Saint2 : Have you read today's papers yet? Telco advertisements, red, yellow and green, splash on almost every other page in the World and Home sections. The telco industry label today as the D-Day. Competition is heating up. Who cares as long as you and I, the consumers, benefit big time from better plans and hopefully, cheaper handsets. I will not rush into signing any 2-year phone deals with SingTel, Starhub or M1 yet. The real competition has just begun and it has not reached near feverish levels where the jaw-dropping deals are the real carrots I would compare before biting. Afterall, the iPhone 3G has only been secured by SingTel while the other 2 operators are still in talks with Apple over the same deal. What about you?
June 13, 2008 Cellphone users on cloud nine as number portability kicks in But telcos are feeling the pinch - with ad blitz and dangling of attractive freebies By Chua Hian Hou
TELCOS have never been shy about attracting new customers, but their marketing blitz in recent months has reached near-manic levels. Malls are brimming with armies of spruikers in SingTel red, StarHub green and M1 orange, dangling attractive sign-up freebies and discounts to gleeful customers.
There have also been daily full-page adverts promoting one telco over another.
There's a method behind the apparent marketing madness: to get users locked in with multi-year contracts before number portability starts today. The change will allow people to switch operators without giving up their existing mobile number.
At a stroke, the biggest hurdle to switching - giving up a number known to friends, colleagues and business contacts - has been removed. Now users can chase the best deal.
Do not expect a truce between the mobile giants any time soon. Industry observers predict that Singapore's three telecommunications operators will carry on their costly, bruising battle for the $3 billion mobile-phone market here.
Consumers are on cloud nine but the telcos are feeling the pinch, acknowledged M1 chief executive officer Neil Montefiore.
Just how big a hit they take depends on how 'rational' they are, said analyst Nathan Burley of consulting firm Ovum.
Most markets that introduce number portability experience a 'small flurry of activity, after which the telcos settle down', he said.
But in markets like Hong Kong, number portability sparked a prolonged period of 'irrational' competition that delivered huge hits to telcos' bottom line.
An analyst with a financial research house who declined to be named said that there were signs that this was happening here.
He pointed to the huge resources that telcos have been spending to get customers.
StarHub's customer acquisition cost for the three months to March31 rose 35 per cent to $124 per customer. That compares to about $92 for the same period last year.
SingTel's post-paid customer cost has risen to $313, up 40 per cent from $223 in the first quarter of last year.
Most incumbents generally take a more defensive approach and strive to maintain their margins while accepting that they will lose market share to upstarts.
But SingTel has adopted a different tack and has been aggressively pursuing market share.
Mr Allen Lew, its chief executive officer for Singapore, implied as much at a briefing last month, when he said that the firm would ensure that its pole position in the mobile market here was 'unchallenged'.
The analyst said StarHub has been forced to follow SingTel's lead, as has M1, albeit to a lesser extent.
Who is actually winning the larger war between the three telcos will be revealed in the next few months when they report their results for the March to June quarter.
One thing is already certain: There will be no let-up in pressure.
StarHub chief executive officer Terry Clontz said last month that he expected the heightened competition to persist for at least a few more quarters.
A truce would happen - said the analyst who did not want to be named - only if SingTel 'decides to change strategy to focus on margins rather than market share', since it was the one driving the competition.