Keppel and StarHub have confirmed talks are underway over a deal that would see the latter acquire Singaporean telco M1.

Both companies confirmed that discussions are being held via their respective stock exchange filings after an earlier report said that a deal was being negotiated.

Such a deal would represent a consolidation of Singapore's telecoms market, shrinking it from four carriers to three.

M1, which is Singapore's third largest telco, is owned by the Singaporean company Keppel. Keppel first invested in M1 in 1994 as one of its founding investors. M1 went private in 2019.

"The company is in ongoing discussions with StarHub Ltd regarding a possible transaction in relation to M1, but there is no certainty or assurance that any transaction will materialize. The company wishes to emphasize that these discussions are ongoing and nothing definitive has been reached at this stage," said Keppel in its stock market filing.

StarHub, which has an estimated 2.2 million subscribers, put out a similar statement.

Keppel has been looking to shift M1 for a while, as the company continues to "explore opportunities for consolidation."

It is instead looking to focus on its data center strategy, as it owns and operates a number of data centers across Europe and Asia via its Keppel DC REIT and Keppel Data Centers units. Its data center portfolio currently totals 35 facilities across Europe and the Asia Pacific, with 650MW of power capacity.

M1 serves around two million users in Singapore, providing mobile, fiber, and fixed-line services.

Last year the company had agreed a deal with Australian company Tuas, the parent company of Simba, over a sale of M1 for S$1.43 billion (US$1.12bn). However, this deal collapsed earlier this year, amid concerns that Simba had been using ​radio frequency bands that it had not been assigned to provide mobile services. Simba has around 1.2 million subscribers.

Singtel is the largest mobile carrier in Singapore with around 4.5 million subscribers.