[SINGAPORE] The recent moves towards more consolidation in the telco space will allow companies such as Circles to focus on innovation, said Rameez Ansar, co-founder and chief executive officer of the virtual telco.
His recent comments come hot on the heels of surprise news a fortnight ago of Simba acquiring M1. The move will bring the number of mobile network operators (MNOs) in Singapore down to three: Singtel, StarHub and the M1-Simba entity.
Ansar weighed in on the consolidation in an interview with The Business Times, stating that it was “not surprising”, with mergers and acquisitions commonly taking place in other countries such as Australia, Indonesia and Malaysia.
“I think we were lost in a bubble,” Ansar said, noting that the price per gigabyte (GB) of data in Singapore is now lower than in some countries in Africa because of the telcos’ price competition.
Circles, parent company of mobile virtual network operator (MVNO) Circles.Life, entered the market back in 2016 and began offering mobile data plans that were substantially below market rates.
Circles.Life runs on the M1 mobile network, but Ansar does not see the consolidation as a significant risk to their business.
He said that network infrastructures are increasingly commoditised, but reiterated the importance of commercial contracts between MNOs and MVNOs.
Beyond Pricing
It feels like tables are turning as newer MVNOs such as StarHub’s Eight and Singtel’s GoMo are flooding the market with cheaper plans and seizing market share from the legacy MVNO players, including Circles.
Eight, for instance, offers 388 GB of 4G mobile data with 10 GB of Asia-Pacific roaming data for only S$8 a month.
Circles too has been offering attractive promotions, including 350 GB of 4G mobile data for S$12.80 a month for three months. Following which, the mobile plan will revert to 150 GB of 4G mobile data for S$15 a month.
“Typically, around 20 per cent of people will not care about customer experience and customer service, and they will move to the lowest price,” Ansar said.
But Circles is also aware that it cannot keep competing on the basis of price.
The key to differentiating Circles in Singapore is not through price, but through continuous innovation, he emphasised. “When you are cutting costs, are you really innovating?”
Innovation is back on the table
Now that the market has consolidated, Ansar’s view is that this is generally good for price stability, which then allows for both MNOs and MVNOs to focus on innovation. This will allow technology and customer experience to become the key differentiators, he added.
“People will start investing in the right things – network, quality, infrastructure and IT systems,” he said.
Innovation does not happen at the infrastructure level, Ansar said, noting that infrastructure in fact actually makes MNOs less innovative, since they are driven by the number of assets instead of focusing on customers.
Circles has looked at ways to improve its product and disrupt the legacy business model in Singapore. One of the ways to disrupt was to be “customer obsessed”.
Stemming from his personal experience, he wanted to find new ways to enhance customer experience for Singaporeans. The best way, he found out, was through chatbots and text messaging.
“Our differentiation was our digital platform and our customer experience, but you have to really change the DNA of what it means to customer experience,” he said.
For example, Circles has integrated ChatGPT into its app, allowing customers to utilise artificial intelligence (AI) for their daily needs. On top of that, the app also includes games which can be played for rewards such as extra mobile data.
On Friday (Aug 22), the group also announced a global collaboration with AI heavyweight OpenAI to build “a fully AI-native telco platform”.