This is How Pokemon Go Might Change Singapore’s Telcos

Singapore’s three big telcos – Singapore Telecommunications Limited (SGX: Z74), StarHub Ltd (SGX: CC3), and M1 Ltd (SGX: B2F) – have each reported their latest earnings. If there is one common theme, it would be the growth in mobile data that they’ve all seen.

Let’s start with Singtel. In its earnings briefing for the second-quarter of 2016, the company’s chief executive Chua Sock Koong highlighted the role of mobile data across all its markets:

“The recurring theme across all our markets is mobile data. Having invested extensively in 3G and 4G networks and services and with the rise of smartphone adoption, our associates were well-positioned to successfully drive data usage and customer growth.

Across Singapore and Australia, our quality networks, differentiated content and flexible data pricing plans also helped us stand out from competitors.”

That’s an interesting statement, given the breadth of Singtel’s operations in Asia. As of the end of March this year, Singtel has a presence in Australia, Indonesia, India, Thailand, the Philippines, and some countries in the African continent.

Moving on to StarHub, its chief marketing officer Howie Lau believes that there is opportunity for the company to tap on the growing trend of mobile data. In the company’s earnings briefing for the second-quarter of 2016, he said this about mobile data:

“Regarding the monetisation of data, clearly this is an opportunity for us in StarHub. We are looking at different ways, whether it is the Plus 3 pack that we launch or some of the additional plans that we are looking so we are to leverage on the fact that customers like you and I are using a lot more data as we move forward.”

Tan Tong Hai, StarHub’s chief executive, talked about other factors that could drive higher mobile data usage:

“So in terms of this data usage, you will notice that the main drivers is actually video. This is the reason why we have articulated that the content, in fact, our TV business is very key, it can help to drive data usage.

You look at right now with we’re talking about augmented reality and bringing the mobile phones to try to catch Pokémon monsters. You notice that these are also new development driving data usage. We believe that we have still yet to move into more the virtual reality and the augmented reality world.”

Lau also went on to share some estimates on how augmented reality games like the wildly popular Pokémon GO can contribute to data consumption at StarHub:

“The – based on what we read and the technology, the Pokémon GO would take anywhere from 100 meg to 300 meg, depending on the user and how frequently you use it. So it does generate data usage.”

Then, there is M1. The company is in favour of higher mobile data consumption. In M1’s earnings briefing for the second-quarter of 2016, chief commercial officer Lee Kok Chew noted how OTT (over the top) services were eating into its traditional revenue streams:

“Increasing adoption of OTT services has impacted traditional telecoms revenue, but led to higher demand for data.”

On OTT services, Lee could be referring to services such as Facebook Inc’s Messenger and Whatsapp. But, as Lee notes, mobile data is on the rise:

“Well what we’re seeing is that with the faster network, with faster, better mobile devices, the consumption of data is likely to continue to grow, more so with all these bigger data bundles that will encourage all these data consumptions.”

M1’s chief marketing officer Poopalasingam Subramaniam also added his thoughts on the matter:

“And with more data available to customers, doubling of data and upsized data, we do see that the trajectory is upwards, that it will grow. Exactly where it will land, I think it’s quite difficult for us to say right now. But we are seeing more customers using more data.”

With augmented reality games and online videos gaining favour, Singapore’s telcos might be looking to Pokemon GO-type applications to drive increasing data usage in the future.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong owns shares in Facebook.