Something unusual has been happening in the mobile space in Singapore.
Usually, when one mobile operator cuts prices or bumps up its amount of free mobile data, the others will follow suit. The idea is to avoid having customers jump to rival operators.
Yet, a month after Circles.Life shook things up with a plan that offered a huge boost in data, the Big Three players have not followed suit.
Singtel, M1 and StarHub, which own most of the market, haven’t decided it was worth matching Circles.Life’s deal for an attractive 26GB of data for just S$48 a month. Aren’t they afraid of losing customers?
Sure enough, there have been savvy users who have jumped over. The challenger’s no-contract deal is even more logical given that people can take it up without worrying about being tied down to a two-year deal.
That, however, negates the fact that many users are still tied to a contract. Or that some still prefer to get a contract to buy the latest phones at a discount.
Do the sums and usually a no-contract subscription, which costs half the usual price at times, is cheaper if you buy the phone at its retail price. However, many users have been used to paying, say, S$300 to S$400 for a top-end flagship instead of the full S$1,000 or so.
It’ll be interesting to see how much operators will subsidise the new Samsung Galaxy S8, for example. It’s true low-cost yet high-quality budget phones are enabling people to get hold of great devices without spending top dollar, yet not many match the attractiveness of the new Samsung flagship.
So, like it or not, a segment of the market is still used to the subsidy-for-phone subscription deal. And as long as there are flagship phones that Singaporeans crave, the Big Three telcos will continue to tie people in with possibly less attractive deals.
That’s also not mentioning the market power they have together. If one of the three makes a move, it is likely the others will follow suit. That’s been proven in the past, even when prices are upped.
However, Circles.Life is a virtual operator that has a lot less of the market. Plus, it depends on M1 for its network connectivity, so part of every dollar it earns goes to M1 as well.
The three telcos may also be calculating that Circles.Life has its eyes on a regional market rather than making Singapore its bread and butter.
The company’s digital software used to run a telco’s operations has been exported overseas as well, so there could be a feeling that could be its main play rather than fighting tooth and nail for the consumer here in the long term.
Perhaps more likely, the incumbents are saving their ammunition for the true fourth telco, TPG Telecom, to arrive in 2018. Unlike Circles.Life, it will build its own mobile network. So, why show your hand when there’s a high roller in the room just about to join the fray?
In the past 18 months, in the lead-up to the bid for the fourth telco, the Big Three have raised their game as well, bringing in more flexible deals as well as cheaper roaming deals. They also have an incumbent’s advantage – knowing their customers.
All these years of interacting with them surely must have informed these telcos what has to be done. Whether they do it well is another matter, of course, but a lot will be riding on customer service and convenience.
I experienced this first-hand this week. Helping my father re-subscribe his StarHub cable TV and fibre broadband bundle on Thursday, I got a deal that was close to what I could get from getting a separate fibre offer from M1.
This was only possible with a monthly discount for TV channels as well as three months off the basic bundle subscription, as part of an ongoing StarHub promotion to make the deal competitive.
This meant I didn’t have to worry about the hassle of arranging for separate contractors to come set up the fibre broadband, port over the land line number to a new operator and inform my parents they are getting separate bills in future.
But the most important was how smooth the process was. The appointment to set things up was just two working days later. Compared to the long waits I’ve had in the past, not just with StarHub but other telcos as well, this was a sea change.
Competition is great for consumers. For telcos, customer loyalty could make a key difference as the fight for a saturated market really gets going soon.