Highlights

• Simba received a show cause notice from Singapore's IMDA, with a response due by 16 November 2026.

• The regulator has made no findings, and possible outcomes range from no action to fines or changes to spectrum rights.

• FY26 Revenue rose to S$187.6 million from S$151.3 million, and statutory net profit after tax rose to S$26.0 million.

• Active mobile services reached 1,458,000 at 31 July 2026, up from 1,254,000 a year earlier.

What does a regulatory show cause notice mean for a telco that has just reported its strongest year? For Tuas Ltd (ASX:TUA), owner of Singapore mobile operator Simba Telecom, it means the Investment case now rests as much on the outcome of a regulatory process as on subscriber growth, with a response to the regulator due by 16 November 2026.

The central development

Tuas told the ASX on 26 October 2026 that Simba had received a show cause notice from Singapore's Infocomm Media Development Authority (IMDA). The notice reportedly sets out six allegations.

These include running dynamic spectrum sharing on 2100 MHz spectrum at more than 130 sites in 2022 and 2023, when Simba was licensed to use that band for 5G only, and using the 2340 to 2360 MHz band at more than 90 sites between 2023 and 2026 without authorisation. The IMDA also alleges incomplete compliance with a production order and has raised concerns about Simba's governance and compliance culture.

The IMDA has made no findings. Possible outcomes range from no action to compliance orders, fines capped at the higher of S$1 million or a share of annual turnover, and suspension or cancellation of spectrum rights or the licence. Tuas has said Simba intends to respond and that it will not comment further while the matter is with the regulator.

How the matter developed

The spectrum issue first surfaced in May 2026. On 18 May, Tuas disclosed that the IMDA had suspended its review of the planned Acquisition of M1 from Keppel, following information that Simba may have used frequency bands it was not authorised to use. The deal lapsed on 21 May 2026 without regulatory consent.

Tuas was subsequently removed from the S&P/ASX 200 in the September 2026 quarterly rebalance, effective 21 September 2026.

What Tuas does

Tuas operates Simba, a low-cost mobile network in Singapore, alongside a smaller fibre broadband business. The company was demerged from TPG Telecom in 2020 and is led by executive chairman David Teoh.

Mobile remains the core revenue driver. In FY26, the year to 31 July 2026, mobile revenue was S$167.5 million, up from S$144.6 million. Broadband revenue rose to about S$19.7 million from about S$6.4 million, with roughly 62,000 fibre subscribers at year end.

FY26 results

The operating numbers released on 23 September 2026 were encouraging. Revenue rose to S$187.6 million from S$151.3 million. Underlying EBITDA increased to S$83.8 million from S$68.4 million, while statutory EBITDA was S$80.1 million after S$3.7 million of costs linked to the abandoned M1 transaction.

Statutory net profit after tax rose to S$26.0 million from S$6.9 million, and Diluted Earnings per Share were 4.76 Singapore cents. No Dividend was declared.

Active mobile services reached 1,458,000 at 31 July 2026, up from 1,254,000 a year earlier. Gross mobile ARPU was S$9.42 for the year. Simba upgraded more than 470 sites to improve capacity and 5G coverage.

Balance sheet and cash flow

Tuas ended FY26 with cash of S$479.8 million and term deposits of S$18.9 million. Much of that came from about S$364.5 million in net proceeds from a Placement and share purchase plan originally raised to help fund the M1 deal.

The board has said it has not yet decided how that Capital will be used. Net operating Cash Flow was S$91.3 million, while spending on plant and equipment fell to S$38.6 million from S$54.1 million.

Sector conditions and competitive position

Singapore's mobile market is mature and crowded, with Singtel, StarHub and M1 as the established operators and Simba positioned as the price challenger. Simba's subscriber growth has come largely from aggressively priced plans, which helps explain its relatively low ARPU.

Adding roughly 204,000 active mobile services in a single year suggests that value positioning continues to resonate with Singaporean consumers. The open question is whether Simba can lift revenue per user through new products without eroding the price advantage that drives its growth.

The failed M1 deal would have reshaped that structure by creating a larger player. With it off the table, Simba continues as a standalone challenger, and Keppel's plans for M1 remain a Factor in the competitive landscape.

Costs and obligations ahead

During FY26 the IMDA designated Simba a critical information infrastructure operator, bringing additional cyber security obligations. Tuas expects S$15 million to S$30 million of incremental capital and operating expenditure in FY27 to meet those requirements.

That spending will weigh on margins at a time when the board says its FY27 focus is growing EBITDA through new products. Simba also closed its Goose eSIM Business on 21 August 2026, which the company does not expect to have a material impact.

Risks and what to monitor

The most material uncertainty is the IMDA's eventual decision. A fine at the upper end of the permitted range, restrictions on spectrum use or changes to Simba's licence could affect network capacity, costs and growth.

Investors are also likely to watch for any governance changes in response to the IMDA's concerns, and for disclosure on how the surplus capital will be deployed.

Near-term dates include Simba's response deadline of 16 November 2026 and the Annual General Meeting on 30 November 2026 in Sydney, where shareholders will vote on the remuneration report and the re-election of director Craig Levy. The timing of any IMDA ruling has not been disclosed.

Tuas enters this period with a growing subscriber base, positive Operating Cash Flow and substantial cash. Whether those strengths translate into durable value depends largely on a regulatory outcome that remains outside the company's control.