Monday, September 10, 2012

Are Singapore telcos competing or cooperating?

Singapore telcos have together cut down the data allowance for their mobile subscribers. Previously we had 12GB of bundled data with many of the price plans. They've cut it down to 2GB or 1GB for most of us. Only the fat cat my-company-pays-my-bills tier has that 12GB allocation. Here's the oft-quoted comparison chart on HardwareZone.

This doesn't actually affect me now. I'm on a 12GB limit with SingTel but hardly consume more than 1GB per month even with aggressive use. The people who stream videos using apps like PPTV on the way to work, watching their Korean serials and clocking 10GB a month will be the affected parties.

For those who complaining about slow 3G speeds, some of the blame can be put on these PPTV streamers. It's within their rights to stream of course, but if we take them out of the equation, the aging 3G towers which feed us our bandwidth would be less congested, and free up the number of concurrent connections they have to support and will definitely improve the speed of our 3G data for sure.

In the short term, the data bundle reduction is great for me and the rough majority of users who don't really stream so much. The PPTV people won't be able to stream so much anymore, and they'll rely on Wi-Fi in the office when they have some time to goof off watching their TV programs. And at home, they'll have to set up their Wi-Fi so that their phone can minimize 3G usage and instead use more of that fibre bandwidth they bought. Perhaps they'll even pre-download their media and copy episodes into their phones, or, for iOS users, start the nightmare that's called iTunes to transfer downloaded movies to an iPhone 5.

But in the long term, my data usage is going increase for sure. More and more of my apps would assume I'm using an unlimited connection. More of my video games would be supplemented by phone apps and more of my life will be based on the eternal connection that is WhatsApp. My full-HD phone screen would like to have full-HD videos, so even without crazy streaming, I'm going to have to push 3GB within the next year or so.

LTE (or 4G) came just in time for this shift. 4G towers and base stations have new technology which enables them to support far larger number of concurrent users, pumping much more data per user, with better voice quality too. 4G will get rid of that 3G base station saturation issue.

The irony is that, when the telcos can finally alleviate that concurrency issue with 4G, they start to use a blunt knife and start throttling users by data limits! It's going back to the past! Granted they have to invest in 4G adoption, but all this is amortized, and 4G is potentially far, far more efficient than 3G in terms of amount of infrastructure dollars needed to be spent per subscriber assuming a similar standard of service.

That they used this 4G as some kind of marketing gimmick to lower our data limits and push us to spend more on the same bandwidth entitlement, is their perogative. In a truly competitive situation, some Branson guy would see the chance to look on this 4G as a chance to grab business from the competitors. But in Singapore, all the three telcos are able to:

1) Roughly maintain similar tiers of service, price and offerings mirroring each other
2) Maintain a similar data cap
3) Have similarly lousy data service
4) Have no plans to break out of the mold

This feels a lot like cooperation between the telcos. And they aren't subject to the Singapore Competition Act, specifically excluded from the general act coverage and covered by other sector legislation only.

What we need is a Richard Branson. Hope he has the guts to come do it alone and not in cooperation with one of our telcos (as Virgin Mobile did with SingTel in 2001). While I hope our guys will kick Branson's butt eventually, for now, I think the first guy with the courage to invest may win all since the telcos have spent most of the past two decades mirroring each other instead of competing.

View the original article here

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