Friday, October 31, 2014

Which mobile plans offer the best value?

There are currently 20 mobile phone plans with data, from Singtel, M1, and Starhub. The plans are quite diverse - some offer more data, others more talk time, and some free incoming calls. Which offers the best value?



A simple way is to draw a scatter-plot of the price of the mobile package against a key characteristic, for instance the amount of data provided. This is shown in the chart below. Dots below the best-fit line provide better value than average, as you get more data for a lower price, while dots above the best-fit line provide worse value than average.


Source: companies' websites

However, plans differ in many other ways. A plan might be above the best-fit line because it might, for instance, have unlimited talktime and SMSes.

To account for this, I first collected data on six characteristics for each plan - the amount of talktime, SMSes, data, whether the plan has unlimited talktime, free incoming calls, and unlimited SMSes. I then ran a regression - think of this as drawing a straight line through all these variables in 7 dimensional space (the earlier scatterplot was in 2 dimensional space).

Some quick tidbits from the regression:
  • Free incoming calls are not free. Plans with free incoming calls add about $7 to the price on average
  • Every 1GB of data adds about $12 to the plan on average

In the second step, I calculated the "distance" to the best-fit line for each plan. A negative distance means the plan is below the line, so it could be good value for money. The results are summarised below.
Source: author's calculations
The plans with the best "negative distance" measurements are the Starhub "4G 3" and M1 "Lite +" plans, possibly because they provide more data relative to other $40-ish plans. The Starhub "SmartSurf HD Value" plan also stands out for its 600 minutes of talk time and unlimited SMSes.

Do Singtel plans, with positive distances, give customers poor value? Not necessarily, as Singtel might command some premium due to its good reputation, as well as its strong outdoor coverage. Some value these, whereas others might not. While I've looked at 6 attributes here, preferences differ from customer to customer. Ultimately, what constitutes "good value" is up to individual.

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