SINGAPORE - Telco M1 has launched the cheapest mobile plan targeted at consumers who do not need to buy a new handset, upping the ante on competition.

Its most basic new subscription plan is priced at $30 a month for a 5GB data bundle, 300 minutes of talk-time and 1,000 SMS and MMS. Consumers need to sign a one-year contract.

Similar 5GB data mobile plans for customers who need a new subsidised handset cost at least $80 a month across all three telcos - Singtel, StarHub and M1.

Plus, Singtel and StarHub phone line-only plans are not significantly cheaper than their plans that come with a subsidised smartphone.

For instance, Singtel charges customers who need just a phone line the same monthly subscription as customers who buy a phone line and a subsidised smartphone. Its phone line-only customers get 50 per cent more outgoing talktime, and a shorter contract period of three months.

Meanwhile, StarHub offers phone line-only customers a 20 per cent discount on their monthly subscription. (See correction note below)

But with the arrival of low-cost smartphones like the $169 Xiaomi Redmi in February last year and the $249 Asus ZenFone 5 four months later, users need not sign expensive two-year mobile service contracts in exchange for massive subsidies for their smartphones.

Consumers routinely tie themselves to such long-term deals because smartphones cost at least $600 a piece without contracts.

"Customers who prefer to buy their own smartphones have told us they would like to see better value in their postpaid plans," said Mr P. Subramaniam, chief marketing officer at M1.

"As we do not subsidise these customers' smartphones, we pass these savings back to them through larger data, call and message bundles," he added.

Correction: An earlier version of the article said "StarHub gives line-only customers a 20 per cent discount on their monthly subscription. Subscribers must sign a one-year contract." Starhub has clarified that it does not require customers to sign a one-year contract and has updated its website with the correct information.