SingTel, StarHub face revolt as World Cup fees surge

May 21, 2010
Singapore Democrats

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Simeon Bennett
Bloomberg

Singapore Telecommunications Ltd. and StarHub Ltd., Singapore’s two cable-television providers, face a protest from more than 20,000 soccer fans after raising fees to watch next month’s World Cup sevenfold to the highest in Asia.

The increase from the previous tournament four years ago, announced May 7, prompted local resident John Chua to rally disaffected fans on a Facebook Inc. page, including Kelvin Chan, who plans a public demonstration in the city center next month. Some viewers will instead tune in to free-to-air broadcasts of the games from neighboring countries, Chua said.

“It’s a clear case of exploitation pricing,” he said in an e-mail. “They have no concern for the public even under this economy crisis and think that we will pay regardless.”

Federation Internationale de Football Association, soccer’s ruling body, generated $1.7 billion in TV rights sales for the World Cup as of the end of 2009, 85 percent of its target, according to the group’s financial reports. Zurich-based FIFA earned $1.66 billion from selling broadcast rights to the 2006 event in Germany.

SingTel and StarHub paid $15 million for the rights, triple the amount StarHub paid in 2006, Singapore’s Today newspaper reported May 1, citing people it didn’t identify. The two companies declined to disclose the amount because of confidentiality agreements.

‘Dollar a game’

“They pay about a dollar a game to watch in the comfort of their homes,” Edward Ying, SingTel’s chief of content and media services, said May 7, according to Channel NewsAsia. “I think they can afford it. It is less than a cup of coffee.”

SingTel and StarHub said they are in talks with MediaCorp Pte., Singapore’s state-owned broadcaster, to show the opening game, the two semi-finals and the final on free-to-air TV. The two companies will show all games for free at 16 community clubs across the island, they said in a statement yesterday.

“The rights to broadcast the 2010 World Cup did not come cheap,” Caitlin Fua, a StarHub spokeswoman, said in an e-mail. “The cost has escalated significantly.”

Chan, the fan planning a public demonstration, said in an e-mail that it will take place at Speakers’ Corner, a venue allocated for public protests, pending government approval.

The Facebook protest group, which had 21,432 members as of 5:37 p.m. local time, was formed two days after SingTel and StarHub said they will charge existing subscribers S$70.62 ($50.52) if they sign up by May 31, or S$94.16 thereafter to watch the month-long tournament that starts June 11 in South Africa. For the 2006 World Cup, StarHub charged early subscribers S$10.50.

‘You’re off!’

Chua’s group plans to print t-shirts that say “I choose not to subscribe,” and red cards that say “You’re Off! SingTel, StarHub,” mimicking the cards referees use to eject soccer players for foul play. Protesters plan to drink coffee at the demonstration to satirize Ying’s comments.

“I didn’t expect such a strong response,” Chua said. “I am very proud that everybody is standing united against something that is wrong.”

The charges make Singapore the most expensive place to watch the World Cup in Asia, based on data compiled by Bloomberg. In 2006, viewers in the region tuned in 8.3 billion times to watch games at the tournament in Germany, one-third of the global total, according to FIFA.

Other nations

This year, all 64 games will be shown free in nations including the U.K., Australia, Turkey, China, Vietnam and Indonesia. Walt Disney Co.’s ESPN won’t charge U.S. subscribers any extra to watch the 54 games it’s showing, and the other 10 games will be broadcast free on Disney’s ABC.

In Malaysia, Singapore’s closest neighbor, Astro All Asia Networks Plc won’t charge existing customers extra, and those who sign will pay 66.95 ringgit ($20) a month for at least 12 months, said Lee Choong Khay, the company’s sports business head, in an e-mailed response. Malaysia’s state-owned free-to-air Radio Televisyen Malaysia will show 24 games live, including the finals, and 11 with a delay, RTM said in a statement.

Hong Kong’s I-Cable Communications Ltd. won’t charge more from sports package subscribers. Customers on cheaper packages and new subscribers will pay HK$289 ($37) for the channels where the games will be shown, requiring them to sign up for two years. The first match, semi-finals and final will be shown free-to-air.

Watching the World Cup will be more expensive in the Middle East, where Al Jazeera will charge existing subscribers in the six countries that make up the Gulf Cooperation Council $100, or $175 for new subscribers for one year.

Profit gain

SingTel, Southeast Asia’s largest phone company, posted a 12 percent increase in fourth-quarter profit to S$1.02 billion on May 13. Profitability in Singapore worsened as it spent more to add content to the mio TV service, including outbidding StarHub for the Barclays Premier League rights. StarHub’s first- quarter profit fell 48 percent to S$42.7 million, it said May 6.

SingTel shares have fallen 0.3 percent in the past year, making it the worst performer on the benchmark Straits Times Index, which has gained 21 percent. StarHub’s stock has advanced 3.8 percent.

The two companies submitted joint bids for the rights, which FIFA rejected in favor of separate non-exclusive agreements, StarHub’s Fua said.

Chua said he plans to watch games at pubs and coffee shops, or on Indonesian or Malaysian channels, some of which can be received in Singapore with an antenna.

“There are plenty of ways to catch it,” Chua said. “It’s not like we will be missing out.”

http://www.businessweek.com/news/2010-05-20/singtel-starhub-face-revolt-as-world-cup-fees-surge-update1-.html