Majority likely to accept rate hike
Analysts cite benefits of land line, but some users plan to cancel service
By Serene Luo
NEWS that SingTel will increase fixed lines charges come January has proven to be the last straw for some customers who plan to ditch the service, which is already waning in popularity.
Marketing manager Dolly Cheng, 36, is among those who plan to rely solely on their mobile phones after SingTel said this week that it would raise subscription charges for land lines by $10 a year.
She and her IT-professional husband, who get about five calls a week at their Bishan flat, have been considering cancelling the line for the past year.
While the increase is not huge, 'that $10 extra a year just gives us an immediate reason now to just do it', she said.
On Monday, SingTel announced that it would, after 18 years, increase subscription charges to $110 annually, and up tariffs by 0.1 cent.
A minute-long call will cost 1.6 cents during between 9am and 7pm from Mondays to Fridays, and 0.8 cents at other times.
SingTel cited increasing wages and rising copper prices as reasons for the price increase.
In recent years, the number of fixed lines in Singapore has been dropping. There were almost 90,000 fewer in July this year than in 2001.
Over the same time, the number of mobile phone subscriptions has doubled to more than 6 million.
But analysts believe land lines are not obsolete as yet.
That is because:
Fixed lines, made of copper, give better voice quality than other current options, including Internet calls.
Calls on low-bandwidth broadband lines are prone to glitches.
Fixed-line rates are still much cheaper than other options, such as mobile calls. For instance, SingTel's rate of 1.6 cents per minute for calls is one-tenth that of mobile phones.
Consumers may find staying with fixed lines more convenient than switching to other options.
Businesses that want to switch to Internet phone calls could face downtime during the changeover and have to publicise new numbers, said Mr Kamlesh Kalwar, an industry analyst with research firm Frost and Sullivan.
Though some people will feel the pinch because of recent increases in power bills and transport fees, most will understand the adjustment, he said.
Mr Foong King Yew, a research director with research firm Gartner, said the increase is unlikely to hamper businesses.
'Fixed-line local call charges are only a fraction of the total operating cost of many large businesses here,' he said.
serl@sph.com.sg
