New telco has to gain public's trust on reliable service

New telco has to gain public's trust on reliable service
MyRepublic’s publicity drive to promote its broadband services. A new, hungrier market player could broaden options to variety-starved consumers, possibly lowering prices for all.

The position for a fourth telco in Singapore has been vacant for 13 years, and for a good reason: The set-up cost is too high and the market is too small.

But last month, local broadband services provider MyRepublic surprised many by making known its plans to compete against mobile heavyweights SingTel, StarHub and M1 as a full-fledged telco.

Singapore, with a population of 5.3 million, has more than 8.3 million mobile lines. The population penetration rate is 150 per cent, meaning that many people have more than one cellphone.

Is there enough market demand for a fourth telco now?

It boils down to how one creates new demand, even from a saturated market. One such opportunity lies in delivering generous mobile data plans at "buffet" prices.

New data plans

In the last two years, the three telcos have stopped offering generous 12GB mobile data bundles with all subscription plans. Instead, they have capped data usage, starting from 100MB, depending on the price tiers. They have also doubled the rates customers pay when they exceed their data allowances.

A new, hungrier market player could broaden options to variety-starved consumers, possibly lowering prices for all.

Already, MyRepublic plans to offer an all-you-can-eat data plan, which no telco now offers, at a flat fee of about $50 a month.

It is taking a cue from the $49.99 a month it now charges for its high-speed 1Gbps fibre broadband package for unlimited home Internet access, the cheapest per MB plan to date.

For this price, current SingTel, StarHub and M1 subscribers get a maximum mobile data allowance of 4GB.

In order to retain their generous 12GB 3G mobile data plans, many customers have avoided signing a new contract over the past two years.

As at March 31, about half of the customers of all three telcos were still benefiting from 12GB 3G mobile data plans. SingTel has 2.2 million post-paid customers, while StarHub has 1.2 million and M1, 1.1 million.

Bonds trader Samuel Ong is one such user. Even though his mobile contract expired last year, he did not renew it for a brand new subsidised smartphone.

"Mobile data services in Singapore are getting very expensive. I want to keep my 12GB data plan, even if it means staying on the slower 3G network," said the 30-year-old.

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