Singapore: Market Updates and the Digital Transformation Wave with 5G

There are currently four licensed telco service providers in Singapore—Singtel, StarHub, M1, and SIMBA Telecom (formerly TPG Singapore). For 1H 2022, Singapore Telecommunications (Singtel), the largest Mobile Network Operator (MNO) in Singapore recorded an increase of 10.6% Year-Over-Year (YoY) for mobile service revenue to ~US$214.6 (S$309) million, a mobile Average Revenue Per User (ARPU) increase of ~14% to ~US$22 (S$32), and a mobile postpaid subscriber base growth of 2.3% YoY to ~2.86 million. According to Singtel’s Annual Report 2022, it also reported that of its ~2.86 million postpaid subscribers, more than 450,000 or ~16% of its subscriber base were using 5G services. For the same period, StarHub recorded a mobile service revenue of ~US$186.3 (S$268.3) million, an increase of ~3.8% YoY, ARPU for postpaid mobile subscribers at ~US$20 (S$29) for a 5% YoY increase, and mobile postpaid subscriber base growth of 5.4% YoY to ~1.52 million. StarHub announced in its 1Q 2022 business performance update, that it had over 400,000 5G subscribers.

Across the same period, M1’s mobile services revenue increased ~3.25% YoY to ~US$176.4 (S$254) million and postpaid subscribers increased 8.5% YoY to ~1.78 million. SIMBA Telecom, the primary business entity of Tuas Limited (ASX:TUA) incorporated in 2020, posted revenue of ~US$39.9 (S$57.4) million on a 78% YoY increase, an ARPU of ~US$6.40 (S$9.19), and 587,000 active mobile subscriptions. The company also mentioned in its FY 2022 results presentation released in September 2022 that its 5G sites started carrying traffic on a technical basis from October 2022 and that it would be targeting a launch of its 5G Standalone (SA) and Voice over New Radio (VoNR) in 1H 2023.

With one of the highest mobile phone penetration rates in the world and the first in the world to be fully covered by standalone 5G, the take-up rate of 5G mobile services in Singapore has been surprisingly low with conservative estimates at approximately 16% and 26% of postpaid subscriber base for Singtel and StarHub, respectively. Recent ABI Insights have estimated the 5G penetration rate of China’s big three MNOs to be an average of 57% (“China: Updates and Market Opportunities in the World’s Largest Next-Generation Mobile Network Market”); South Korea’s big three MNOs at an average of 50% (“South Korea: Pushing 5G Boundaries with Extended Reality, Multi-Access Edge Computing, and Urban Air Mobility Technologies”); and Japan’s big four MNOs at a 5G penetration rate average of 18% (“Japan: Enabling Virtual Entertainment, Retail, and Industrial Applications with 5G”).

The market momentum for consumer 5G in Singapore has lagged behind peers, such as China, South Korea, and Japan. 5G mobile services plans (Subscriber Identity Module (SIM) only) across Singtel, StarHub, and M1 range from US$12.45 to US$31.30 (S$17.95 to S$45), and even though 5G plans are an average of US$5.60 to US$10.40 (S$8 to S$15) more than regular 4G plans, the local demand for 5G has been generally lackluster, even as Singapore is one of Asia’s prime hubs of affluence. Consumers are aware of 5G and there is a buzz around it, but the subscription numbers seem to suggest that consumers appear indifferent to 5G and that proactive upgrading to a 5G subscription is not a priority.

In the area of enterprise 5G in Singapore, though spending intentions are strong, the pace of 5G adoption and commercial viability are still in the early stages. Widespread 5G use cases and large-scale trials are not yet seen like those in China, South Korea, and Japan where 5G has been deployed extensively in heavy industrials, healthcare, smart cities, Extended Reality (XR), metaverse, Artificial Intelligence (AI), Urban Air Mobility (UAM), and a whole host of innovative use cases and applications.

Although adoption is still in the early stages, telcos have been actively identifying potential 5G use cases. StarHub and the National University of Singapore (NUS) have partnered to incorporate StarHub’s 5G and Internet of Things (IoT) solutions on the University’s campus. There is a wide variety of potential 5G and IoT applications in the case of smart facilities management, such as building inspection, water management, landscape and waste management, campus security, and also Augmented Reality (AR)/Virtual Reality (VR) applications for immersive lecture experiences. Also, an outdoor Wi-Fi network supported by StarHub 5G SA services has been deployed in NUS, and touted as a first in Singapore; the fully solar-powered network aims to complement NUS’s indoor wireless network and offer a seamless online experience. This outdoor Wi-Fi network would provide fast and reliable connectivity in areas without Wi-Fi access previously. M1 has also expanded its enterprise 5G business and partnered with Keppel Offshore & Marine to implement Southeast Asia’s first maritime 5G AR/VR smart glasses solution to enhance remote operations. The telco has also partnered with Gardens by the Bay, a nature park in Singapore and Esports Pte Ltd (ESPL) to provide 5G connectivity and immersive metaverse experiences in the Gardens by the Bay’s indoor venue.

To help drive the adoption rate, Singapore’s telcos have developed solutions to ease the barriers of adoption for 5G enterprise. For example, Singtel launched Paragon, a platform that will allow its enterprise customers to tap into its 5G network to activate network slices, deploy mission-critical applications on the Singtel Multi-Access Edge Compute (MEC), and access an ecosystem of partner applications. Intel also partnered with Singtel to establish a 5G MEC incubator to help enterprises adopt 5G and drive innovation.

At the same time, the Infocomm Media Development Authority (IMDA), a statutory board, is also one of the prime movers of 5G in Singapore. The IMDA has been advancing 5G development since 2019 and has set aside a ~US$20.86 (S$30) million fund to accelerate 5G adoption and commercialization. Recently, it partnered with Infinite Studios and mixed reality company D.ink to develop an outdoor, 5G-enabled, and cinematic-quality AR experience and with the National University Health System, Singtel, and apoQlar to develop 5G-enabled holomedicine capabilities. The IMDA has also partnered with M1, Maritime & Port Authority of Singapore (MPA), and Airbus to conduct coastal 5G standalone network trials for UAM operations.

With 5G enabling new limits for wireless speed and connectivity, 5G has the potential to power up new possibilities for innovative applications for enterprise and consumer markets alike. The 5G wave in Singapore is expected to gain momentum and the telcos, businesses, and national regulator IMDA have been ramping up their 5G strategies with innovative deployments and investments. Enterprise 5G will become a primary driver for 5G growth and ABI Research expects to see broadening applications of 5G technology across different enterprises as use cases proliferate. Overall growth in 5G is expected to be positive and to continue with the support and investments from telcos, businesses, and the IMDA, but the successful monetization and adoption of 5G may be more dependent on smartphone lifecycles to drive switching. There are also lingering concerns that, despite hopeful signs amid the current economic uncertainties, there could be a marked slowdown in 5G investments as the base case adoption of 5G in Singapore “has yet to be developed” to further justify significant investments.

(Note: Conversion from Singapore dollar (S$) to U.S. dollar (US$) is based on prevailing currency exchange rates.)