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SingTel’s WiFi move could spur other telcos to offer hybrid plans: Analysts

Telco analysts say SingTel's move to offer combination WiFi and mobile data plans could spur other operators to explore offering integrated plans.

SINGAPORE: More telcos in Asia could introduce hybrid mobile broadband and WiFi plans. This is according to telco analysts, who have said SingTel's move to offer WiFi to its mobile users could spur other operators to explore offering integrated plans.

As mobile devices become increasingly popular, telcos are looking at how to cater to data-hungry customers. One of the things that can really consume data is the activity of streaming videos over one’s smartphone. Now more people are expected to watch videos on-the-go. So for a mobile operator, it means more capacity is needed for its network.

By shoehorning WiFi into its mobile plans, analysts said SingTel is - like some telcos in western countries - trying to offload data usage from one broadband network to another. In this case, it is to transfer a significant amount of traffic from 4G to WiFi running on fixed infrastructure.

Naveen Menon, head of Communications, Media and Technology Practice at AT Kearney Asia Pacific, said: "Delivering video traffic over a mobile network is expensive. But if it is delivered over a fixed-line network, it is incrementally cheaper to deliver data over a fixed-line network, especially if you are an incumbent like SingTel that already has fixed infrastructure in place."

While SingTel has to face upfront costs of setting up WiFi hotspots, analysts said it will save money over time, compared to depending on base stations for mobile networks to serve the increasing appetites of data gobblers.

In other words, SingTel's operating costs are expected to be lower. It also means good news for customers demanding higher standards of service.

Mr Menon said: “If you are linked to a base station, you may get a signal, but you may not have the capacity, in which case having a WiFi offload where you can access data through a WiFi hotspot can actually be helpful in addressing the capacity issue."

SingTel's latest offering raises the question of whether it will raise the entry barrier for operators aspiring to enter the Singapore market. Analysts said it is still too early to tell, but they expect that this is something regulators would keep tabs on. 

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