Singapore telcos told not to charge existing subscribers for 4G
Singapore's three telcos have been ordered not to charge existing subscribers for 4G services, which have been labeled value-added services (VAS) by local players, but they've not been instructed to do likewise for new subscribers.
The Infocomm Development Authority (IDA) said there had been "significant confusion" among consumers over service plans they signed up for, following StarHub's recent announcement to begin charging its SmartSurf subscribers an additional S$2.14 a month for tapping its 4G service.
The local telco last week said it would implement the fee from June, becoming the first market player to do so. StarHub had begun offering its 3G subscribers 4G access as a free VAS since September 2012, but this promotion would end next month.
Around mid-2012, Singapore telcos--M1, SingTel, and StarHub--had begun slashing their previous 12GB data cap to 2GB across most of their mobile data service plans.
In its statement released Wednesday, IDA said it had "investigated" StarHub's move to start charging for 4G services and deemed it to go against the Telecoms Competition Code, which states telcos must communicate key terms and conditions to customers prior to service signups.
"Telecoms operators should not change prices mid-way that affect customers with minimum term contracts, if they were not clear to customers upfront what those price changes might be," the industry regulator said, adding that mobile operators should have done more during points of sale to explain their 4G VAS position to subscribers.
"IDA has clarified the matter with the three operators. All the operators have since decided not to change 4G service prices for existing customers with minimum term contracts," it noted.
StarHub promptly released its own statement late-Wednesday, though making no direct reference to IDA's comments. Instead, the telco's senior vice president of mobility, Chan Kin Hung, said the company decided to "further extend the free promotion" of its 4G service after "careful consideration". He added that existing subscribers of SmartSurf Lite, Value, Premium, and Elite price plans will enjoy the promotion until the end of their contracts.
Chan further noted: "In regard to this promotion, we have been upfront with customers. Details of this service, including pricing and promotion expiry, have been made available in our sales and marketing materials as well as on our website since its introduction in September 2012."
While StarHub made no direct reference to IDA's statement, it is quite clear the telco is disputing any suggestion it was not "up front" about its charges.
IDA, though, appeared to have no issue that 4G services have been labeled as VAS by the local telcos.
"Today, 4G services do not support voice and SMS services; these services are delivered over the 3G network. IDA understands that M1, SingTel, and StarHub have offered 4G services as part of their mobile data bundle promotion and have positioned them as VAS in their promotional materials and service terms and conditions."
In its statement, the regulator also did not state that the same no-charge stance should apply for new subscribers, leaving telcos room to do so--that is, as long as they "communicate" these charges to consumers before signing them on new service plans.
Feedback on market competition, possible fourth mobile operator
In a separate announcement Tuesday, IDA said it was seeking public consultation to assess interest among mobile virtual network operators (MVNO) in offering next-generation national broadband network services.
There are currently six MNVOs in Singapore, selling mobile services under their own brand over bandwidth they purchase at wholesale prices from the country's three telcos. MNVOs do not own their own infrastructure or spectrum, and service mostly niche segments such as foreign workers living in Singapore.
"IDA wants to inject more competition in the mobile market, which could lead to lower prices and more innovative services. Niche markets could also be better served," a spokesperson said.
Part of efforts to introduce more market competition may include the introduction of a fourth mobile operator, the regulator said. IDA is also considering plans to set aside more spectrum--up to 450MHz--over the next six years to facilitate mobile broadband services such as 4G as market demand increases. It is now seeking feedback from industry with regard to technical issues and timelines to allocate the spectrum.
Public consultation on all issues, including support for or against a fourth mobile operator, is slated to end May 20.
For the benefit of those unfamiliar with the Singapore market, Virgin Mobile launched in October 2001 as the country's fourth mobile operator--though, as a joint venture with SingTel--but exited a year later after failing to capture enough subscribers.