In many ways, this illustrates
what happened during the euphoric period of
the dot.com boom. Many mobile operators, especially
in Europe, paid a total of €109 billion (then US$125
billion) for licences to build and operate
3G or third-generation, high-speed networks.
British and German operators, for example,
ended up paying fees of around €8 billion
for each 3G licence – even bigger than Sri
Lanka 's foreign debt of US$7.7 billion (€5.9
billion).
Such high costs, lacklustre demand and various
teething problems with 3G nearly bankrupted
the industry. Operators soon wrote down the
value of their 3G licences. Some even handed
the licences back to the governments from which
they bought them.
Singapore story
The story is different in Singapore . Having
wised up to the experience of other countries,
the local regulator was more realistic in its
approach to 3G.
While there were initial estimates that 3G
licences in Singapore would run up to at least
S$2 billion (€900 million), a more
realistic pricing was arrived at . Like its
local rivals, Singapore Telecommunications
Limited (SingTel), the largest mobile operator
in Singapore , only had to pay around S$100
million for its 3G licence in 2001.
Listen to the people
After addressing early teething issues such
as the form factor and battery life of 3G phones,
SingTel launched a comprehensive 3G customer
trial in September 2004, to gauge their interest
and expectations of the service. It also used
its position as both a mobile and fixed line
operator to launch a fixed line-mobile video
call trial.
The message from the customers was clear:
keep 3G simple and affordable.
So instead of packaging 3G as a “high-end” or “premium” service,
SingTel took the lead in positioning 3G as
a service for the masses. In December 2004,
it became the first telecom company to sell
3G handsets in Singapore . The handsets were
all under S$1,000 (US$610), inclusive of subscription
plans and some customers rushed to be among
the first to own one.
In February this year, SingTel launched its
commercial 3G services. A major draw for customers
is that local video calls are priced the same
as local mobile voice calls. This can be as
low as 10 Singapore cents per minute. In contrast,
some operators in Japan , for example, were
previously charging their video calls 60 per
cent higher than normal voice calls.
SingTel also offered customers a retail 3G
data charge that is 30 per cent cheaper than
the retail GPRS charge. It will cost 3G customers
just S$3.50 per megabyte of data use.
To make its 3G content “connect” better with
customers and to differentiate its offerings
from that of its competitors, SingTel offered
more locally-produced content for video-streaming
and downloads instead of solely depending on
imported shows. As such, customers get access
to a wide range of programmes from news to
entertainment, and comedies to paranormal phenomena.
The 3 lo G y
initiative
As a full-service provider, SingTel is positioning
its 3G service as going beyond the mobile sphere.
Instead of targeting a purely mobile base,
there is the potential to extend the benefits
of 3G to fixed line and broadband Internet
customers as well.
The service was thus launched under a marketing
initiative called ‘ 3 lo G y'. It helped customers
be more aware that 3G can enable video communications
whether they are at work (via broadband Internet),
at home (via a video fixed line phone) or on
the move (via 3G devices).
Part of the push for 3G's video communications
capabilities is the feeling that person-to-person
communication has become less intimate. This
has been the result of the proliferation of
email and other text-based communications such
as SMS (Short Message Service). To bring back
the intimacy in communications, we need to
re-introduce more face-to-face interaction.
SingTel hopes that video communications via
the 3loGy initiative will help towards achieving
this.
Positive customer take-up
In the short few months since its 3G launch,
SingTel has signed more than 10 ,000 3G customers
. With an increasing number of eye-pleasing
models of 3G mobile phones and devices coming
onto the market, it is confident that the take-up
rate of 3G services will reach a mass scale
in a couple of years' time.
In the short few months since its 3G launch,
SingTel has signed more than 10 ,000 3G. One
question that industry observers might ask
is - “Will SingTel's experience be replicated
in other countries in Asia ?”
From Singapore to Asia
Chances are, other Asian countries which have
yet to license 3G operators would benchmark
their licence fees proportionately closer to
that in Singapore .
China , India and Indonesia – three major
markets in Asia – have plans to roll out 3G
services soon. Even though each of them is
much bigger than Singapore , the proportionate
costs of their 3G licences are unlikely to
reach the hyped-up prices seen in Britain and
Germany in 2000.
While it has been previously thought that
only the more developed Asian economies will
be early adopters of 3G, judging from recent
3G-related regulatory activities, the 3G phenomenon
is likely to be equally strong in emerging
markets such as Indonesia and India .
A recent study by International Data Corp
(IDC) predicted that there would be 142.6 million
3G users in Asia by 2009. The IDC study, which
excluded Japan , showed that subscriber numbers,
which stood at 10.2 million last year, will
surge by an average of 69 per cent each year.
In April this year, Mr Andrew Robertson, the
CEO of BBDO, the world's third-biggest advertising
agency, already said that, based on their survey,
mobile phones will soon surpass TV sets as
the most important medium for ads and communication.
With the confluence of these factors, it is
apparent that 3G will find a rebirth of sorts
in Asia .
SingTel will be ready to ride on that growth
through its active participation in Asia 's
largest mobile joint venture – Bridge Mobile
Alliance.
Its eight founding members are all major players
in their respective countries: Bharti ( India
), Globe Telecom (the Philippines ), CSL (
Hong Kong ) , Maxis ( Malaysia ), Optus ( Australia
), SingTel ( Singapore ), Taiwan Cellular Corporation
( Taiwan ) and Telkomsel ( Indonesia ).
Three of the Alliance partners are already
providing commercial 3G services with two more
coming online by the end of the year. The other
three founding members are all set to come
on stream as soon as their regulatory authorities
have decided on licensing and spectrum allocation
issues.
Together, the partners have currently more
than 60 million subscribers with the potential
to reach beyond 300
million subscribers in key markets in the Asia-Pacific
region.
With the advantage of cross-marketing and
knowledge-sharing, the partners of Bridge are
expected to reap the benefits of their membership
and propel themselves ahead with the advent
of 3G.
Indeed, the Asia-Pacific telco players already
have the advantage of studying the 3G experience
of early adopters like Japan and South Korea
.
SingTel is happy with being a 3G pioneer in
Southeast Asia . And by leading the call to
make 3G a mass-targeted product, it is the
customers who will stand to benefit the most.
