New virtual telco Zero Mobile aims to attract with unusual deal

This article is more than 12 months old

A new virtual mobile telco is setting up shop in Singapore with an unusual proposition - it charges more for mobile services than its competitor but lets subscribers shrink their bills if they refer others.

Zero Mobile, which is due to start mobile services this month, charges $45 a month for 6GB of mobile data and unlimited local calls and SMS - about 60 per cent higher than the prevailing rate here.

But customers can get a recurring credit of $9 a month for every person they refer to the service, capped at five. With five active referred customers, a Zero Mobile subscriber effectively gets his mobile services for free.

It also charges new subscribers a "joining fee" of $50, a fee no other telco here currently imposes.

The company, based in Australia, picked Singapore as the first country to launch in. It is the second virtual mobile telco to enter the Singapore market after Circles.Life.

Virtual telcos do not build their own physical mobile networks, but lease them wholesale from one of the existing telcos. Zero Mobile's partner is Singtel, while Circles.Life works with M1.

Circles.Life has a referral programme but offers more mobile data as a reward instead. It charges $28 a month for a similar plan.

Mr Daniel Waters, Zero Mobile's chief operating officer, told The Straits Times: "We have modelled our business in a manner where revenue derived directly from the subscriber is not our primary source of revenue."

He added that its Zero App - for service activation, billing and managing subscription plans - will feature deals from undisclosed retail partners in fashion, electronics, gaming and travel. Subscribers can get discounts on their bill by using the marketplace in the app.

Pre-school teacher Ms Jasmine Kaur, 34, said of the strategy: "People at the bottom of this referral marketing scheme do not benefit much. If someone discontinues the service, people who referred them will stop receiving the credits."

Mr Waters responded: "We certainly do not classify it as a multi-level marketing strategy because this is a short-term campaign for three months only and not our ongoing business model."

The Straits Times understands there will be other promotions that could allow users to drive down their bills to zero after the three months.

For now, sign-ups for its service can be done online until Dec 15. Zero Mobile will start activating its service around Christmas, and for up to 5,000 subscribers.

It will advise how many more customers it can activate every month from next month.

Explaining the sign-up limit, Mr Waters said: "We have to ensure we have a balance of inward revenue from other avenues on our platform while providing a quality, premium service to subscribers. Our first priority is our sustainability."