Telco M1 has launched the cheapest mass-market mobile plan here in at least three years, targeting customers who do not need to buy a new handset.
Its most basic new subscription plan costs $30 a month for a 5GB data bundle, 300 minutes of talk-time and 1,000 SMS and MMS. Customers must sign a one-year contract.
Similar 5GB data mobile plans for customers who need a new subsidised handset cost at least $80 a month across all three telcos - Singtel, StarHub and M1.
Singtel and StarHub phone line-only subscriptions are not significantly cheaper than their plans that include a subsidised smartphone.
Singtel charges customers who need just a phone line the same monthly fees as those who buy the line and a subsidised smartphone.
However its phone line-only customers get 50 per cent more outgoing talk time, and a shorter contract period of three months.
StarHub gives line-only customers a 20 per cent discount on their monthly subscription. (See correction note below)
But with the arrival of low-cost smartphones such as the $169 Xiaomi Redmi in February last year and the $249 Asus ZenFone 5 four months later, users need not sign expensive two-year mobile service contracts in exchange for massive subsidies for their smartphones.
More low-cost China phone makers, such as Huawei and OnePlus, have also entered the market since.
Customers routinely tie themselves to such long-term deals because most smartphones cost at least $600 each without contracts. Premium models such as the iPhone 6 and Samsung Galaxy S6 even carry a $1,000 price tag.
"Customers who prefer to buy their own smartphones have told us they would like to see better value in their post-paid plans," said Mr P. Subramaniam, chief marketing officer at M1. "As we do not subsidise these customers' smartphones, we pass these savings back to them through larger data, call and message bundles."
Some customers gave the new plan the thumbs-up. Operations manager Leonard Ho, 42, said: "I have a second mobile line and I don't need a swanky new phone for that. This plan is perfect."
Senior analyst Clement Teo of US-based market research firm Forrester said: "M1 has stolen the march on the potential fourth telco with its first salvo of innovative mobile contracts."
He added that Singtel and StarHub are likely to respond with similar plans.
If a proposal by authorities revealed earlier this month goes through, a radio frequency auction will take place next year, in which potential new telco entrants can bid for spectrum at a reserve price 60 per cent lower than the price set for the current three telcos.
A Singtel spokesman said its customers indicated that they prefer subscription plans that come with a handset. "However, we will always strive to provide options that meet the various needs of our customers," she added.
StarHub chief commercial officer Kevin Lim said: "We have planned for several changes to the current plans and more details will be announced in the coming weeks."
Correction: An earlier version of the article said "StarHub gives line-only customers a 20 per cent discount on their monthly subscription. Subscribers must sign a one-year contract." Starhub has clarified that it does not require customers to sign a one-year contract and has updated its website with the correct information.
This article was first published on July 30, 2015.
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