Game of Thrones: 3 Key Quotes that Vividly Describe Singapore’s Raging Mobile Wars

Singapore’s three main telcos have been slugging it out in the mobile space.

Recent comments from M1 Ltd’s (SGX: B2F) management team have given investors some hints on how the battle ground looks like. Thing is, M1 is the smallest among the three major telcos in Singapore. There are still the views of StarHub Ltd (SGX: CC3) and the big kahuna of Singapore Telecommunications Limited (SGX: Z74) to consider.

As I went through each telco’s recent earnings conference calls, I found three quotes that vividly describe what is happening in the ongoing mobile war.

Traditional telco services are being replaced

Over-the-top (OTT) apps are providing services that can replace traditional telco services provided by the trio, such as IDD calls, voice calls, and SMS messages.

Yuen Kuan Moon, Singtel’s chief executive of its Consumer Singapore business, made a key comment on this trend in the company’s latest earnings briefing:

“I think this is not a new trend. It’s just that the recent quarters we have seen the increase in pace of substitution from voice to data.”

Yuen also said that the pace of substitution is increasing as a result of higher smartphone and data network penetration in the region. As it stands, the trend doesn’t seem like it will be reversing soon.

Data to the rescue

To be sure, all three telcos are also benefiting from higher data usage. But, more data consumption may not be enough to cover the shortfalls in other areas.

In its 2016 third quarter earnings briefing, StarHub’s chief executive Tan Tong Hai explained the situation in a few simple words:

“It’s just that the usage revenue [referring to mobile roaming and IDD usage] has dropped, and the usage, although we have added on more what we call either you can buy more data and all those, it’s data buying is still not enough to cover for the drop in the roaming.”

“Not enough” is the operative word here.

As customers replace traditional telco services with data-powered ones, it might not be enough to cover the mobile revenue shortfalls that StarHub is experiencing. Moreover, the three telcos are also fighting it out in terms of offering the best price and value for their respective data plans.

In M1’s latest earnings briefing, its chief marketing officer Poopalasingam Subramaniam remarked:

“You asked about whether there are competitive pressure. I think you can see that the data offerings in the market today are more attractive than maybe about six months ago. And that’s the state of data pricing today.”

The situation is what it is, according to Subramaniam. Singtel has upped the ante and offered to triple existing data allowances for a monthly flat fee. StarHub and M1 have yet to respond.

Investors will have to continue observing as the situation unfolds 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 doesn’t own shares in any companies mentioned.