StarHub CEO: Carriers should get a cut of app revenues

with Neil Montefiore, CEO of Singapore's StarHub
with Neil Montefiore, CEO of Singapore's StarHub

Neil Montefiore, the former CEO of mobile operator MobileOne, recently returned to Singapore to take the helm of MobileOne competitor StarHub. At Mobile World Congress in Barcelona, Spain, last month, Montefiore sat down with FierceWireless Editor In Chief Sue Marek to talk about the Singapore mobile market.

FierceWireless: Is StarHub upgrading to 4G?

Montefiore: We currently have HSPA+ 42. All the mobile operators in Singapore are similar. We all have fiber backhaul so we don't have the congestion problems. We also are looking at deploying femtocells and with the iPhones we are looking at Wi-Fi offload. Most of the data on the mobile networks doesn't come from smartphones but from dongles and laptops--about 70 percent of the mobile data comes from them.  

FierceWireless: Do you anticipate having network congestion issues?

Montefiore: I think we will have congestion problems with the increase in smartphones. On the postpaid side, about 90 percent of our customers use smartphones, dominated by the iPhone but the Android phones are coming on strongly too.

There is strong demand for the iPhone in Singapore. All mobile operators got the iPhone at the end of 2009 and from that date on the number of phones sold in Singapore doubled every month. And it's stayed that way. 

But Android is starting to grow. We had a good spell with Motorola and now we have HTC devices. Tablets are starting to sell as well. The iPad is popular but it is not doing too much on the network.

FierceWireless: What is your smartphone penetration?

Montefiore: We have about 1 million postpaid customers and about 60 percent have smartphones. That number is from two months ago so it has gone up from there. The prepaid market tends to be more foreign workers who mainly use the phones to call home.

FierceWireless: When you are here at Mobile World Congress and you are talking with other mobile operators, do you find that your challenges are similar to their challenges?  

Montefiore: I think we have similar issues. Verizon is very similar but obviously much bigger. They have content and they just got the iPhone. Like them, we would like to monetize the investment we made in our networks in terms of the data traffic. That's what all the operators are looking at right now. If the revenue from the applications all goes to third parties then there won't be any more investment in infrastructure. The only way that will be corrected is by forcing people to invest in infrastructure. I think we have to monetize the data carriage in a different way.

FierceWireless: Carriers talk about open APIs and adding value to the applications. Are you doing that now?

Montefiore: I think we have to look at what the customers are doing. Who is providing that service and what are we charging them? I think we need to go to the content provider and say, ‘If you really want the consumer to have that and you need the content to go as fast as that, then you have to pay for it.'

No one has decided how to charge for this yet. We are measuring the customer experience in real time so we can decide where we invest to give the customer what they want.

FierceWireless: Are you looking at tiered pricing or application-based charging?

Montefiore: The CEO of France Telecom was speaking at the GSMA Leadership Forum and he said that 60 percent of the data traffic is generated by 10 percent of the base. In Singapore 90 percent of the data traffic is generated by 3 percent of the base. Some are paying too much and some are paying too little. We really have to rebalance this. And it's up to the operators within the GSMA to get together and figure this out.

FierceWireless: The U.S. operators are very cagey about this. 

Montefiore: I think it's because of the net neutrality issues. In Singapore we are going through a consultation with the regulators on this.

FierceWireless: Do you plan to deploy HSPA+ 84 and LTE?

Montefiore: Yes, we plan to deploy HSPA+ 84, and we also did a trial of LTE at 1.6 GHz and also in our 800 MHz spectrum. We think we will refarm that for LTE. We just completed the trial.

But we won't deploy HSPA+ 84 until next year, and LTE will be after that. The base stations are all ready for LTE now so it will be an easy upgrade.