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Fixed line still of value in homes, businesses

Despite rising use of mobile phones as sole device for voice calls, low cost and bundling with other services make landlines still attractive, say Singapore telcos.
Written by Liau Yun Qing, Contributor

Despite the rise of mobile phone usage, fixed-line connections are still a valuable proposition to consumers and businesses, telcos in Singapore say.

According to statistics from Singapore's ICT regulator the Infocomm Development Authority (IDA), the fixed line household penetration rate as of September 2009 stood at 96 percent. Residential fixed line subscriptions stood at 1,117,000, a minimal increase from September 2004's 1,104,500.

Mobile penetration, in contrast, reached 135.3 percent two months ago. Subscriptions totaled 6.7 million in September, an 81 percent jump over 3.7 million recorded during the same period in 2004.

Local fixed-line market leader, Singapore Telecommunications (SingTel), reported in an e-mail interview with ZDNet Asia, that the increased usage of mobile phones for voice and Internet access has caused voice and data traffic associated with its fixed line connections to decline.

Cost and bundling advantages of landlines
However, fixed connections still remain attractive to consumers and business, a SingTel spokesperson noted. Its fixed-line service not only offers "a very affordable means of communications" for consumers but also allows them to connect to broadband Internet and its IPTV (Internet Protocol television) service mio TV.

For the three services, SingTel provides a bundled plan priced at S$46.90 (US$33.66), which includes the residential line, broadband connectivity of 6Mbps and unlimited viewing of 15 movies per month coupled with 10 percent discount on mio TV content. Separately, a residential connection costs S$29.43 (US$21.12) for three months, while a 6Mbps broadband plan and mio TV subscription cost a minimum of S$35.90 (US$25.76) and S$9.90 (US$7.10), respectively, a month.

Fixed-line services also remain "relevant and vital" for businesses, the SingTel spokesperson added. "For example, it is common for companies to have a main contact telephone number manned by switchboard operators who help to connect callers to staff members within a company. And intra-company calls by dialing extension numbers do not incur phone charges."

Over at StarHub, another local fixed-line service provider, the attraction of the fixed-line service is in its low cost. "Although some households in Singapore now solely depend on mobile phone for communication, we believe there is still demand for landline service as it offers lower-cost calls locally," a spokesperson said in an e-mail.

StarHub, offers residential phone lines as a "free value-added service" to all its broadband and cable TV customers. The spokesperson noted that customers would save at least S$100 (US$72) a year from free local voice calls and the lack of subscription fees. Its home phone subscriptions have doubled from a year ago to 200,000 this year.

Battle between copper and cable
The two telcos use different technologies to provide fixed-line phone connections in Singapore. SingTel uses copper phone lines, while StarHub relies on its cable network.

According to SingTel, copper-based fixed-line services offer benefits such as reliability and security, convenience, power-efficiency and has the ability to accommodate feature expansion. Customers enjoy calls with little or no interference, and unlike a digital phone service, its network is not impacted by virus attacks or other online threats.

Customers only need to plug into the landline socket to make calls, and are able to retain their telephone numbers even if they reside at a different location. The spokesperson explained: "Even when they shift houses or business locations, they can retain their SingTel fixed line number wherever they relocate. There is no need to rewire or renovate the entire home as there are no wiring complications involved."

She noted that its fixed line service also does not affect customers' utility bills as it is independent of the power supply. In addition, users are able to make calls in the event of a power outage.

StarHub, on the other hand, said it expects copper lines to be replaced in the future. "We expect that fixed-line services would move from copper wires to IP networks over time for enhanced services and cheaper phone calls," the spokesperson said.

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