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New telco Grid Mobile targets millennials; analysts say it will have to fight for slice of pie

SINGAPORE — A fifth mobile virtual network operator (MVNO) has entered the market, targeting millennials and claiming to offer more than just additional mobile data and no-contract plans.

Grid Mobile is a joint venture between Singtel and ST Telemedia.

Grid Mobile is a joint venture between Singtel and ST Telemedia.

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SINGAPORE — A fifth mobile virtual network operator (MVNO) has entered the market, targeting millennials and claiming to offer more than just additional mobile data and no-contract plans.

Called Grid Mobile, the new telco is a joint venture between Singtel and ST Telemedia.

It hopes to attract customers with a points system that rewards consumers for loyalty or for recommending the telco to a friend.

Customers can use the points to offset their bills and get cashback offers.

Mr Mohamad Rizal, a senior director at Grid Mobile, said in a press release on Thursday (June 27) that millennials did not want to be bound by mobile line contracts or worry about exceeding their mobile data limits.

He said: “But even with the recent abundance in mobile plan options, we realised there is still one major missing piece — how to integrate mobile plans into a consumer’s actual lifestyle, and make it both useful and fun for the millennial consumer.”

With a plan priced at S$24.90 per month that comes with 20GB of data and 200 minutes of outgoing calls, Grid Mobile hopes to provide users with “what they need at good value”, said Grid Mobile’s head of marketing Seet Ai-Li.

Grid Mobile’s entrance came a day after Singapore’s fourth telco TPG Telecom unveiled its plans to offer users free unlimited data roaming in Malaysia and Indonesia from the middle of next month.

‘PRICE-SENSITIVE SPACE’ CROWDED WITH COMPETITION

Analysts told TODAY that Grid Mobile would have to fight for a slice of the pie in a saturated market, with Singapore having one of the highest mobile penetration rates in the world.

Mr Alvin Chia, a research analyst at Phillip Securities Research, said that the entry of another MVNO will have minimal impact on the mobile network operators (MNO) in Singapore.

He said: “The price-sensitive space is already crowded with competition (now with five MVNOs). Consumers now have nine different operators to choose from.

“We think it will be very hard to attract subscribers, especially after the three MNOs (Singtel, StarHub and M1) recently revised their mobile offerings for both handset and SIM-only plans.

“Although SIM-only plans provide flexibility (no lock-in contract), consumers who have just changed operators might just stick to their current plans.”

He also believes that Grid Mobile has not offered something that is significantly different from those already in the market.

“Grid’s strategy to target the millennials, who are digitally savvy, is no different from the recent mobile offerings we saw from Singtel (Gomo), StarHub (Giga), M1 (One-plan) and current MVNO plans. All existing plans offer flexibility and customisability,” he said.

DBS Bank's head of telecom and technology research Sachin Mittal noted that MVNOs tend to target “niche market segments” which may comprise less than 5 per cent of the total mobile market.

“MVNO’s cost structure has to be very lean with no shops, minimal staff and low-cost software in order to be profitable with a small revenue stream,” he said.

Related topics

telco Grid Mobile Mobile Virtual Network Operator

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