Official Opening of Nokia's New Regional Office at Alexandra Technopark

Mr Mah Bow Tan, Minister for Communications Speech - Official Opening of Nokia's New Regional Office at Alexandra Technopark

Mr Mah Bow Tan, Minister for Communications
Speech - Official Opening of Nokia's New Regional Office at Alexandra Technopark
Singapore, 8 October 1998

Distinguished Guests,
Ladies and Gentlemen,

1. It gives me great pleasure to be here today to witness the official opening of Nokia's new regional office for South East Asia and Pacific. That you have decided to expand your regional headquarters in Singapore in this period of regional financial turmoil and economic uncertainty is especially significant and welcome. It is a testimony of your continued confidence in the Asian region and your long-term commitment to Singapore as an important strategic partner in the telecommunication industry.

2. I believe such confidence in the region is justified and not merely blind optimism. Despite the on-going financial crisis, the economic potential for the Asian region in the long run remains promising. The sheer market size of the Asian region is too large to ignore. It is only a matter of time before the economic restructuring currently taking place returns the region to the path of growth and development. To take a long-term view now and to continue investing and maintaining a presence here is to ensure a place at the head of the queue when the region returns to growth. The reward for the brave and the far-sighted promises to be high.

3. This is especially true for the telecommunication industry. While the financial crisis has dampened somewhat the demand for telecommunication services, evident in the recent drop in IDD traffic volumes, growth is still expected for the telecommunication industry over the next few years, albeit at a slower pace. In 1997, the region's telecommunication sector accounted for 20% of the world's telecommunication revenue1, and is expected to expand significantly over the next decade.

4. The key growth drivers for telecommunication services in the next few years will likely be the cellular mobile and the information technology (IT) industries. In 1997, it was estimated that the cellular industry in Asia grew at an average of 60%2. The overall number of subscribers in the Asia-Pacific region is expected to increase to 110 million by year 2000, about one third of the global market. While this figure is likely to be adjusted downward in view of the economic slowdown, increasing liberalisation of the cellular mobile markets and the presence of huge markets such as China, Vietnam, Indonesia and India will ensure growth for the industry.

5. In Singapore, during the last one and a half years since competition was introduced to the cellular mobile market, the number of subscribers more than doubled, giving us a penetration density of 30% today. Prices of services have fallen and the range of service packages have increased. With a third cellular mobile operator licensed to begin commercial operations in year 2000, we can expect the penetration density to rise even further. Consumers can look forward to even more value being packaged into the service offerings as operators jostle for market share.

6. The other key growth area is the IT and Internet-related services sector. Our children will grow up in a world where the Internet will be as common as the TV or the telephone, or might I add, the mobile phone. The Internet will have a profound impact on the way we communicate, learn and do business. It has already moved from being a niche fad of the technology-savvy into the mainstream of communications. When the US Congress decided to release the Starr report, the Independent Counsel's investigation into the allegations of misconduct against President Clinton, it did so via the Internet. In the click of a mouse, millions across the US and all over the world had instant access to the 445-page Report, in all its colourful detail. It was, as one news magazine put it, a defining moment for global communications.

7. As we move into the next century, the Internet will play an increasingly important role in our lives, individually and as a society. It has the capacity for good. It can also do us harm. But, we cannot avoid the Information Society of the future, if it is not already upon us. We must prepare ourselves for the transition to a knowledge-based economy and society. We will invest in building our national telecommunication and information infrastructure. We will liberalise the markets where we can, to give more choice of service providers, better quality and range of services and more competitive prices. We must keep Singapore competitive so that we remain attractive as a place to do business, for our own people as well as for our international partners. We must not lose sight of this, even in these times of economic uncertainty.

8. As part of such initiatives, I would like to announce today that the Telecommunication Authority of Singapore (TAS) will further liberalise the provision of public Internet access services. From today, any interested party can apply to TAS for a public Internet Access Service Provider (IASP) licence to provide public Internet access services in Singapore. TAS will separately announce the licence application guidelines, which will include the key licence terms and conditions. All parties who meet the minimum license and service criteria set by TAS will be granted an IASP licence.

9. Let me elaborate on our decision to open up the IASP market. First, licensing additional IASPs will help grow the Internet market. There is presently a large gap between the residential household PC penetration and the Internet dial-up subscription rate. Having more IASPs will inject new stimulus and added expertise into the industry. We hope to see better access service provision, enhanced connectivity, domestically, regionally and globally, and more innovative value-added services and applications riding on the Internet platform. A whole multitude of information-intensive applications is being developed over the Internet. E-commerce is targeted as the way of doing business in the future. Companies are turning to virtual private networks for more cost-effective corporate communications and transactions. This is expected to fuel Internet growth. It should also speed up the take-up rate for Singapore ONE over the next few years, as more content and service providers come into the picture.

10. Secondly, with the convergence of telecommunications and information technology, we see an opportunity for our public telecommunication licensees to enhance their traditional telecommunication services offerings. An IASP licence will allow our current public telecommunication service licensees, who are interested to do so, to offer a seamless suite of integrated multimedia and telecommunication services, and in so doing, reap additional synergy and economies of scale from their operations.

11. We have taken another major step towards further liberalising our telecommunication industry. We will not stop here. We will continue to monitor the development in the other market segments and we will further liberalise when the timing is right. Our goal is to keep Singapore competitive by ensuring that the necessary telecommunication infrastructure and services are available and by preparing our people for the Information Age.

12. To help us achieve this, we will continue to welcome our foreign partners to set up operations here in Singapore and to establish strategic partnerships with our local companies. On this note, may I congratulate Nokia on its opening of this new regional office in Singapore, and wish you every success. Thank you.

¹ Analysys Report - Network Operators in the Asia-Pacific Region, Analysys Publications 1997.
² The 1998 Superhighways and Telecommunications in Asia Report, reported in Reuters Business Briefing, 25 Aug 98.