SINGAPORE (July 29): More than half a year after the highly anticipated launch of TPG Telecom, Singapore’s long-awaited fourth telco, its services have been found wanting. A recent report by mobile analytics company Opensignal highlights the deficiencies of TPG’s coverage.
After luring customers with $0 plans and unlimited data, the telco has been providing lower-than-average download and upload speeds. At 26.1 Mbps and 5.1 Mbps respectively, both speeds were more than 50% slower than those of the three main mobile network operators. Apart from slower data speeds, TPG customers also experienced “no signal” 4.5% of the time, compared with the next worst telco, M1, whose customers found themselves without a network signal 1.6% of the time.
To be sure, even before TPG started operations in Singapore, the Australia-based telco had reportedly experienced a series of hurdles. It had to ask the Infocomm Media Development Authority (IMDA) of Singapore for an extension in order to be able to fulfil its coverage conditions, citing difficulty in getting locations to place its cell and radio towers.
Su Lian Jye, principal analyst at ABI Research, says: “Cell sites and radio towers are essential for network coverage. Finding the right location for a land-scarce city like Singapore is even more challenging. Incumbents such as M1 and StarHub already have some level of cell site sharing agreements, which increases the difficulty faced by TPG to set up its networks.”
TPG’s outlets are little more than shells — bare shoplots with plastic tables and exposed vents, where customers can pick up their SIM cards. At the same time, the three incumbent players have also fought back, effectively starting a mobile plan price war. Singapore Telecommunications launched GOMO, a no-contract plan promising 20GB of data for $20. StarHub and M1 also launched SIM card-only plans.
“Surprisingly, incumbent telcos decided to kill the business case of TPG by launching cheaper price plans, even at the cost of hurting themselves,” observes Sachin Mittal, an analyst at DBS Group Research.
Mittal is also surprised at TPG’s performance even though it has only about 200,000 subscribers. After all, with fewer subscribers, the network performance should be better. Indeed, analysts have determined that much of TPG’s troubles stems from underinvestment.
“[Capital expenditure] by TPG is too low to pose a threat [to the incumbent telcos],” says Mittal. “As at February 2019, TPG had spent only $102 million in cumulative capex on its Singapore rollout, or 36% to 53% of its planned $200 million to $300 million of capex.”
A possible explanation for TPG’s lack of investment in this new market is that it could be looking further ahead and conserving resources for the rollout of the 5G network. That would require new infrastructure and equipment. IMDA has proposed for Singapore to have two 5G network operators, with other telcos leasing spectrum and bandwidth.
Nevertheless, by the end of last year, TPG did achieve its requisite milestone of 95% outdoor coverage. In a statement for 1HFY2019 results ended Jan 31, the company says its network build “continues to progress well”. And while early trials did not offer voice calls to numbers on other telcos, it appears that TPG has managed to secure interconnection agreements since then.
International calls and SMS services are still not available for TPG customers, though. Recently, TPG announced a trial for international roaming in Malaysia and Indonesia, which indicates some success in securing roaming agreements, according to Mittal.
Number portability is also not on the cards for TPG customers, who would have to get a new number rather than port their existing number over to TPG. The lack of services that other telcos already offer can further affect the take-up rate of its services.
“Underinvesting in infrastructure means poor quality of service and will force TPG to differentiate on price rather than service quality. Not being able to offer a bundled service experience also makes things challenging for TPG,” says ABI’s Su. “It will take a while before TPG can finally offer the full telco experience.
“While it is imperative for TPG to invest a lot more in rolling out its radio access networks and core network, the telco also needs to consider possibly adopting virtualisation and [artificial intelligence] in its workflow, akin to Rakuten Japan, which is disrupting the Japanese telco industry. These capabilities may be capital-intensive in the early stage, but will bring significant savings in the long run.”
Still, Su says TPG’s poor performance “is not unexpected for a new network”.
“TPG will become a disruptor, but the market is very saturated right now with independent mobile virtual network operators and telco MVNOs.
“In addition, some customer segments are probably not ideal for TPG. For example, new MVNOs are actively targeting young, no-frills consumers, which may not be the right target market for TPG. Having the right service positioning will ultimately determine how TPG can utilise its resources in a more optimal manner, especially in this crucial early stage.”
TPG’s Australian parent company is currently undergoing a merger with Vodafone Australia.
TPG had not responded to The Edge Singapore’s requests for comments by press time.
