Singapore's media giants end tentative bid at competition

Asian Economic News, Sept 20, 2004

SINGAPORE, Sept. 17 Kyodo

Singapore's two media giants announced Friday they will merge part of their operations in a bid to stem financial losses, effectively ending a fleeting experiment with limited competition in the city-state's tightly controlled newspaper and broadcasting industry.

Singapore's dominant broadcaster MediaCorp Pte. and newspaper publisher Singapore Press Holdings, which have been allowed to compete in each other's core businesses since 2000, said in a joint statement that they will merge their activities.

MediaCorp is wholly owned by Temasek Holdings, the government's investment company, while Singapore Press Holdings, which publishes 14 newspapers, including the Straits Times, is a government-linked company listed on the Mainboard of Singapore's stock market.

Four years ago, the government allowed Singapore Press Holdings to venture beyond the newspaper publishing business into television broadcasting and for MediaCorp to publish a free tabloid daily in a small attempt at liberalizing the industry.

However, the two companies' forays into each other's media businesses floundered, with both sides saddled with losses in their new ventures.

The decision to merge ''comes at a time when both MediaCorp and SPH have incurred continuing losses in their respective mass-market TV and free newspaper businesses,'' according to a joint statement from the two firms.

The two companies will group the operation of some of their television channels under a new company, which will be 80 percent owned by MediaCorp and 20 percent by Singapore Press Holdings. In addition, Singapore Press Holdings will buy a 40 percent share in MediaCorp Press Ltd, publisher of a free tabloid newspaper.

The government continues to maintain a tight grip on the media in Singapore. MediaCorp is the sole broadcasting company providing free-to-air channels and Singapore Press Holdings is the only publisher of Singapore's major dailies.

The government has clearly stated that it does not regard the Singapore media as the fourth estate. Satellite dishes are also largely banned, though cable television has been allowed.

The country has strict rules on how both local and foreign journalists report local news, especially political news. Foreign publications and broadcast services are not allowed to engage in domestic politics with reports that are targeted to influence Singaporeans, and face the threat of a ban or cut in their circulation in the country, along with expensive lawsuits and hefty fines.

The government said late last year that it was considering ending rivalry in the media industry, on grounds that Singapore, with a population of about 4 million, is too small to support more than one significant player.

Singapore's elder statesman Lee Kuan Yew said last year that the two companies were ''losing money and both are hemorrhaging and they are trying very hard to stop the hemorrhage. But I don't think it's possible.''

Both sides have obtained in-principle approval from the regulatory authorities for their planned merger.