Despite stiff competition, Singapore's mobile phone services market continues to expand, both in terms of subscriber growth and revenue.
Marc Einstein, senior industry analyst at Frost & Sullivan, said in terms of subscriber net additions, the Singapore mobile market reached its peak in 2007. Moving forward, the analyst expects users of prepaid services to make up the bulk of new additions to the market.
"Mobile penetration rose by 8.5 percent in 2008, compared to 17 percent in 2007," Einsten told ZDNet Asia in an e-mail interview. "For 2009, we are expecting an estimated 6 percent growth."
Wong Soon Nam, SingTel's vice president of consumer marketing, said despite the slowing economy and Singapore's highly-competitive market, the telco enjoyed strong operational performance in its fiscal third quarter, ending December 2008.
The Singapore carrier added 68,000 mobile subscribers during this quarter, bringing its subscriber base to 2.94 million. Its mobile communication revenue grew 8 percent over the previous year, clocking S$373 million (US$244 million).
Demand for 3G mobile services continues to be strong, Wong said in an e-mail interview. The telco added 71,000 3G subscribers during the quarter, which included previous SingTel 2G customers who upgraded to the 3G platform. As of end-December, its total 3G customer base clocks in at 1.14 million.
Marc Einstein, Frost & Sullivan
"This represents 46 percent of the number of 3G users in Singapore," he said.
According to Einstein, Singapore's total mobile services revenues are expected to reach nearly S$3.7 billion (US$2.4 billion) in 2009, up 4.4 percent from S$3.5 billion (US$2.3 billion) in 2008.
Anil Nihalani, StarHub's head of mobile and communications, noted the effects of the saturated local market for mobile voice services.
"In the prepaid segment, we do run a risk if there is any downturn in the [local] construction industry--that segment is predominantly made up of foreign workers, so it could hit quickly and directly," Nihalani told ZDNet Asia in an e-mail, referring to the volume of calls made by foreign workers who call home.
Noting that the telco sector, too, is not recession-proof during the current downturn, he said: "But, we think we can manage through."
Despite the tight market, StarHub expects competition among the three local telcos including MobileOne (M1), will be at "more rational levels", Nihalani said.
A spokesperson from M1 said in an e-mail: "Market conditions remain challenging, but we will continue to look at growing revenue…retaining customers and winning new ones with flexible and value-added packages."
As for SingTel, it plans to offer "integrated value" to customers for their telecommunications and multimedia content needs. Wong said: "In the mobile arena, we are the first in Singapore to bring in phones like the iPhone and HTC Dream, which deliver a brand-new Internet mobile experience to customers."
Nihalani said: "We see continued growth in mobile data, [and it's] not just [about] the iPhone or the HTC phone with the Android operating system, [as] all [these] are now better devices to access the Internet. What people are going to want is a data service package to go with [the smartphones]."
Data revenue is key
With Singapore's high mobile market penetration and stabilized voice revenues, increasing data revenue is "definitely an important growth strategy for any operator", said Nihalani.
Sandra Goh, Southeast Asia business group director of Microsoft's mobile communications business, expects to see more users accessing data remotely.
"With both time and money becoming increasingly precious, true mobile working will be central in giving small and midsize businesses a competitive edge," Goh said in an e-mail interview.
"Organizations recognize that smartphones are emerging as powerful, useful pocket computers, and as these phones become cheaper, we expect that more companies will implement them to help employees remain constantly connected," she said.
SingTel's Wong expects mobile data usage to increase with the rollout of higher mobile broadband speeds, which will allow telcos to offer richer content. He said SingTel will be enhancing its mobile networks to offer 21Mbps mobile broadband to its customers progressively this year, subject to the availability of compatible handsets.
"Customers will be able to enjoy faster file downloads, a superior surfing experience and be entertained on the move," he said. "For example, playing multi-player online games will be enhanced with better latency and streaming of high-definition video content will be smooth."
Another trend in Singapore, noted Nihalani, is that people are accessing wireless on-the-move and wireline broadband at home. "These two services are complementary, so we expect that there will be more fixed broadband users taking up mobile broadband services, too."
Einstein added that with SingTel and StarHub now providing such "quadruple-play" offerings, Singapore's postpaid market is quickly moving toward converged offerings.
"While this offers up-selling opportunities in the short term; in the longer term, having two, and potentially three quad-play operators in the market will equate to stagnant household ARPU (average revenue per user)," he said.
"On the bright side, Singapore's increasing population will continue to offer an opportunity to local mobile operators in the coming years", the analyst added.
Other than quad-play opportunities, the telcos will continue to migrate subscribers to 3G, which already accounts for nearly 40 percent of all handsets in the market, he said.
| SINGAPORE MOBILE SERVICES MARKET | ||||||
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | |
| Subscribers ('000) | 5,619 | 6,338 | 7,054 | 7,703 | 8,331 | 8,966 |
| Prepaid | 2,608 | 3,079 | 3,736 | 4,344 | 4,809 | 5,222 |
| Postpaid | 3,011 | 3,259 | 3,318 | 3,359 | 3,522 | 3,744 |
| Revenues (US$m) | 2,175 | 2,311 | 2,413 | 2,462 | 2,538 | 2,671 |
| 3G subscribers ('000) | 1,635 | 2,473 | 3,019 | 3,554 | 4,053 | 4,881 |
| Source: Frost & Sullivan | ||||||
Upcoming mobile applications
Einstein added that services such as mobile TV, mobile payments and location-based services (LBS), will make some headway, but will continue to be niche applications.
However, Wong said, SingTel has seen an increasing trend in the adoption of LBS, particularly location-based advertising (LBA), navigation and people-locator services.
"This could be due partly to the availability of GPS (global positioning system) phones like the iPhone, with better user interfaces and the ability to deliver richer contextual services to customers," he said.
Nihalani said StarHub, too, has received good feedback from consumers on the prospects of LBA. "Since mobile penetration is at a high, and growing, we believe there is potential for us to grow the LBA service," he said.
Agreeing, Geraldine Kor, Asia-Pacific marketing director of Navteq, believes dynamic content and LBS have a huge potential in technologically-savvy Singapore. Navteq is a provider of digital map information for LBS.
Results of two separate studies the company conducted on GPS navigation users in North America and Europe, indicated a strong demand for dynamic information such as traffic, weather, parking and fuel pricing, Kor said in an e-mail interview.
"This research suggests these services will also be sought after in the Asia-Pacific region," she said, adding that Navteq wants to play an important role in the development of dynamic content in Singapore and the region.
"Our current focus in Singapore is on delivering the new content that navigation systems can leverage today, including 3D landmarks which improve end-users' sense of place in unfamiliar and complex locations, extended lane data that enhances navigation in complex situations, and pedestrian data that includes transit station locations, entrances, escalators, elevations, taxi stands, and so son," she said.
As for near-field communication (NFC), Wong said it is still nascent as the availability of handsets is limited. However, he added, SingTel is exploring alternative means such as NFC on a SIM card, that may help kickstart the development of innovative services.
StarHub, too, is still trying to determine the opportunities and appropriate time to roll out its NFC service.
Nihalani said: "We need to see a good range of NFC-enabled handset models from handset manufacturers, before we can position ourselves for a commercial rollout in future."
Both SingTel and StarHub had conducted NFC trials in 2007.
