Giant telcos call for help as travellers ditch roaming plans

Quantity doesn’t spell profit for both SingTel and StarHub.

The country’s two biggest telcos appear to be pouring cash into a leaking bucket, as Singapore’s travellers are beginning to forgo their roaming plans for other applications.

In spite of increasing investments and stellar subscriber growth, SingTel’s and StarHub’s average revenue per user (ARPU) remain tanked in 1Q14.

According to UOB Kay Hian, SingTel’s and StarHub’s post-paid ARPU declined 2.9% and 3.8% yoy respectively to S$66/month and S$75/month.

This decline could be chalked up to the fact that the telcos’ main roaming customers, who are often frequent travellers, are now switching to other data applications.

According to UOB, “This segment suffers more from cannibalisation on roaming revenue as
customers switch to using data and social networking applications.”

SingTel’s and StarHub’s post-paid subscriber base grew at 9.7% and 5.9% respectively in 2013, and both companies continued to maintain expansion of post-paid subscriber base at 10.4% and 5% respectively.