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Telcos move battle to mobile app turf

[SINGAPORE] The battle lines are forming as more over-the-top players pledge their respective allegiances to various telcos in Singapore's app wars. StarHub has signed on a second chat app partnership, this time with Japan's Line, on an exclusive basis for its pre-paid customers.

From Feb 15, StarHub's pre-paid mobile users will gain access to Line plans for either 40 cents a day or $6 for 30 days.

"Singapore's mobile pre-paid market has much room for further growth, especially in mobile data use," said Chan Kin Hung, head of mobility at StarHub.

"We believe our Line plan will be well received by customers, as they increasingly rely on fun, innovative social messaging services and stay online for longer."

To date, the pattern of telco-app pre-paid tie-ups has conformed to the local pecking order of telcos. Rival SingTel, the grand dame of the telco sector, exclusively brought onboard the grandfather of chat apps, WhatsApp, last year. This year, SingTel continued on this trajectory by signing up Facebook, the most popular social networking site in Singapore, albeit on a non-exclusive basis for its pre-paid customers.

StarHub, the second-largest telco here, also non-exclusively aligned itself with China's WeChat, arguably the world's second-largest chat app with 272 million monthly active users (MAUs) as of Q3 last year. The incumbent WhatsApp has more than 400 million MAUs.

While StarHub's latest partner Line claims 340 million users, this is based on the number of registered users that it has, which is inevitably higher than the number of MAUs - a more stringent metric.

M1, the smallest of the trio, has in turn partnered with relatively less well-known apps, such as music-streaming app Deezer and buffet app service All You Can App. So far, it is the only telco without a tie-up with a chat app.

The motivation for all three telcos, however, remains the same, as they turn to data usage to shore up sliding revenue from voice calls and text messages.

Even as consumers are increasingly reluctant to spend on the utilitarian services offered by telcos, they have been more receptive to the cuddlier elements offered by chat apps.

Last year, for example, was a banner year for Line, which saw revenue climb from 5.85 billion yen (S$73.4 million) to 15.6 billion yen over the first three quarters, fuelled by in-game purchases and virtual sticker sales.

Now, as telcos hitch their wagon to the rising star that is the mobile app in a bid to drive data monetisation, the proof of the pudding will be in the average revenue per user (ARPU) numbers.

It is early days yet, for the first app tie-up for the industry happened only in August with the SingTel-WhatsApp partnership. Over the course of this year, all three telcos' ARPU figures will reveal if this strategy of app alliances has paid off.