Singtel’s Latest Partnership with Perplexity AI Is Yet Another Step in Its Techco Transformation Journey; However, Is This AI Strategy Viable for Other Southeast Asian Telcos?

In January 2025, Singaporean Communication Service Provider (CSP) Singtel unveiled its new offering that grants subscribers free access to Perplexity AI Search. Customers of its broadband, TV, and mobile networks can activate a free 1-year subscription to Perplexity Pro, valued at approximately US$197. Singtel is not the first CSP to provide such services, as Japanese CSP SoftBank had earlier also announced plans to offer a subscription-based Generative Artificial Intelligence (Gen AI) service developed by Perplexity, while South Korea’s SK Telekom intends to provide year-long access to the premium version of the Artificial Intelligence (AI) search engine.

Perplexity’s Pro package enables users to access a variety of popular AI models, including OpenAI, Anthropic, and Grok, as well as its proprietary Large Language Models (LLMs) built on Meta’s Llama 3.1, thereby presenting a wide range of AI implementation options for its subscribers. Perplexity’s partnerships with leading CSPs in new markets represent a key growth strategy for expansion.

Natural Language Processing (NLP) models, such as Perplexity, are expected to explore strategic partnerships with telecommunications providers and CSPs as a key growth strategy in the coming years. This partnership is a sensible one, as it benefits both parties. The partnership between CelcomDigi and Amazon Web Services (AWS) to develop Bahasa Melayu language-supported chatbots using Amazon Titan and Anthropic Claude is an example that exemplifies this trend.

• Benefits for CSPs:
  • Singtel reported that, in 2H 2024, the company experienced over a 20% increase in network traffic to AI assistant domains like OpenAI’s ChatGPT, Google Gemini, and Perplexity AI.
  • Partnerships that offer a free year’s trial of premium access can be the catalyst for driving mainstream AI adoption among consumers and enterprises with no prior experience integrating the technology into their workflows.
  • CSPs supporting advanced AI solutions can create a competitive edge by facilitating digital transformation and increasing their value as digital solutions enablers.
  • Additionally, the increasing usage of AI will drive data consumption and connectivity opportunities, allowing CSPs to increase their connectivity revenue margins.
• Benefits for AI Solution Providers:
  • Traffic directed and driven directly into their domains could significantly increase the number of users on their platforms, expanding market reach and increasing market share.
  • Access to valuable conversational data in new markets can help AI solution providers refine their data models, providing greater response accuracy and value to regional users.

With Southeast Asian CSPs expected to continue exploring more partnerships to expand their offerings for advanced AI features, while also exploring the potential for increasing AI integration into their enterprise and consumer services offerings, ABI Research forecasts that telcos in the region will spend more than US$240 million on Business-to-Business (B2B) NLP models by 2028, at a Compound Annual Growth Rate (CAGR) of 31% between 2024 and 2028.

For most CSPs worldwide, the growing pressure to transform their telcos from traditionally offering connectivity options into Techcos that adopt technology-focused and innovative business models is mounting. Considering that there is a stagnation of Average Revenue per User (ARPU) across the general telco industry, the allure of generating new revenue streams by integrating new technologies like AI, cloud computing, and data analytics as part of its connectivity offerings is a tempting option.

Regional CSP leaders such as Singapore’s Singtel, Malaysia’s Maxis, and Indonesia’s Indosat have each launched AI-focused enterprise services, such as Graphics Processing Unit-as-a-Service (GPUaaS) models for AI adoption in enterprises, respectively. For regional or local leaders like Singtel and Indosat, offering connectivity services that integrate with cloud- and GPU-enabled solutions is expected to continue to be the key growth strategy for building digital revenue sources and transitioning into a Techco through digital transformation.

However, given the presence of hyperscalers such as Microsoft and AWS in the region, CSPs should exercise caution when attempting to launch services like GPUaaS that directly compete with these tech giants. For example, CSPs that lack expertise in running cloud services should avoid being sucked into an AI data center race in both local and regional markets. Instead, realizing growth strategies in other key areas of the AI ecosystem should be the key priority.

Rather than competing directly, playing a complementary role alongside hyperscalers in the market or entering the market through partnerships with third-party GPUaaS providers, such as Radian Arc’s GPU partnership with COMIT telecommunications network in Vietnam, could also be a viable strategy to build value across the AI ecosystem in the Southeast Asian market. With connectivity being the main unique value proposition for CSPs, they could explore leveraging their current infrastructure, including edge networks, to provide co-location services for hyperscalers looking to expand their reach and capacity across the country. CSPs can also leverage their fixed and mobile networks in their country to deliver AI cloud-based applications to enterprise end users. Additionally, with regulatory challenges such as AI and data sovereignty gaining prominence, CSPs can help hyperscalers address such challenges by ensuring that data are processed and stored in the country.

The recent buzz around AI and Gen AI is seen as a strong opportunity that telcos can seek to capitalize on. CSPs can take a variety of strategic options, and it is important for CSPs to assess the best opportunity available to them based on their existing infrastructure.