What Are MVNOs in Singapore and What Makes Them Different to Traditional Telcos?

 

In recent years, Singapore’s hyper-competitive telecommunications market has been set apart by the small but rapidly growing number of mobile virtual network operators (MVNOs). 

MVNOs are telecommunications companies that provide services to their customers without owning their own physical network infrastructure. Rather, MVNOs lease or rent network capacity from telecommunications companies that do own the needed hardware. Singapore-based MVNOs lease capacity from traditional providers such as Singtel, Starhub, M1, or Simba, and then offer their often lower-priced services to customers under their own brand name.

In Singapore, MVNOs have risen in popularity, thanks to the value they offer to a wide range of users. If you, like many students and small businesses, are looking for the cheapest SIM only plan in Singapore, chances are, you’ll only find what you need with an MVNO.

How Do Singaporean MVNOs Stay in Business?

To understand how MVNOs are usually able to offer low data rates to customers, we need to understand some basic facts about traditional telcos. 

Traditional telcos have to invest in the maintenance, repair, and upgrading of their network infrastructure. Because this infrastructure is expensive, the major telcos often need to pass on some of the costs to their customers. Additionally, owing to their size, these major telcos often need larger operating margins to better manage their risks, further contributing to higher data rates.

MVNOs can sidestep most of these issues, thanks to their smaller sizes and due to them not having to invest in expensive network infrastructure. This allows them to offer more competitive pricing and more flexible plans to very specific sets of customers. Additionally, most Singaporean MVNOs often have a strong focus on specific customer segments, which allows them to run more efficient, higher-converting marketing campaigns. For instance, some focus on offering affordable data plans for younger users while others specialise in bespoke data plans for businesses. 

Popular Singaporean MVNOs include Circles.Life, giga!, Grid Mobile, and Zero Mobile. While their specific target niches and offers differ, these companies typically offer competitive pricing, customisable plans, as well as unique offers such as data rollover or rewards programs. However, given that MVNOs do not own their own network infrastructure, they may have less network coverage or more limited customer support compared to the traditional telcos they lease from.

Are There Advantages to Sticking with Traditional Telcos?

Traditional telcos benefit immensely from owning their own network infrastructure. This allows them to offer wider coverage as well as more reliable connectivity, allowing them to better attract and retain customers that prioritise high service levels. Additionally, most of Singapore’s traditional telcos are established brands with strong customer bases. 

Notably, major telcos tend to have more resources for marketing and advertising. While their lack of a specific focus means that their marketing and advertising don’t convert as well as a typical MVNO’s, the size, scale, and sheer consistency of their campaigns give them widespread recognition that simply isn’t afforded to even the largest MVNO businesses.

What Are the Benefits of Using an MVNO in Singapore?

While MVNOs only have a small market share in Singapore, this has been growing in recent years, thanks to steady marketing as well as wider recognition of the benefits they offer. Here are some of the main advantages of switching to an MVNO:

1. Lower Cost: The most compelling reason to switch may be the lower data costs. Outside of a few exceptions, Singapore-based MVNOs tend to have more affordable plans compared to traditional telcos. As mentioned earlier, this is mostly down to their focus on specific customer niches, lower margins, and lower operating costs due to not owning their own telecommunications infrastructure. Users who want to save as much money as they can on their mobile phone bills should, therefore, consider switching to an MVNO.

2. Flexible Plans: While traditional telcos have generally become more flexible than they used to be, MVNOs usually have them beat in this area. Most MVNOs offer a wide variety of plans with different amounts of data, talk time, and SMS messages. This allows users to choose plans that closely match their communication style. This flexibility is a major reason why MVNOs are popular with younger people as well as with small businesses.

3. Innovative Features and Promos: MVNOs in Singapore continually try to gain market share through innovative services and features. For example, some local MVNOs offer data rollover, where unused data from one month can be carried over to the next, allowing budget-conscious users to save even more money. Many MVNOs are also constantly offering rewards, freebies, and other incentives to entice value-oriented customers to switch providers.

4. No Contract: Some local MVNOs offer plans with no contract. This makes them especially compelling for customers that do not want to be locked into a long-term commitment. This makes MVNOs popular with a growing number of businesses and power users that want the flexibility to switch plans or providers depending on their needs.

Should You Switch to an MVNO?

MVNOs offer value-conscious users a great way to save on their mobile data expenses. While Singaporean MVNOs still only have a much smaller market share compared to the larger players, their rapid year-over-year growth indicates that there is a healthy demand for what they offer. Ultimately, however, MVNOs are highly specialised businesses that appeal to very specific niches. But if you happen to be in one of those niches, it may be worth your while to shop around for a provider that can better meet your needs.