Brickbats came in fast and furious when the chief executive officer of Singtel, Singapore’s largest telecommunications operator, said in a Bloomberg Television interview on 12 February that the entry of a new operator into the Singapore market would hurt the industry.
“The only way that they can gain customers will be by way of reducing prices,” Chua Sock Koong, Singtel’s chief executive officer, said during the interview. “The existing operators would look at how best to respond. Clearly just leading prices down, it’s not good for the sustainability of the industry.”
It might have simply been a spontaneous but ill-conceived remark that was uttered during a television interview.
But it did not help perceptions that Singtel was timid of competition, especially when Singtel reported a 1.7% drop in net profit, in the third-quarter of its fiscal year, that same day. The drop in net profit was blamed on weaker contributions from overseas operations caused by a strengthening Singapore dollar.
Ms Chua’s remarks were made in reaction to Singapore’s plans to auction off radio frequencies for use by a fourth carrier this year. Singapore currently has two smaller phone operators, M1 and StarHub, in addition to Singtel.
MyRepublic is an Internet service provider that has expressed an interest in bidding for the new license.
Its CEO, Malcolm Rodrigues, said in reference to Singtel: “The incumbents’ networks are not ready for the future. There is a desperate need for innovation in Singapore. We intend to bring it.”
Ms Chua was later forced to clarify that she did not mean Singtel was averse to competition or lower prices.
Roaming charges abolished in Europe. Will ASEAN be next?
Regional integration has had the effect of liberalising telecommunications markets, and forcing telecommunications companies to compete to offer customers better prices and services.
From June 2017, mobile phone roaming charges will be abolished in the European Union (EU). This means that anyone who has a British mobile phone plan, for instance, pays the rate for texts, calls or data in the United Kingdom as in France, Poland or Cyprus, or in any of the 28 member states of the EU.
“After 10 years of tireless fight, roaming is over,” Viviane Reding, the former vice-president of the European Commission and rapporteur for the Trade in Services Agreement, declared. A victory for consumers and a stepping stone towards a truly European digital single market.”
The move had been part of a decades-long process of creating a single market in the EU, from the movement of goods and services, to people, and now to the digital markets.
And while the depth of integration of the single market in ASEAN may not be anywhere as great as in the EU, there have been moves towards some form of liberalisation of the market of mobile phone operators.
In 2011, Malaysia and Singapore agreed to reciprocally lower mobile phone roaming charges for calls and texts. More recently in September 2014, Brunei and Singapore signed a bilateral agreement to mutually reduce international calling and data roaming rates. Other ASEAN countries are considering entering into similar arrangements.