| Singapore Telecom's experience with
the liberalization of our telecommunications sector
provides another illustration of the pressures of this
new operating environment. The past 3 months have seen
major changes in our telecommunications market as Singapore
Telecom faced domestic competition for the first time.
Mobile phone and paging charges have fallen sharply.
For international telephone services, even before we
introduce competition in Singapore, SingTel's IDD rates
have been coming down. Otherwise SingTel would have
lost business to incoming calls charged at lower rates
than outgoing calls. Come Year 2000, when other fixed-line
operators come on stream, Singapore Telecom will face
even fiercer competition.
These are, however, just signs of
the turbulence sweeping the telecommunication markets
worldwide, fueled by new technologies and the breakdown
of old regulatory barriers. These trends are irreversible,
and will affect every country. Even if governments do
not proactively liberalize their telecommunications
market, technological developments will de facto bring
about the changes regardless of regulatory restrictions.
In Hong Kong, for example, Hong Kong
Telecom has a monopoly in international calls until
2006. However, through innovative sales tactics including
packages offering both resale of Hong Kong Telecom's
IDD service as well as call-back, other fixed-line operators
in Hong Kong have managed to garner 30 per cent of Hong
Kong's international-calls market. There are reports
that Hong Kong Telecom has started talks with the Hong
Kong government about terminating its monopoly early
in return for compensation, because the new operating
environment is reducing the value of this monopoly.
This is what we did in Singapore with SingTel.
Singapore will not be spared this
turbulence in the telecommunications market. Even if
we succeed in protecting our market and insulating it
from the new forms of competition, this would only be
at a high and unacceptable price to the rest of the
economy. We will raise business costs, stunt the growth
of the telecommunications industry, and undermine our
position as a regional telecommunications hub. Singapore
Telecom thus has to transform itself quickly and adapt
to the ways of the market. It has to move into new technologies,
services and markets to tap new revenue streams. |
