Telcos’ tiered data plan pricing fair: IDA

The Infocomm Development Authority (IDA) says that the tiered pricing of telcos for 3G and 4G data plans is fair.

Writing to Today in reaction to a reader’s letter titled “Why are regulators silent?”, Ng Sook Fun, director of corporate and marketing communication at IDA, pointed out that telecom operators everywhere face challenges in managing consumer demand for broadband bandwidth against limited network resources.

“Tiered bundled data, instead of unlimited data, is a common approach by mobile operators to ease network congestion,” she said. “In a situation where a flat rate applies to all users, the effect is that the majority of average users subsidise the minority heavy users.”

“A tiered pricing structure is generally fairer for different users with different usage volumes,” she asserted.

Ng also explained that it would be more sustainable if pricing decisions made by telecom operators were subjected to the free play of market forces rather than to be determined by IDA.

Telecom operators offered 12-gigabyte data bundles for 3G and 4G data plans in 2009, without IDA’s intervention, she noted.

The authority believes that direct intervention would create a loss of confidence into a fully liberalized market discourage industry players from innovation and creating competitive prices for consumers.

In early June, Singapore’s biggest telco SingTel launched the country’s first 4G service for smartphone users, with the promise of faster internet speeds but with the catch of less generous free data cap plans.

Currently, SingTel smartphone users have up to 12GB of free data cap, while those on the premium plan receiving up to 30G of free data.