating.

If a large number of Simba subscribers moved to Singtel, StarHub or M1 over a short period, the additional load could put pressure on their networks and potentially cause congestion for existing customers, Mr Saifee said.

Mr Saifee said competition in Singapore’s mobile market was at a “very elevated level”, driven to a large extent by Simba’s cheaper plans.

“So if there is some rationalisation in the market, in terms of either consolidation or Simba exiting the market, then we should expect to see some improvement in competition, either in terms of higher pricing or telcos cutting down on data quotas and things like that,” he added.

He said that such consolidation and price rationalisation have been due for quite some time, and it should happen irrespective of consolidation or Simba exiting the market.