Quick question – what’s your favorite telecom provider? If you can’t come up with an answer, you’re probably not alone, as the industry is notoriously loathed by consumers for engaging in predatory practices. In Singapore, however, the barely two-years-old MyRepublic has emerged as a David player among Goliaths like SingTel and Starhub, by offering up 1 Gpbs connections to the country’s fiber broadband network for about SG$50 each month.
While it might seem preposterous to found a “telco startup,” MyRepublic CEO Malcolm Rodrigues told the audience at Startup Asia Singapore 2014 that the company is doing just fine – it’s currently signing up 2,000 new customers a month, and looks set to triple its annual revenues from US$5 million to US$15 million this year.
During an on-stage interview with Tech in Asia’s Terence Lee, Rodrigues attributed MyRepublic’s strong growth to what he calls the “thin operator model” – in essence, lean startup economics in an industry where competitors tend to be chubby.
“We think we’ve re-engineered the economics of a telco,” said Rodrigues. “Today we bill and invoice about 25,000 customers. All the invoicing and the CRM system is in the cloud. When I was at a telco before MyRepublic, we spent about $300 million dollars on an IT platform. [At MyRepublic] we built a cloud-based CRM and accounting system using the best stuff available and stitching it together through open APIs. I’d say we spent about 80,000 bucks to do that, and our running cost is around 3,000 dollars a month.”
The lean economics pay off once customers are roped in due to the nature of the telco business – by offering a utility, customers tend to only switch providers after long periods of time.
“The telecom is a beautiful business,” says Rodrigues. “It’s all recurring revenue. When you’re selling software packages, you have to find new customers every month. But in telecom you basically can take month off, and you still get recurring revenue coming in.”
Rodrigues stated that MyRepublic currently occupies one percent of the market for internet service providers, and hopes to reach five percent in the coming years. While hitting that target would still give the company a comparatively small slice of the pie, its customers and supporters might wonder if the under player might turn into “another telco that everyone hates.” Rodrigues believes that his company’s commitment to user experience – a rarity in the industry – ought to help maintain its credibility in the eyes of the public.
“We philosophically believe that we are an access provider that’s better than everybody else. [Traditional] telcos create a walled garden. In that walled garden they have their voice service, they have their TV service, and they have their applications. If you try to go elsewhere – say, if you try to use WhatsApp or Skype – they might go as far as to degrade those experiences. The reason we started a company is that we believe in a new way of life coming. So we work closely with the content guys.”
This is part of the coverage of Startup Asia Singapore 2014, our event running on May 7 and 8. Follow along on Twitter with the #startupasia hashtag.