Telecoms group Singtel is preparing for a new phase of pay-TV competition in Singapore, moving domestic IPTV unit Singtel TV into its main consumer arm at the start of its new financial year to sit alongside its voice, fixed and mobile broadband services.

“The battle in Singapore has shifted,” says Goh Seow Eng, MD of Home, a new stable for Singtel’s TV, broadband and fixed voice businesses.

“It’s no longer about triple play, it’s about quad play now,” Goh tells Media Business Asia. “It’s all about bundling.”

The move also signals a growing maturity for Singtel’s eight-year-old pay-TV business, which was rebranded from Mio TV earlier this year.

Previously Singtel TV had been housed in Digital Life, a media and digital services division set up in 2012 at arm’s length from the rest of the group to focus on emerging digital businesses with medium-term goals.

Singtel’s pay-TV revenues are on a good growth trajectory, up 35% Y/Y to S$236 million (US$182 million) for its most recent financial year (ending March 31), mainly on the back of stronger Arpus, which rose 32% over the same time-frame, from S$31 (US$24) a month in 2014 to S$40 in 2015.

That’s mainly due to increased access to content, as carriage agreements are renegotiated to comply with cross-carriage regulations, enabling Goh to focus marketing efforts on Singtel TV’s premium Value Pack, which includes the full channel suite.

The pay-TV provider added channels from Turner and NBCU at the start of the year after prior contracts with StarHub expired December 31. More carriage deals are up for renewal this year, including Discovery, HBO and Sony.

As more channels come on board, Singtel TV’s packaging will likely need further tweaks, Goh muses.

“Those days of not having enough channels to sell and selling a la carte – those days are over,” he says. “Now it’s all about selling big packs, the bigger the better, while also selling DVRs, second set-top boxes, things like that.”

The importance of Arpu

Higher Arpu will also help cover rising content costs. Singtel is also likely to moderate its sports spending, possibly sharing bids for Euro 2016 and Barclays Premier League (BPL) rights with main rival StarHub.

Goh is confident that Singtel TV’s Arpu will catch up with StarHub – the market leader on S$51/month – within 18 months. After that competition shifts fully to value-added services, while running the business better, with pay-TV playing a major role in a bigger bundled proposition.

Both sides are setting up improved ratings systems, commissioning research agencies to collect return-path data (RPD) from set-top boxes, while recruiting data analysts to make sense of it all, to better understand viewing behavior across multiple devices.

Singtel’s number-crunchers are housed in DataSpark, a new unit within Digital Life that also provides external consulting services.

Initially, this can help with ad revenue as well as content and carriage decisions. Two channels have entered performance-related deals with Singtel, related to their peer ranking, although it is tough persuading others to come on board.

Longer-term, indexing multiple data sources can help discover new business areas for both StarHub and Singtel, providing a variety of broadband-related services, from health to education to entertainment.

Developing these additional revenue streams, however, is going to take some time.

“That’s always the ambition,” Goh says. “We have the data. The very, very difficult challenge is making sense of that data. It is terabytes of data. We’ve got something like 25 data scientists downstairs – we still find it’s not enough.”

Under-served audiences

In the more immediate term, there is more that Goh can do to sustain Singtel TV’s growth.

Chinese programming remains underweight in the portfolio, pushing Goh to explore content from mainland China, to complement existing fare from Taiwan as well as regional player, Celestial Tiger Entertainment.

Singtel TV also operates its own in-house channel, Jia Le, which broadcasts in both Hokkien and Mandarin. Singtel recently co-produced a drama for the channel with Taiwanese broadcaster Sanlih, but Singapore’s market size limits the scope to significantly scale up investment.

Goh is also evaluating ways to approach the ~27% of Singaporean non pay-TV homes, possibly through a subsidized set-top box in the hope of upselling to paid content – echoing StarHub’s strategy – or through an OTT service, which could be supplied separately by Singtel’s SVOD subsidiary, Hooq.

High-speed broadband is almost ubiquitous in Singapore, providing a readymade distribution channel into lower-income households, as well as heightening competition from pirated services.

Hooq’s entry into Singapore depends on the timeline and resources of Hooq’s CEO Peter Bithos, Goh explains.

For the moment, the company – which launched earlier this year as a JV with Sony Pictures and Warner Bros – is concentrating on large growth markets in South and Southeast Asia in a bid to build scale.

Hooq, responsible for its own programming deals, has already secured Filipino, Indian and Thai content, in addition to Hollywood films and shows.

As of today however, it’s still short on Chinese and Malay fare that would help drive uptake in Singapore.

“It could be early next year, it could be this year,” Goh says.

“Singapore is always a challenging market. Even if Singapore is wildly successful for Hooq, it’s not going to move the needle, due to Singapore’s small size relative to the big markets in South and Southeast Asia.”