SingTel m-Commerce or mCash

Source: SingTel Website
So there is one more option for people to remit money out of Singapore and this is from SingTel.

It is expected to be launched in a few days time and the first place will be Philippines or Globe GCash. This is a good 'try' to expand in to new business areas. However I am not sure whether this is another 'try' which is going to be short lived.

The market is there and Philippines getting 21 Billion dollars (US) in remittances. In Singapore, I don't have the stats but some what old document shows the estimates to SEA from Singapore are around 4-5 Billion Dollars (Source) in 2005. I'm sure this figure is easily doubled and if I take 10 Billion now and 50% of it going to Philippines it'll be ~ 5 Billion.

Other way is by looking at total number x average remittance. Which is ~100,000 (80,000 FDW + 25,000 other permits) and in an average if they are sending $ 250 / month that would be close to $ 3 Billion / Year.

Question is what % SingTel or other telco's can get from this amount. If it's even 3% that's going to be wonderful for SingTel.

Based on my observation, typical remittances are depending on "other party" or "recipient" rather then the "sender" convenience. If the recipient prefers to use GCash or Gcash channel this might be a success. If the other party prefers to go for normal channel, then this is going to be few weeks/months publicity.

So Globe customer base is approx 30 million and market share is ~ 30-35% in Philippines. Also in rural areas (where I guess the recipients are located) their presence is not as strong as PLDT. So this could be a negative point for them.

Overall if Globe can execute this well, this will bring some additional cash to SingTel bottom line. If Globe fails, this will fail.

Globe Telecom to start major transformation project

Source: Here

Globe Telecom (part of Ayala Group, Philippines) embarking on a massive transformation project. The main focus is on Quality and capacity expansion. If we see their recent results, their costs are increasing steeply while the revenue is stand still.

After PLDT merger with SUN (here), Globe certainly need to change to improve its position. I believe they are moving in the right direction. Their biggest problem is the Voice + SMS. Ironically philippines is the country with highest sms usage and this is where Globe performing poorly. No wonder their market share is just going south.

The cost structure should be changed and they should focus more on the network/infrastructure. When Globe started their operations they've had one of the best infra. But after 8 years (after their major upgrade) now the network is old, not supporting the change in the usage pattern, and mttr is low and mtbf is high.

I am going to meet one of their senior exec soon and will share more info later on..

PLDT DIGITEL Merger in Philippines

Source: PLDT

I was quite busy over the past few days at work & home so I din't talk about this news. But no surprise to me. After the AT&T deal, I am looking forward to more consolidation and Philippines started the ball rolling on.

This is certainly a very good deal for PLDT & Digi. Digi is the new entrant in the market and the third largest player or the smallest among big three (Smart, Globe, Sun). Now the market becomes pre-2005 situation where the Smart & Globe were head-on with each other. If I're to do a simple SWOT from Globe perspective,

Strengths:


* Globe is aggressively expanding the network and with the new network it can better handle the competition
* Good support from investors and possible learn from Optus (part of SingTel group in similar situation in Australia) to break the dominance of PLDT
* Potential NG-NBN which may create more opportunities


Weakness:


* Old networks, and the expansion taking few more years, Coverage still a problem in remote areas & country side.
* New technologies require huge capex and difficult to head-on with rival with deeper pockets
* PLDT has end to end value chain (Broadband, Wireless, Fixed, Satellite & Media firms) and owns lots of content. Globe WiMAX - LTE strategy is still not clear and lacks content.


Opportunities:


* Duopoly is better and those customers who doesn't like Smart may look at Globe
* Without SUN, the price erosion may be stopped. The bucket strategy may be gone :) and margins may see improvement


Threats:


* Globe will face the PLDT in it's strongest form.  & with the scale of PLDT can manage their costs and in turn still can offer cheap prices which Globe cannot offer. Market share erosion/stagnation
* New entrant in to the market/regulatory intervention(?)

Overall for Globe, the situation is not as bleak as it looks. If Globe can change the processes and optimize its structure they have a very good opportunity to improve their situation.

I always believe that the TELCO core competency is transporting packets from one end to another end and if they can deliver efficiently and effectively they don't have to worry about OTP or whatever new entrants. Given the fact that todays business driver is 'Data', it makes perfect sense for Globe to look internally to optimize their cost structure. One easy way is to look at Bharti and their managed services model. Bottom line is either need to increase the revenue or decrease the cost. Given the situation I doubt Globe can increase the revenue (they can stabilize) but they can reduce the cost. Being part of the Singtel group, I believe they can get the details of Bharti deal with relative ease/Or they can simply start working with vendors (e.g. Ericsson, NSN, ALU, Huawei) to optimize their cost structure

In year 2009, Globe's EBIDTA margins're healthy 54% (Look here for a comparison) and if they can maintain that would keep them in the top league of performers.