Does Singapore have too many telcos?: Page 2 of 2

The fourth telco reality
Does Singapore have too many telcos?: Page 2 of 2In February, industry regulator the Infocomm Development Authority of Singapore (IDA) decided to allow a fourth telco in Singapore for its upcoming spectrum allocation auction.
The market seems primed for a shakeup, and the analysts DNA spoke to agreed there will be one, but also say that the biggest loser would be the incoming fourth telco.
“Currently, the mobile penetration rate in Singapore stands at approximately 160%, and ABI Research does not foresee any rapid growth of unique customers in the future,” says Su (pic).
“Throwing in a fourth telco and an MVNO will only make the current market even more crowded.
“An MVNO will no doubt affect the fourth telco, as both companies would be targeting the same segment of unique customers that are disgruntled with the current three incumbents,” he adds.
Frost & Sullivan’s Quah agrees. “If the segment chosen by the MVNO overlaps with the fourth telco, it will be in direct competition with the fourth telco,” she says.
“However, the MVNO would have a slight advantage assuming it was able to negotiate the right transfer pricing with its host [in Circles.Life’s case, with M1].
“This is because the MVNO’s services would already be there from Day 1 and would have already been experienced by Singaporeans, whereas the fourth telco will take some time to build up its service.
“This lead may result in a lock-in of subscribers by the MVNO, reducing the available target market for the fourth telco,” she adds.
Forrester’s Teo, however, was more pessimistic and cautions that a price war would only leave losers in its wake.
“But … a superior customer experience will help differentiate players – that is, going into a price war will leave everyone losers, but creating a holistic and superior customer experience will retain loyal subscribers and attract new ones,” he says.
Circles.Life appears to be avoiding any price war, with its plans priced in between current offerings by the incumbents.
Should subscribers be too entrenched with incumbents, Su believes that there are other opportunities that both the fourth telco and an MVNO can explore, besides the consumer segment.
“They can look beyond unique customers and expand their services for the Internet of Things (IoT) that includes smart metering, telematics, the smart industry, robotics and mobile health,” he says.
“My Evolution is a good example – the Malaysian MVNO offers M2M (machine-to-machine) communications as a service, covering retail and payment, transport and logistics, utilities, the public sector, and others,” he adds.
And the incumbents go …

Does Singapore have too many telcos?: Page 2 of 2

It does not promise to be an easy year for Singapore’s telco incumbents – there is the spectrum reallocation, the potential entry of a fourth telco, and now, the actual entry of an MVNO.
Singapore Telecommunications Ltd (Singtel) and M1 had yet to respond to DNA’s request for comments, but StarHub Ltd says it believes that its offerings are innovative and cater to what the market wants.
“Since StarHub’s beginning in year 2000, we have been offering innovative services to attract customers and to build loyalty,” its chief marketing officer Howie Lau says in an official statement.
“Catering to the evolving needs of our customers, we offer one of the world’s fastest 4G networks, quality customer service, value-for-money Hubbing bundles, and a wide variety of mobile service plans,” he adds.
StarHub does not rule out working together with other MVNOs either.
“We are in talks with interested parties which share a common goal to bring value to more customers, especially in niche segments currently outside of our reach,” says Lau.
As Circles.Life’s network operator, M1 is of course supportive of the MVNO as it considers the latter’s subscribers as part of its own subscriber base, according to its 2015 half-year earning’s call.
“We support Circles.Life’s vision of delivering a digital telco experience to customers, and look forward to working with Circles.Life to grow the partnership,” its chief commercial officer Lee Kok Chew said then.
Related Stories:
MyRepublic launches 4G trial in bid to become a carrier
Undeterred, IDA allows for fourth telco in Singapore
M1 doubles up with next-gen 4G network launch
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