SingTel – BT

SingTel says hello to iPhone; other telcos may follow suit

Advantage may be brief as all S’pore players may sell it by year-end

Singapore Telecommunications (SingTel) and its associates have clinched the prized right to sell the iPhone across four markets in Asia. Apple’s recent departure from exclusive operator tie-ups, however, means the red camp’s competitive advantage is potentially short-lived.

In a statement released yesterday, SingTel finally confirmed it will be distributing the iPhone in Singapore later this year. In addition, the operator said its three regional units – Optus, Bharti Airtel and Globe Telecom – will also be part of the collective agreement and are set to take the coveted device to Australia, India and the Philippines respectively.

The announcement ends months of speculation over whether SingTel will be given first dips at selling Apple’s flagship smart phone in Asia. Industry experts have repeatedly pointed to the telco’s ability to negotiate a multi-country deal – due to its stakes in various regional operators – as a major factor that would eventually swing Apple’s decision in its favour.

With its slim touchscreen design, music functions and the availability of numerous add-on applications, the iPhone has already won over nearly 5.5 million fans since its debut in the United States last June. Although it is not officially available in Asia, gadget-crazed fans have been buying the handset from parallel importers and Internet auction sites, often paying a premium to be among the first to own the device.

The iPhone’s immense consumer appeal has prompted early resellers such as US operator AT&T and O2 in the United Kingdom to agree to Apple’s demand for a cut of subscriber revenue in return for exclusive selling rights. This approach, a first in the mobile phone industry, has been met with much resistance in Asia, particularly in markets such as China and Japan where talks have reportedly stalled due to Apple’s insistence on revenue-sharing.

SingTel declined to confirm if it had agreed to such terms. The company also did not provide details of the iPhone models to be made available, as well as pricing and launch dates across the four markets.

The current iPhone is only compatible with second-generation cellular networks, and an enhanced 3G (third-generation) version which supports functions such as video calling and high-speed Internet access is rumoured to be in the works, and could be unveiled as early as next month at an Apple conference in the US.

In Singapore, however, SingTel can be expected to reveal more information over the coming weeks in anticipation of the arrival of ‘true number portability’ on June 13. This is a new government mandate to allow mobile subscribers to retain their phone numbers when they switch telcos.

The move is expected to intensify competition in the mobile market and all three operators – SingTel, StarHub and MobileOne (M1) – have been trying to land the iPhone since last year to better their chances of retaining and drawing new customers when the new regime comes into effect.

‘With the right conditions, such as scarcity in the open market, attractive SingTel subsidies and price plans, we can certainly see customers moving to SingTel for the iPhone. But more than that, SingTel will be hoping to do what AT&T did in the US – to drive up data usage and revenues,’ said Aloysius Choong, a research manager with analyst firm IDC Asia-Pacific.

‘There may be some hardcore Apple fans who may actually switch to SingTel to get their hands on the iPhone. But I think we are not likely to see a huge impact on SingTel’s market share as a result of this development,’ said Soh Siow Meng, senior analyst of global telecom services at Current Analysis.

This is because the grey market has already taken some shine off the SingTel deal, and the likelihood of other local operators offering the iPhone adds to the subdued impact, he told BT.

For example, Vodafone confirmed last week it has secured the right to sell the iPhone in 10 countries, including India and Australia – two of the destinations covered under the SingTel agreement. This is a telling sign that Apple is increasingly moving away from its initial strategy of having exclusive operator tie-ups as it seeks to grow iPhone sales globally.

When contacted, both StarHub and M1 admitted that talks with Apple are still ongoing. ‘We expect all three operators would be offering the iPhone by the end of the year,’ a StarHub spokesman said.

SingTel shares closed unchanged at $3.71 at the end of trading yesterday.

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