Tuas: The M1 Deal Is Dead. Now What Do You Do With $489 Million?

Strong FY26 numbers, a lapsed acquisition, and a brand-new cybersecurity bill — SIMBA's standalone future starts with a war chest and a regulator watching.

TUA.AX · Earnings Call · 2026-09-22

The Deal Ends, But Not With a Bang

For eighteen months, Tuas Limited — through its operating entity SIMBA Telecom — was the upstart Singapore telco trying to buy rival M1 and rewrite the island's mobile map. On the FY26 call, that story closed. The M1 acquisition hit its contractual long stop date on 21 May 2026 without regulatory clearance, after IMDA had suspended its review of the consolidation application pending an investigation. CEO Richard Tan put it plainly:

Because the sales and purchase agreement reached its contractual long stop date of 21 May 2026 without regulatory clearance, the transaction lapsed and did not proceed. Regarding regulatory compliance, SIMBA has been fully cooperating with the IMDA investigation.
Richard Tan, CEO · 2026-09-22

This is a striking reversal from where the company stood just two quarters ago, when management told investors the M1 announcement itself had become a demand driver. On the March call, Richard said momentum was strong “in part... it was due to our announcement of the M1 acquisition because people are seeing us in different light.” — Richard Tan, Chief Executive Officer · 2026-03-24 On this call, Morgan Stanley's James Bales asked directly whether that brand benefit had unwound. Richard's answer — “The brand continues to be very, very strong... we continue to also invest in the brand” — Richard Tan, CEO · 2026-09-22 — is now an assertion to be tested, not a given. And yet, the underlying business is not in trouble. Revenue rose 24% to $187.6 million, underlying EBITDA climbed 22% to $83.7 million, and net profit after tax jumped to $29.6 million from $6.9 million. EBITDA margin held steady at 45% of revenue. Subscribers reached ~1.4 million (+16%), a roughly 15% mobile market share, with ~62,000 broadband services added. The problem is not the P&L; it's the balance sheet and the regulator.

The New Line Item Nobody Had Priced

What killed the deal is also what now costs money. IMDA designated SIMBA a critical information infrastructure operator in September 2025, and shortly after, the Ministry of Digital Development and Information publicly disclosed that all four Singapore telcos had been targeted by advanced persistent threat groups. What was an M&A approval condition has become a standing threat that management must fund every year.

The cybersecurity framework is also an evolving framework and the threats are also by definition evolving, and there is AI happening in the background, which makes obviously the threats more sophisticated. So based on the overall evolving landscape, we definitely need to do what is necessary to meet the evolving threats.
Richard Tan, CEO · 2026-09-22

The company is guiding to $15–30 million of incremental CapEx and OpEx in FY27 specifically for cybersecurity compliance — a range Tan calls "very, very comfortable" but refuses to split between CapEx and OpEx, and refuses to characterize as one-off. Analysts pressed hard on this. The honest read: this is a recurring, rising cost of doing business under heightened regulatory scrutiny, not a blip. Separately, a genuinely odd disclosure surfaced in Q&A around spectrum use. Company Secretary Tony Moffatt confirmed SIMBA used permitted spectrum outside its licensed limitations — “there was some use of spectrum that was permitted by the IMDA and we then use it outside those limitations” — Antony Moffatt, Company Secretary · 2026-09-22 — a combination of software and hardware factors, now fixed. That detail sits uncomfortably beside the IMDA investigation and explains why the regulatory relationship is the swing factor in this equity.

Growth Cooling, Cash Warming

Q4 subscriber momentum decelerated, and management attributed it to two things: rivals “mimicking our plans” — Richard Tan, CEO · 2026-09-22 and “increased termination of SIMs arising from SIMs that were used for scam activities.” — Richard Tan, CEO · 2026-09-22 The scam-SIM churn is not a one-off — Tan says scammers "will always find ways," making it a persistent friction on net adds. Against a competitive market, quality is the moat: SIMBA scored 909/1000 on Opensignal's reliability metric (second in market) and 96.2% on Speedtest consistency. Management leans on network quality and densification — running 5G on the 2100 and 900 MHz bands — rather than more spectrum, and flagged enterprise and SME as the broad-based growth vector for FY27. The real question is capital. Opening cash and term deposits of $80.7 million became $488.8 million after raising $316 million to fund a deal that no longer exists. That is a large idle pile for a $1.2 billion market-cap company. Asked about it, Tan was non-committal: “It's a matter for the Board to decide, but obviously, any good opportunities that come our way, we will raise it to the attention of the Board.” — Richard Tan, CEO · 2026-09-22 Management insists it isn't barred from future consolidation, but “there's nothing that's happening at this stage that would lead us to a view that was likely to happen in the near term.” — Antony Moffatt, Company Secretary · 2026-09-22

The Takeaway

Tuas is a profitable, cash-generative, quality-led challenger that just lost its transformational deal and gained a regulator-sized liability in exchange. The standalone CapEx guide is unchanged at $50–55 million, but the cybersecurity mandate compounds on top. The global tape offers little comfort on the sector: network infrastructure-exposed telcos have been volatile, with "mobile network operator" names swinging sharply between the 90-day and 30-day windows. For Tuas, the next catalyst is binary and external — an IMDA announcement that management admits it has no visibility on, and a capital allocation decision that, for now, has no deal to absorb it.