Amid the price war among telcos, here’s how the cheapest data plans stack up

SINGAPORE — A move by mobile virtual network operator (MVNO) Circles.Life on Thursday (Sept 5) to launch a S$5 a month plan for low-data users has cast a spotlight on the growing range of cheap SIM-only, no-contract deals on offer.

The new Circles.Life plan, with just 2GB of data a month, is the latest shot in the price war which has erupted in the telco industry since MVNOs —with their leaner cost structures — stormed into the market about three years ago.

The three traditional operators, Singtel, StarHub and M1, known as Mobile Network Operators (MNOs) suddenly find themselves competing in a field of 11 telcos in Singapore including new MNO entrant TPG. This led to a fall in profit margins among the MNOs in the past year.

But for their part, consumers have been enjoying the lowest prices on mobile plans in years.

Just how low is low? TODAY looks at some SIM-only plans — packages offering data, talk time and SMSes at a fixed monthly cost — that various telcos and MVNOs are offering, and asks analysts if low monthly fees is the only factor to consider.

MVNOs VS MNOs

MVNOs cheapest SIM-only, no-contract plans:

MNOs cheapest SIM-only, no-contract plans:

Mr Alvin Chia, a research analyst at Phillip Securities Research, said that although MVNOs generally offer lower prices they “are still using the MNO’s infrastructure, so there’s no compromise in quality”.

Unlike the main telcos, MVNOs do not own and operate any network infrastructure and have to lease it from Singtel, M1 or StarHub at a cost.

MVNOs Zero1 and ZeroMobile are under Singtel’s network, while Circles.Life is under M1.

With no difference in network quality, and with MVNOs lowering prices, why would consumers buy plans from the major telcos?

MAJOR TELCOS OFFER EXTRAS

Mr Chia said that while MVNOs are price competitive, the MNOs have other tools that they can use “because they have a larger scope of operations as a full service telco”.

For example, instead of enticing users with lower prices, they are able to offer membership discounts to content streaming platforms such as Netflix and Spotify due to their strong brand partnerships.

Video streaming platform Cast, for example, is available only to Singtel mobile plan subscribers, Singtel Fibre Broadband subscribers and Singtel TV subscribers, Singtel’s website stated. 

Mr Sachin Mittal, DBS bank's head of telecom, media and technology research, said another edge that MNOs have over MVNOs is better customer service through physical stores.

“If you don’t have a physical shop, it becomes difficult to reach out to everyone… especially those who are not as well-acquainted with digital platforms.”

Mr Mittal said that this is especially true for those looking for a mobile phone plan, and would prefer to step into a physical shop to browse rather than trust what they see online.

NEW PLAYERS AIM FOR NICHE MARKETS

Besides just fighting for a share of the market with low prices, MVNOs also target niche markets.

Circles.Life, for example, has said that its S$5 plan aims “to serve the 20 per cent of users who consume 2GB of data a month” — those requiring only a basic plan to communicate with friends and family.

Grid Mobile targets tech-savvy millennials with its rewards system which allows users to cash in on points that they earn through referrals and long-term use of the plans.

VivoBee seeks to cater to foreign workers and migrants by offering a cheaper alternative to overseas voice calls, while RedOne, which offers mobile data across Singapore and Malaysia, is aimed at those who travel often between the two countries.

Mr Chia said that MVNOs have to target a niche market, as their range of services is not as large scale as the MNOs and thus, they cannot cater to a wider market.

Australian-based telco TPG’s low pricing stems from its free 12-month service trial that started last December and is expected to launch commercial services later this year.

Mr Chia said that it is only when TPG fully enters the market can the telecommunications market be properly assessed.

“It will remove a lot of uncertainty in the market, so by then we should see how the competitive landscape changes,” he said.