By Oo Gin Lee
Have you heard of the Singtel post-paid plan which gets you unlimited talktime and 3GB of mobile data for just $36.05 per month? Or how you can slash your StarHub mobile bill by half - simply by opting for new SIM-only mobile plans which do not come with subsidised smartphones or long contracts.
Over the last few months, telcos here have upped the ante in the ongoing mobile wars by beefing up their SIM-only mobile plans with amazing deals that left me pulling my hair in complete frustration because I still have a year left on my Singtel contract.
In September last year (2015), Singtel launched its SIM-only plans which it describes as “data-centric, contract-free and fully-customisable.” It starts with a basic 3GB of 4G mobile data for $20 per month. You can then add on your “toppings” by opting for more SMS, talk-time and data. Every extra GB of data costs $5.35 per month. Pay just $5.35 per month for 200 minutes of talktime or 1200 SMS, $10.70 for 800 minutes or 2400 SMS or the crazy $16.05 for unlimited minutes or SMS every month.
Since I talk a lot (I exceed my 700 mins of talk time almost every month, sometimes as much as double) I was immediately drawn by the unlimited talk time. I probably will need about 5GB of data per month to be safe and I hardly send out any SMS at all (who does anymore in the age of What’s App, Facebook Messenger and Telegram?). I can choose not to have any bundled SMS because incoming SMS are free and I am simply charged for the usual pay-per-use SMS rate when I do need to send out the occasional SMS.
That means I only need to pay $46.75 per month for unlimited talktime and a total of 5GB mobile data. That is amazing savings when you compare to my current Singtel Combo 6 plan which comes with 700 mins of talktime, 6GB of data and 1500 SMS (which I don’t need) for $102.90.
Singtel’s new SIM-only plan is indeed remarkable and is the first serious attempt by any telco to reach out to a new breed of customers who no longer want to be bound by a long two-year contract in exchange for subsidised phones. While SIM-only post-paid plans have been around for at least three years ago, previous attempts by all three telcos were half-hearted because they came with one year contracts and just a little extra in minutes or data bundled together.
Not to be outdone, StarHub responded in November (2015) with its new and equally aggressive SIM-only plans which basically offers half-price for any StarHub post-paid plan if the user chooses not to get a subsidised handset. With this deal, StarHub has the lowest SIM-only mobile plan at just $13.95 per month for 100 minutes of talk time, 300MB of data and 500 SMS.
Both Singtel and StarHub’s SIM-only plans only requires a minimum contract period of one month, which means the consumer is free to change plans if the prices should fall even further and not be locked in to a two-year deal.
Credit goes to M1 as the first-mover in this new range of SIM-only plans as it was the one who fired the first salvo in July (2015). M1’s SIM-only plans also offer cheaper monthly subscriptions at about 50 per cent cheaper compared to its usual two-year plans which come with phone subsidies, but only if you sign up for a one-year deal. M1’s Regular $62 plan comes with 300 minutes talk time, 1200 SMS and 4GB data. Its closest SIM-only plan – mySIM 30 - costs just $30 and offers 300 minutes of talk, 1000 SMS and 5GB data. You can also opt for SIM-only plans with only one month contract but you get almost half your data bundle slashed. The one-month mySIM 30 for instance comes with 3GB of data instead of 5GB. Users who don’t mind getting locked-in for one year should consider M1 as it offers a more competitive deal than its competitors but for me, having a one-year deal simply does not make sense at a time when new premium handsets at affordable prices are hitting the market every few months.
While kudos should go to the three telcos for this new competitive activity which has not been seen for a long time, I think the real credit should go to the Infocomm Development Authority who made it clear in July last year that it was dead serious about getting a fourth telco on board to increase competitiveness, so serious it was willing to offer a 60 per cent discount on the 4G spectrum auction to level the playing field for the new entrant.
The incumbent telcos were quite terrified. For years, they had been focused on locking in their subscribers to long contracts and trying to increase revenue by increasing ARPU – the average revenue per user – instead of growing the customer base. StarHub’s post-paid mobile ARPU for instance was $71 for its financial 3Q 2015, $3 more than the same period a year ago where it only scored $68 for 3Q 2014.
That means they have not been slashing rates or trying new innovative ways to win customers over to their camp. Which is why Singapore’s mobile phone bills have remained largely stable over the years. There is good business reason why the telcos have not been aggressive in fighting for market share – the mobile phone market in Singapore is highly saturated at 147 per cent penetration rate as at November 2015. That means that every person in Singapore has an average of 1.5 phones! Starting a price war to win over customers would only result in lowering ARPU, with little room to win over significant amount of customers from its competitors.
A new entrant on the other hand would be a different story. It starts with no subscribers and must therefore offer competitive prices and innovative deals to persuade existing subscribers from its rivals to jump ship. A price war can only benefit the new player and hurt the bottom line of the incumbent three. In my view, the reason why these attractive plans have now materialised over the last few months is the fear of the fourth telco’s entry, with all three telcos putting their best foot forward to persuade the IDA that they are indeed doing their best to be more competitive.
Whatever the reason, the new SIM-only plans is welcome news to consumers who, in my view, have not seen better value in their mobile phone bills for a very long time. The only catch is this – if the fourth telco fails to materialise, will all three incumbents kill off or raise the prices of their SIM-only plans?