Singaporean cellular operator MobileOne Asia (M1) has said it will launch third-generation (3G) mobile services in the second half of next year, but that it doesn’t expect them to make a significant revenue impact until 2006. M1 is keen to get its high speed wireless offering up and running as soon as possible to counter falling margins from traditional voice services in Singapore’s highly penetrated 2G services sector. It has said it will spend up to SGD250 million over the next three years developing its 3G portfolio, which will be aimed more at the consumer segment than high-end business users, and will include high-speed video streaming and video calls. M1’s Chief Executive Neil Montefiore told reporters recently that he expected 2G and 3G data services to make up around 25% of its average revenue per user (ARPU) by 2006, up from the current level of 15%.
Singapore’s mobile market is well-developed and intensely competitive, with just three players – Singapore Telecom-backed SingTel Mobile, M1, and relative newcomer StarHub. By the start of July 2003 3.34 million people owned a mobile phone, up from 3.01 million the previous year, a cellular penetration rate of 80.1%. Unlike many other markets around the world, each operator enjoys a relatively high proportion of contract customers, with pre-paid users accounting for less than 25% of the total. SingTel Mobile claimed the top position at 30 June 2003 with 45.9% of the market, ahead of M1 with 31.7% and StarHub on 22.4%. With the market having reached saturation levels, the cellcos have been forced to intensify efforts to keep churn rates low and to maintain revenue streams through the provision of new products, such as high speed mobile internet offerings and mobile messaging services (MMS). MMS was introduced to much fanfare, with SingTel Mobile and M1 initially offering customers a free trial to encourage take-up.
By mid-2003 the take up of GPRS services was strengthening, giving rise to increased optimism over the introduction of 3G. At that date M1 said GPRS traffic had been growing at a compound rate of 28% per month, thanks to the proliferation of multimedia messaging services (MMS) and camera-phone enabled handsets; it estimated GPRS handset penetration had reached 30% in the country as a whole. Neil Montefiore said that MMS handset penetration stood at around 5.5%, a figure he hopes will rise to 20% by the end of 2003, while the number of subscribers using the service had reached 60,000. MMS and gaming services are currently accounting for around a third of M1’s data ARPU. The picture is similar at SingTel Mobile where GPRS users exceeded the 100,000 mark by June 2003, of which 80,000 were MMS users. Data revenues accounted for 14% of SingTel Mobile’s total income from mobile services in the first half of 2003.