StarHub and M1 join the price war

A price war has erupted in the mobile space for the first time in four years, with telcos cutting mobile subscription costs by half.

Yesterday, telco M1 followed Singtel's lead, almost doubling new and recontracting customers' mobile data allowance at a fixed additional cost of $5.90 a month.

Earlier on Wednesday, Singtel announced the same offer, dubbed DataX2.

Late yesterday, StarHub also joined its two rivals, allowing new and recontracting customers to add 3GB of mobile data to existing bundles when they top up $3 a month now, or $6 a month from April.

The telcos' moves have essentially cut the prices of their popular plans by up to half.

For instance, an M1 plan with 5GB of mobile data now costs $47.90 a month, or 40 per cent less than what it used to cost.

Comparatively, Singtel's plan with a 4GB data bundle now costs $48.80 a month, also 40 per cent less than before.

StarHub's new price of $48.90 a month - or a promotional rate of $45.90 for sign-ups this month only - for its 6GB plan is less than half of what it used to cost.

Analysts attribute the price war to the possible entry of a fourth mobile operator.

Ramakrishna Maruvada, telecoms researcher from Daiwa Capital Markets, said: "The current moves are a clear warning to potential new entrants that incumbents are prepared to slug it out to protect their customers."

A mobile airwave auction will take place in the third quarter of this year and the fourth telco could be rolling out its services as early as April 2017.

Two local companies - fibre broadband services provider MyRepublic and a unit of Consistel, which set up the Singapore Sports Hub's wireless systems - are eyeing the chance to become the fourth telco here.

Businessman Harry Chew, 46, said: "I'm sure there will be better offerings when the fourth telco enters the market. Already the threat of having one has made the telcos cut prices, something they have not been doing over the past four years."

Cris Tran, consulting associate of digital transformation at market research firm Frost & Sullivan Asia-Pacific, said the telcos are able to cut prices now as they have probably recovered from their 4G investments. "In 2012, the mobile data business was good but not as good as today," he added.

M1 has also given its mobile line-only plans a reboot, offering higher data bundles for less. For instance, it used to cost a customer $30 a month for 3GB of mobile data but now it costs $20.

It also added two low-end packages, offering 1GB and 4GB of data for $15 and $20, respectively. All its line-only plans come with at least 100 minutes of outgoing phone calls and 600 SMS/MMS.

Get MyPaper for more stories.