Starhub, M1, Singtel And The Iphone Pricing In Singapore- Turning An Industry On Its Head
December 9, 2009 – 9:38 pm | by Daryl Tay
For the last year and a half, only one carrier, Singtel, had the rights to distribute the iPhone here in Singapore. Two days ago the other two telcos, M1 and Starhub announced their price plans and entered the market, generating lots of chatter everywhere.
Something interesting happened during this pricing scheme, which later led to somewhat of a “price war” between the three telcos. I think this is a really good case study to illustrate why you shouldn’t compare yourself with the competition.
When Starhub released its pricing plans earlier in the day, they modeled their pricing plan after Singtel’s. The basic plan started with 1gb of data usage at a price comparative to Singtel’s.
When M1 released their pricing plans later in the day, they didn’t even bother with what Singtel and Starhub were doing, and launched their basic plan at 10gb of data usage at a similar price to the other two.
In one bold move, by not limiting themselves to the existing paradigm, M1 turned the perception of data and price on its head. A day later, Starhub and Singtel upped the ante by increasing their basic plans to begin with 12gb of data (which really begs the question of how high the margins were on the original 1gb….).
In other words, they forced Starhub and Singtel to play on their terms, whether or not their networks could theoretically support that kind of data.
While this isn’t a perfect example because price is easily mimicked, this illustrates the power of not benchmarking yourself to what’s already existing in the market or what your competition is doing or offering.
For your next business decision, are you going to be a Starhub and mimic the status quo, or be an M1 and lead the way forward? You decide.
[also check out Daphne's take on the iPhone data war on her blog and Weimeng's take as well.]
[image credit: hongkiat.com]
Tags: data plan, iphone, iphone plan, m1, price plan, singtel, starhub
6 Responses to “Starhub, M1, Singtel And The Iphone Pricing In Singapore- Turning An Industry On Its Head”
By Benjamin Koe on Dec 10, 2009 | Reply
I also think this is a true reflection of actual data usage. My iPhone data usage hovers around the 500MB mark and so do many of my friends who use push email, web surfing, etc on their iPhones daily. Upping to 12GB is indeed a gimmick because they know on average most people won’t reach such caps. It’s the same principle used by airlines giving out free seats. They know on average that these seats will never be booked, so giving them away is no loss of revenue but great for marketing.
By Daryl Tay on Dec 10, 2009 | Reply
@Benjamin Koe: Thanks Ben. Yes it’s exactly marketing at work! I consider myself a “heavy” user and I only hit about 1gb a month, but just by offering 12gb it makes consumers think about what a good “deal” really means (and how long they’ve been having a bad one!)
By Wei Meng on Dec 11, 2009 | Reply
Benjamin Koe is absolutely right. What he is referring to is the concept of overselling, and all three telcos are actually not providing any additional value to the vast majority of customers, nor are they actually reducing their profit margins by any count.
Another point is that these data plans are only available to those signing up for a new contract and are planning to get an iPhone. For everyone else, the data plans and pricing does not apply.
You can read more about overselling and my view on the so-called “price wars” at my blog: http://weimeng.posterous.com/the-real-story-behind-the-singtel-m1-starhub
I was asked by a couple of friends about the new price plans but was finally inspired to write my thoughts down after reading your post.
By Daryl Tay on Dec 11, 2009 | Reply
@Wei Meng: Glad you joined the conversation! Again, I have to agree that it’s not necessarily a ‘better’ offering because within 48 hours we were pretty much back where we started (just that 12 is the default instead of 1), however it is about changing the mindset of consumers to no longer accept 1gb as the ‘default’ setting anymore (which benefits everyone!)