SingTel's IPTV threat to StarHub looming in the distance

But is StarHub seriously worried about SingTel's hedging advances into the scene? StarHub has had at least two years to prepare — roughly the same length of time that SingTel has been dropping hints of a full-scale IPTV rollout.

For StarHub, the threat is clear —using the IPTV medium allows SingTel to share and add to existing content currently only available through StarHub.

Yet, such a reality is unlikely to happen as soon as might be expected, says Claudio Checchia, research manager of consumer markets at IDC Singapore. According to him, the local infrastructure has some way to go before a telco can support a real-time IPTV service with critical mass.

Although both telcos have launched broadband speeds of up to 30mbps, take-up rates of the premium-priced packages have reportedly hovered at around only 10 per cent. Most households still run on less than four mpbs, while a live-streaming IPTV service requires speeds of between five to 10mpbs. Price and scalability, according to Checchia, may prevent Singapore from adopting the new medium as fast as, say, Hong Kong has tuned into Now TV.

Meanwhile, new players have emerged, most recently M2B World and MediaCorp's MobTV. M2B's channels broadcast Korean dramas and Hollywood films; MobTV lets consumers watch MediaCorp's free-to-air channels via broadband. However, Checchia says these are still niche, pre-recorded channels which are unlikely to lure unique customers. "The real appeal these days is in 24/7 channels like CNN and BBC, not in video-on-demand," he says.In the meantime, StarHub has used the hold-up to solidify its hubbing platform — the bundling of multiple communications services — to retain and acquire pay-TV subscribers, whose penetration has stagnated at 35 to 40 per cent since it launched in 2004.

"We see a much lower churn rate from multiple-service customers than those with single service," says Patrick Lim, VP, cable TV services, StarHub. "We are very targeted at getting multi-product sign-ups to build stickiness and loyalty."

Aside from hubbing, StarHub has also been aggressively enhancing its pay-TV offering. This year alone, the company's services have mushroomed to include 28 new Demand TV channels, a Tamil-language and Smart TV, an offshoot of Tivo.

StarHub released an IPTV service of its own last year, iView. However, given that its content offering paled next to its own pay-TV package, many regard it as a value-added service, instead of a viable alternative.
Whether SingTel is eyeing StarHub's current pay-TV clientele, or the untapped 60 per cent, or the more likely mix of both, remains unclear. Either way, consumers have more competitive prices and a better variety of content to look forward to.