In the last year, several mobile operators have launched services in the Asia-Pacific region. What are they doing to grab market share from incumbent telecom operators more established than them?
Rakuten Mobile, Japan
Operating as a MVNO since 2014, Rakuten Mobile received approval to be Japan’s fourth MNO in April 2018. The company began limited services in October 2019, only launching full scale commercial 4G services six months later with a single service plan at JPY2,980 (US$27.39) per month, offering unlimited data usage. Its coverage area at launch primarily comprised of the urbanised regions of Tokyo, Nagoya and Osaka. Rakuten had initially set aside JPY600 (US$5.57) billion to build out 27,397 base stations to achieve 96% population coverage, however this is expected to be increased 30-40% with planned base station 44,000.
Additionally, Rakuten Mobile is purportedly the first in Japan to be offering “untied” contracts with no SIM-lock, minimum subscription periods or penalty for cancellation. To kick off its service it has given out free services for the first year to three million customers. Its 5G services, which were postponed from April 2020 due to the pandemic, were launched in September 2020.
Rakuten Mobile aims to differentiate itself from incumbents – NTT, SoftBank and KDDI – as a “end-to-end fully virtualized cloud native mobile network” which Rakuten claims has reduced capex and opex, enabling it to offer services at a lower price point. For example, it is able to offer unlimited domestic calls through its proprietary OTT communications app dubbed “Rakuten Link” that enables not just in-app communication, but also domestic and international communications with other mobile phones not using the app, so long as the phone is connected to Wi-Fi or cellular network. The app also allows file transfers, a feature that conventional SMS does not support. When a customer signs on to Rakuten Mobile, it is receiving not just connectivity, but also a constantly updating technology ecosystem created by Rakuten, ranging from e-commerce to travel, that will eventually be integrated with the mobile business.
Rakuten Mobile also develops and offers its own mobile devices, such as Rakuten Mini, purportedly the smallest and lightest FeliCa-quipped smartphone.
TPG Telecom, Singapore
In 2016, Australia’s TPG Telecom, founded by businessman David Teoh, won the fourth telecom license in Singapore and was provisionally allocated 60MHz of spectrum. In the subsequent years, TPG Telecom proceeded to deploy its mobile network across the island nation, spending A$340.1 (US$264.8) million in capex from 2016 to 2019, including A$124 (US$96.8) million on spectrum. TPG managed to achieve 99.89% outdoor coverage and 100% indoor QoS validation of buildings tested by January 2020.
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To stimulate customer interest, while simultaneously gathering feedback on network quality, TPG offered a 12-month free trial to the first 20,000 registrations. By February 2020, the trial had been expanded – although the duration of free service reduced from 12 months to 6 months – with over 400,000 users on the service.
Following the merger of TPG Telecom and Vodafone Hutchinson Australia, the Singapore business was spun off as a separate business with its own shareholders.
TPG launched commercial services in March 2021, severely undercutting its rivals – Singtel, M1 and StarHub – with a SIM-only plan at S$10 (US$7.54) per month for 50GB, the cheapest in the market at that point. In the run up to TPG’s impending launch, incumbent MVNOs and MNOs began launching SIM-only plans without lock-in periods, prices fell and data caps drastically increased. However, it is uncertain if TPG’s price will be sustainable in the long run.
DITO Telecommunity, Philippines
Originally a little-known minor telecom company established in 1998 known as Mislatel, it became a vehicle for a consortium led by Udenna Corporation, a conglomerate controlled by Filipino businessman Dennis Uy, and China Telecom through acquisition. China Telecom has a 40% stake in the consortium while the remaining shareholders include Phoenix Petroleum and PH Resorts Group.
With much fanfare, President Duterte, who had long maligned the incumbent telcos PLDT and Globe Telecom for poor service, personally handed the Certificate of Public Convenience and Necessity (CPCN) to Mislatel in July 2019 and challenged the consortium to break the longstanding duopoly in the industry. The company was renamed “Dito”, which means “here” in Tagalog.
DITO has set itself the goal of commanding at least 30% market share through a “service to service fight” on the basis of quality of service. In February 2021, the National Telecommunications Commission announced that DITO had passed its first-year technical audit, in which it was assessed to have achieved its commitment to deliver an average broadband speed of 27 megabits per second and 37% population coverage. It has earmarked PHP257 (US$5.3) billion over 5 years in capex to cover 84% of Philippines’ population.
In March, DITO launched commercially in 15 area of Visayas and Mindanao with a welcome package at PHP199 (US$4.10) per month for unlimited data and DITO-to-DITO on-net calls & texts.