Data is the new competition arena for telcos, as they strive to find new revenue streams, and consumers shift toward data-intensive applications.
Analysts said one key area will be managing network and infrastructure costs while still providing a good user experience. As data consumption continues to increase, industry watchers said data analytics will be another growth area.
MyRepublic has said it plans to set large data caps of 12 gigabytes or more, should it be awarded the fourth telco licence by the Infocomm Development Authority of Singapore (IDA). If MyRepublic does that, some analysts have said this could put pressure on current pricing of tiered data plans, forcing the three major telcos M1, StarHub and Singtel to be more generous.
While this may be good news for consumers, it could impact the margins for telcos and their investment in infrastructure.
“With the potential of another operator coming to the market, the prices will go down and you might one day have unlimited packages,” said Mr Dustin Kehoe, programme director of AP Telecommunications at IDC Asia Pacific. “But you still have to ask the bigger question. If telcos are not making money, then they are not going to be investing in networks. And if they are not investing in any networks over time, the user experience will deteriorate.”
Singtel, StarHub and M1 have spent millions of dollars on data infrastructure and improving mobile connectivity. This includes seeking ways to switch subscribers seamlessly to wireless broadband networks to relieve the load on their mobile network.
Such solutions would improve the quality of the mobile network and potentially keep a rein on costs. The three telcos are already testing out solutions, most notably, in IDA’s heterogeneous network (HetNet) trial in Jurong Lake District.
“The answer to this is offloading this to Wi-Fi – offloading the data to fixed line network,” explained Mr Sachin Mittal, vice president of equity research at DBS. “Mobile has only limited capacity and it causes congestion, unless you offload to the fixed line. You need to put incrementally more and more capex and that is something they won’t do for free. So Singtel came up with this Wi-Fi offloading solution where you get a couple of gigabytes if you use their mobile network and the Wi-Fi.”
At the same time, growing data consumption provides more opportunities to grow revenue. Data analytics will continue to be an area of growth for telcos, especially if they can find creative insights and applications.
“Getting into things like precision advertising. Knowing something about your customers and offer them something relevant, given the context of a situation, maybe passing by a retail store and having something offered to them that is relevant. Another thing, they are doing here in this country in particular, is the analytics of tourists,” said Mr Kehoe.
“This is actually interesting information to pass on to retailers, to local governments for money, and that is another way to take data that you have on your network, anonymise it and monetise it,” he added.
Both Singtel and StarHub have already established analytics teams in a bid to capture growth in the segment.
Source: www.channelnewsasia.com
