Nov 21, 2005
Cheaper broadband not just for new users
I REFER to the article 'Cheaper broadband, finally' by Alfred Siew (ST, Nov 15).
As a loyal customer of SingNet since my first dial-up connection in December 1997, I was appalled to find that SingNet has 'quietly' reduced its broadband rate of 512Kbps to new customers from $45 to $36.75 a month.
By signing customers to a contract, SingNet has effectively locked in existing customers' choice of Internet service provider (ISP). Customers are locked in to SingNet with a contractual commitment of two to three years.
Customers are discouraged from switching to a rival ISP by penalties of early termination and the inconvenience of changing one's e-mail account.
Lock-in has serious implications when the ISP practises price discrimination. It is unfair for existing customers to know such a strategy is practised to increase profits by charging lower prices to non-customers who have a lower valuation of the service, while existing users can only look on.
By practising such discrimination, SingNet risks losing its name as the leading ISP in Singapore. My fellow loyal SingNet users and I agreed such marketing tactics could change our decision to stay with SingNet.
Singapore broadband service already lags behind other places like South Korea and Hong Kong.
By liberalising the market with lower prices, ISPs can make broadband available to everyone - which will benefit SingNet as well from the positive network externalities analysed by Mr Siew.
With lower price disparity, more dial-up consumers will find it rewarding to switch to broadband.
Thus, I urge SingNet to cut prices across its customer base, for both higher profits and consumer benefits.