I just been tagged by my friend in Facebook that some change in our Singtel Pricing plan are in order come this July. Tiered pricing for singtel’s 3G and 4G plans are in order. On top of that, a little digging shows that Starhub is following suit as well. It turns out that the iSurf plan that i originally posted was in existance since 7 months ago which was for multi sim users.
Singtel
- The plans keeps ARPU at the same prices but reduces the amount of data buffet that the customer can enjoy.
- For excess data usage above the planned amount, Singtel charges 10 per excess gb and 5 per excess gb
while Starhub ensures that your data bill is caped at $30 more than your monthly phone bill Not sure about Singtel but starhub is offering free multi sim for 24 months
What does this mean for consumers?
On the surface, I think Singtel provIding the better initial plan at 2gb. Starhub 1gb is too little. For low usage user like me it is enough however if you chose to do more such as consistently watch streaming videos this is sure to burst.
Which is cheaper after you burst? When you burst the 1gb limit for Starhub, the excess charges are so much that you will end up paying $30 more. With Singtel you can at least scale up by paying 5 bucks more per gb.
The other factor to consider is the free multi sim offered by Starhub. This makes Starhub plan the most flexible since one plan can be use for two devices. However, 1 gb is never enough for that purpose. So you are looking at effectively paying 38+30 for a two device plan. That probably is much cheaper than Singtel.
How this is going to affect the telcos profitability
As investors this is my take on profitability:
The consumers on face value will prefer Singtel’s plan. It favors the budget conscious yet offers enough at 2gb. If you have multi device, Starhub has the edge here. But the consumers will not see that. I see more power shift to Singtel- M1 and Starhub have not come up with their plans and they can chose not to play that game. The people will flock to them. Good thing for them? When everyone flocks to them the network will be crawling probably. They enjoy fast profits but will struggle to keep customers
- This move forces the consumer to be accustom to choosing plans just like they will choose insurance plans. And the consumers hate to choose. People will be up in arms over this but I wonder how much IDA will intervene
- The boost to ARPU or AMPU will depend on how addicted we are to this data mobile lifestyle. Singapore has the highest smartphone penetration in the world, and I believe it’s hard for the average consumer to go back to a life without it
- It becomes more appealing with 4G as higher through put will result in greater consumption
- By telling everyone to watch what you use, it caps the capex cost as well. To be honest I don’t think recent usage trends in Singapore will place excessive stress on the networks to warrant a hell lot of capex. This move just ensures capex can be funded better
- Moves like this may force new entrants to offer island wide wifi fem to cell service as well
- If people choose not to change the plans, mthey missed out on phone subsidies, which reduces that expense for the telcos as well
- Another churning war would be in place. I am not sure how it will turn out. Starhub looks weak from first evaluation
Singtel profitability not going to be affected much. Starhub probably will. Adversely due to churn in worst case.
I fully expect M1 and Starhub to follow Singtel’s tiered structure. They each have indicated in the past a willingness to switch to such a structure.
Kyith is the Owner and Sole Writer behind Investment Moats. Readers tune in to Investment Moats to learn and build stronger, firmer wealth foundations, how to have a Passive investment strategy, know more about investing in REITs and the nuts and bolts of Active Investing.
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Makoshark
Wednesday 6th of June 2012
You got it wrong. Starhub still has the 12 GB plans. It is known as the SmartSurf plans. The one you have listed is the i2Surf plams which is for people who need 2 SIM cards. This is also not a new thing.
Drizzt
Wednesday 6th of June 2012
oops mako! thanks for pointing out!