M1 CEO: Mobile data prices need to come down

Mobile operators need to rethink how they price their 3G data plans to better compete with fixed-line broadband services, according to the top executive at Singaporean operator MobileOne (M1).

"Operators need to move forward," said Neil Montefiore, M1's chief executive officer, in a phone interview ahead of the Telecom World exhibition and conference organized by the International Telecommunication Union (ITU) in Hong Kong.

Last week, M1 announced plans to offer a faster 3G data service based on HSDPA (High-Speed Downlink Packet Access), an upgrade to WCDMA (Wideband Code Division Multiple Access) networks that increases download speeds from 384Kbps to 3.6Mbps. That service will be available in Singapore starting Wednesday.

Rather than increasing its prices with the introduction of the faster service, M1 decided to offer users of the existing service a discount. It dramatically cut the price of its 3G data plan that offers unlimited access, from S$68 (US$44) per month to S$22 per month,. In addition, M1 introduced two HSDPA data plans with unlimited access -- one offering a maximum of 1.8Mbps and another offering 3.6Mbps -- for S$38 and S$68, respectively.

Mobile data services based on 3G technology are generally expensive to use, partly because operators charge for data using a per-byte or per-minute pricing model similar to voice. As a result, 3G data services primarily serve business customers who can afford the premium charges, rather than the average mobile user.

"We've got to look to the future," Montefiore said. "We've got to be competitive with current fixed broadband prices."

Prior to the price cut, M1 sold about 500 3G data cards each month to users who wanted mobile data access. What impact the new pricing levels will have is not yet clear, but Montefiore does not expect to see a dramatic surge in adoption.

These mobile user numbers could rise, as most Singaporean broadband users are still locked into 24-month service plans for their existing broadband connections, Montefiore said. "Over time, it will be an attractive way to get online," he said, adding that M1 will offer a more detailed forecast in January when the company announces its financial results.

Telecom World runs through Friday, Dec. 8.