The Group and its associates launched the iPhone 3G in Australia on 11 July 2008 and in Singapore, India and the Philippines on 22 August 2008. Presently, both SingTel and Globe are the sole operators to offer iPhone 3G activations in Singapore and the Philippines respectively, while Optus and Bharti are amongst multiple operators with rights to offer
iPhone 3G activations in their markets. The launch of iPhone 3G has met with robust demand from customers with more than 170,000 iPhone activations for the Group and its associates in the September quarter.
In Australia, approximately 55% of the total activations were mobile customers new to Optus and it is estimated that Optus accounted for the majority share of iPhone 3G activations in Australia during this period. In Singapore, approximately 30% of the iPhone activations from 22 August to 30 September 2008 were mobile customers new to SingTel.
In line with the Group’s policy, mobile subscriber acquisition and retention costs are expensed immediately on activations. Higher subsidy costs are associated with iPhone 3G. Consequently, the successful iPhone 3G initiative will have a dilutive impact on earnings and margins in the near term.
For the second quarter ended 30 September 2008, the incremental impact of iPhone 3G activations reduced EBITDA by approximately S$27 million in Singapore and approximately A$44 million in Australia.
As part of the launch initiative and to encourage rapid adoption of data and media rich applications, mobile subscription plans with generous data allowance were introduced. iPhone 3G subscribers generally deliver higher ARPU than the postpaid subscriber average. Early usage indications showed that iPhone 3G subscribers delivered an ARPU of approximately 1.5 times higher than the overall postpaid base. Both SingTel and Optus require iPhone 3G postpaid activations to a minimum contract period (12 or 24 months, depending on plan types) and over this contract period, iPhone subscribers will deliver positive value.
The Group is confident that this strategy of expanding and acquiring high value data-centric 3G subscribers is value accretive. Integrated handset devices and smart phones, including the iPhone 3G, are key to driving mobile data revenue growth.