Singapore's open market appeal

Telecommunications International, August, 2001 by Matthew Secker

StarHub's Poston considers that there is no doubt that SingTel has sharpened its act up and become more competitive. "But if you go through the record of comments during the public consultation, you'll see a continuing record of trying to obstruct competition. This continues on a day-to-day basis because we fight the battle with interconnectivity all the time. You should not, however, expect anything different from an ex-monopoly company other than obstructive tactics. Fortunately, we are the first of the new, not the second of the old. Liberalisation has led to enough players out there who now have the same mutual interest as us and are also happy to use us as their local network or hosting provider. This gives both parties an aligned commercial interest."

SingTel, though, is still a force to be reckoned with. It recently opened a new service that will be available via the internet -- offering six new channels plus video-on-demand. It has also entered into an S$1.2 bn ([epsilon]0.76 bn) joint venture with Indian telecom company Bharti Telesonic to build an 11,800km cable linking Singapore, Chennai and Mumbai.

Since April 2000, there have been five new facilities-based operators in Singapore. They are WorldCom, FLAG Telecom, Davnet, SP Telecommunications and Telstra-DataOne. So over the last year, who has posed the most significant threat to SingTel and StarHub? "Up to now, there has been very little threat because their networks are not fully operational," says StarHub's Poston. But he does consider that the company that appears to have the biggest network build out so far is WorldCom. "But even they remain a customer to both ourselves and SingTel. This is because it's the carriers stated aim to be completely end-to-end. This goal, however, is largely impractical because MNCs don't group themselves together. Even in Singapore they are actually scattered throughout the whole city. So while WorldCom will fight very hard for certain aspects of the MNC sector, they will still bring in some amount of business to their competitors by using their networks to provide their customers with coverage."

Pacific Internet's Hai points out that new market entrants will not pose a threat in the residential market because they are focusing primarily on the corporate market and the central business district. So SingTel and SCV are the players that will continue to dominate residential -- with StarHub's merger with SCV giving the operator a crucial interest in this lucrative sector.

Singapore -- the telecoms hub?

Following Singapore's opening up of the marketplace and its strategic geographical location, the industry and the government are keen to claim that Singapore is the major telecoms hub for the region. In the past, Singapore has excelled in being a great transport location. Within the next year and a half, six or seven new submarine cables are planned to land in Singapore. These will be meshed across from the different landing stations to create a major fibre connection. So Singapore is certainly going to enhance its capability and attractiveness.