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Telcos move to claw back business lost to free apps

SINGAPORE — Telcos are taking the first step towards clawing back business that has been lost to the numerous free text messaging applications that have cropped up in recent years, with SingTel the first to collaborate with one of the biggest of such providers, WhatsApp.

SINGAPORE — Telcos are taking the first step towards clawing back business that has been lost to the numerous free text messaging applications that have cropped up in recent years, with SingTel the first to collaborate with one of the biggest of such providers, WhatsApp.

With traditional telco revenue falling, the move is also aimed at getting subscribers accustomed to paying for data, in a shift from the free-for-all, data buffet of the recent past, analysts said.

SingTel yesterday launched three types of WhatsApp plans for pre-paid mobile customers, with rival StarHub saying it will soon follow with similar plans.

SingTel users who buy these plans — at 50 cents a day, S$3 a week or S$6 for 30 days — that will be tagged on to their existing pre-paid plans can send unlimited WhatsApp messages without incurring additional data charges.

The telco also launched plans for pre-paid users to do unlimited surfing on the Internet at S$1 a day, S$5 a week and S$10 for 30 days. Mr Johan Buse, SingTel’s Vice-President of Consumer Marketing, said: “The plans we have launched today will provide our pre-paid customers with a similar level of convenience at an affordable price to meet their online needs.”

In a response, StarHub said it had “just concluded talks with a social messaging service provider on joint collaboration and we will announce details later”. It will also implement a communication platform known as Rich Communication Services (RCS), which will let customers text, make IP (Internet Protocol) calls and share files by the final quarter of this year.

Referring to its coming joint collaboration, Mr Chan Kin Hung, StarHub’s Senior Vice-President of Personal Solutions, said: “While it is too early to comment on any impact this would have on our RCS plan, we expect more mobile operators worldwide to deploy RCS over time for the benefit of consumers. Having said that, we do not rule out collaborating with OTT (over-the-top) players as we believe we can leverage their unique strengths to offer our customers choice and a better overall experience with StarHub.”

M1, too, said it will be implementing RCS services and also pointed to its pre-paid 4G service — the only one in Singapore — that allows customers the “full mobile Internet experience”.

Analysts said this move by SingTel is strategic in drawing more pre-paid customers to start paying more for data, as most still go for voice calls and text messages.

But some criticised the pricing of the plans as too high, and suggested bundling of more services, such as Skype, in the plans.

Mr Andrew Milroy, Vice-President of ICT Research at research firm Frost & Sullivan, noted that telcos in some countries, such as South Korea, bundle other messaging services with their plans, instead of going with WhatsApp. Still, he thinks the partnership model with already-popular apps will be the way of the future.

Mr Foong King Yew, a telco analyst at IT research firm Gartner, noted that this is happening in developing markets such as Indonesia and India. “They are creating pre-paid plans with very specific applications, such as Facebook,” he said.

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