Posted by: explodingman | September 17, 2007

iPhone in Singapore: A Prognosis

Ah, the saviour of phones. Finally someone bothered to make the phone as easy to use as it should have been in the first place. Some early adopters here have paid through the nose, and gone to the trouble of shipping in the iPhone and unlocking them.

iPhones!

Apple’s strategy is to dump the telcos in a boxing ring, and let them slug it out for the iPhone. Read Guardian’s account of the negotiations in UK (O2 wins Apple iPhone deal – at a hefty price).

Throughout discussions over marketing the iPhone in Europe, Apple has played off the UK’s four main networks – O2, Orange, T-Mobile and Vodafone – against each other. All of them, at one stage, believed they had an exclusive deal for the British market.

Apple has not officially divulged the cut of profits and other incentives that they pocket from such tie-ups. All that has been claimed by the company’s execs is that they want unlimited mobile data rates for iPhone customers due to the phone’s data-centric features like the Safari browser.

Mobile Safari

Unlimited mobile data

Will this herald the end of the ridiculous $10,000 per gigabyte charges that we are subject to currently?

Unlimited mobile data is really expensive here. It costs from $70+ to $100. And some telcos have weaseled in clauses in their T&Cs to give them the right to charge after a certain number of gigabytes are exceeded. That’s not “unlimited”.

The excuse that “international traffic is expensive so we have to charge high for mobile data” is tenuous at best, when unlimited ADSL and cable broadband rates here are not priced exorbitantly. Hong Kongers enjoy affordable mobile data plans, and AT&T charges just US$20 for unlimited EDGE for iPhone customers.

Green has already fired the first salvo with their unlimited MaxMobile plans, though as usual (like their “free incoming” plans) they are reluctant to commit to keeping the plan attractive indefinitely. (The 50% is only for their cable subscribers, and unlimited data ends when January 2008 comes unless they extend it.)

Red, Orange & Green

Now let’s look at the three telcos here, and allow me some room to make an educated guess based on what we’ve seen of these three in the past. (Bearing in mind the exploitative way almost all telcos worldwide treat their customers. Read my account.)

Red

The largest and most entrenched telco here. Due to their history as a government-owned entity, they have a very bureaucratic corporate culture pretty much like our civil service. It may be hard for them to move away from their “go by the book” mode of operation (e.g. Odex) due to the new way Apple is approaching the iPhone tie-up with telcos.

In the market, they usually take a reactionary stance, waiting for other competitors (especially Green) to make the first move, then following on with their own offers. Unlike the other two, Red is a large company, with more money to burn and more revenue streams, so they can usually turn out acceptable responses to the competition.

For them, it all comes down to how willing the are to break the mold and open their wallets to Apple. Their huge pipes to the internet would allow them to offer unlimited mobile data without taking much of a hit.

Orange

Started out after the mid-90s as a mobile phone operator and still remains one, while desperately exploring other forms of networks like WiMax to make money.

They also have a smack-talking CEO, which when quizzed about the iPhone at the recent CommunicAsia trade show, said:

If the iPhone is as successful as Apple wants it to be, it will only account for less than one percent of the total global phone production. It’s not going to make a major impact from an operator’s point of view.

We tend not to do exclusives because we believe customers should have a free choice, and it can’t be exclusive because you can’t lock phones to networks in Singapore.

Translation: I don’t think the iPhone will be successful. I can sell lots of other phones. I don’t usually do exclusive models.

Howver, just like all other telcos, they do go for exclusive models. (The Sony Ericsson K618i is exclusive to them.) To claim otherwise doesn’t make much business sense. Exclusivity is gold, especially when its a ground-breaking phone like the iPhone.

They are the most penny-pinching among the three (higher prices, less phone upgrading offers for customers, and even downright lying), so it seems unlike they will give in to Apple’s demands.

Furthermore, they are not an ISP so they cannot provide unlimited data plans without taking a hit like the other two (as evidenced in their 5GB cap on their once-“unlimited” wireless “broadband” plans).

Green

The youngest telco, though now bigger than Orange due to their acquisition of SCV. Like the other two, they also do some anti-consumer things, but occasionally, they have shown that they are willing to offer customers something of value to gain market share.

Anyone remembers when they blazed into the ISP market by offering free modem dial-up, when Red was still charging Singaporeans through the nose (time-based phone charges plus data traffic charges)?

They were the first to introduce free incoming calls while the other two were happily gouging customers by simultaneously charging for incoming and outgoing calls when land lines weren’t metered that way. (The other two resisted for a while, but had to give in.)

They also made other pro-consumer moves like per-second billing, free talktime rollovers, and more free SMS for customers who pay by GIRO.

However, internally, the company has a tight control on cashflow, and cannot match Red in terms of “money power”, so this might cause them to pull out of the deal.

If Green is able to stomach the conditions that Apple places on them, they might just nab the exclusive on the iPhone. They also have pipes to the internet, and their “only until December 2007” unlimited MaxMobile offer shows that they can provide unlimited data if they really want to.

Who will get the iPhone?

I would put Green as the most likely telco to nab the iPhone, and Red at second place, if they are able to jump over the hurdles of their legacy. Orange is as unlikely as Creative overtaking Apple in the MP3 player market, unless they get really really desperate.

When sell har?

That’s the question, isn’t it?

Apple hasn’t announced anything concrete besides stating “Asia 2008” in January 2007.

It will be sooner rather than end 2008, because Apple has recently hit 1 million in the US, and has set a target of 10 million iPhones by the end of 2008.

Unless the iPhones sell really well in other markets, they will have to roll out the phones worldwide as fast as they can when 2008 rolls around, otherwise its going to be embarrassing, stock price notwithstanding.

What can I do to prepare?

True number portability is coming in 2008, so we can switch telcos and take our numbers along with us.

In the meantime, do not sign any mobile phone contracts!

To prevent a massive fallout when true number portability is launched and the publicity machine gets underway, the telcos here are moving furiously to entice consumers to sign 2-year contracts by offering discounts on post-paid plans without requiring a phone purchase.

Apple, if you’re reading, bring the iPhone to Singapore quick! The country’s small. There are only three telcos. Its easy to roll it out here.

And by the way, when is the official Apple Store coming?

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Responses

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