Khoong Hock Yun, Assistant Chief Executive, Infocomm Development, IDA Singapore - Speech Mobile Internet Asia 2001, Hilton Hotel
Khoong Hock Yun, Assistant Chief Executive, Infocomm Development, IDA Singapore - Speech
Mobile Internet Asia 2001, Hilton Hotel
Singapore, 21 March 2001
1. I would like to thank Worldwide Business Research for inviting me to here at Mobile Internet Asia 2001. I have been asked today to speak on the developments of mobile commerce in Asia and in particular Singapore, and to provide an overview of our government's efforts to position Singapore as an important key hub for Wireless Activities, particularly m-Commerce, in Asia.
Asia is ...
2. Many of you may already know that Asia is home to more than 2.8 billion people. This represents more than half the world's population in our backyard. Some of you may also have seen these projections on m-commerce growth in the region - that Asia will be a leader, that there will be 342 million mobile subscribers and $138 billion worth of m-commerce revenues by 2004.
Are we far from the projections?
3. While the population of 2.8 billion is very real, it still remains to be seen if the forecasts on m-commerce potential are realisable. The question remains - "Are we far from these projections?" Is the Nokia concept phone shown here, so far from "reality" for the man-on-the-street? If I ask for a show of hands now, most of you will probably be more skeptical than optimistic. Then again, maybe we are not so far off, at least from having high-resolution pictures on the phone. After all, this I-Mode phone is already readily available in the Japanese market.
What is the government doing to help?
4. "Are we far from the projections that I showed you in the first slide?" and "What is the government's role in spurring m-commerce growth, at least in Singapore?" I will share my perspective on the answers to these two questions.
A view of M-Commerce Growth
5. To address the first question, let us consider a reasonable model of m-commerce growth from 1998 to 2002 as shown by the simplified diagram of m-commerce growth taken from an m-commerce report published in 1999 by the European consultancy - Durlacher. Durlacher's diagram shows in a nutshell how m-commerce applications will evolve from being mere communication to commerce, from SMS to shopping and payment applications. It also forecasts that in year 2001, location-based services will be an essential service in m-commerce, and in 2002 onwards, games and video, or what we term as wireless multimedia, will form another essential service for m-commerce.
6. How does Asia and for that matter, Singapore, compare to this model, both in terms of applications and timeline? Are we far behind or are we making good progress?
M-commerce in Asia
7. A study of M-Commerce in Asia, will reveal a few important facts. One, there are a few key markets in Asia where m-commerce is taking off - these include markets like Hong Kong, Japan, Malaysia, Philippines, Singapore, South Korea and Thailand. Two, that there are 9.1 million m-commerce users already today, with an estimated US$1.55 billion worth of m-commerce revenues. These are estimates of current situation, unlike the forecasts for 2004 or 2005 which I shown you on the first slide.
In Japan
8. In Japan, where the success of I-Mode has made NTT DoCoMo the envy of all mobile operators world-wide, of the more than 20 million subscribers today, an estimated 7.1 million purchase music, ringtones and perform other m-commerce on the phones. Many have attributed I-Mode's success to three things: low internet usage, an always-on network, and easy billing. Given the Japanese youth's receptivity to new technology, I am certain that it is only within the next year that richer, video media services and a wider array of location-based services will become commonplace in Japan.
In South Korea
9. Next to Japan, South Korea is probably the next country with the highest number of people already on mobile phones. 22 million or 50% of the population to be exact. By all accounts, the government, mobile operators and manufacturer have worked in concert to raise the penetration rate. The manufacturers are also involved because the larger cellular operators in South Korea manufacture their own handsets. The South Korea Ministry of Communications and Information had also made commitments last December to boost the m-commerce market in South Korea by, among other things, giving subsidies to companies, and spending additional R&D on wireless research.
In Singapore
10. Let me now touch on Singapore. A country of about 4 million people, 63.1% or 2.5 million of which have mobile phones. This represents one of the highest mobile phone penetration rates in the world. Coupled with the small population and common GSM network, Singapore has been recognised as one of the most attractive trial sites in this region. This growth is likely to continue with government efforts in educating the public, promoting the industry, and also the range of mobile-commerce services that are in turn spurring more innovative applications in the market.
Availability of Services in Singapore
11. Allow me to elaborate a little further on the m-commerce services already in Singapore. I will start by looking back at the roadmap of m-commerce developments that I showed you earlier so as to compare it with where we are today.
12. No one will deny that we now have many of the earlier services highlighted in the roadmap - SMS, job dispatch, mobile banking and trading services. Many of these services emerged in the same time as was reflected in the Durlacher Report - online trading, and banking via Sim Toolkit for example was experimented as early as 1999 by some local banks. Just to give a flavour of some of the players who are currently offering these services, let me just quickly list out some familiar names in each space.
13. Past 2000, we saw the emergence of other services in the space of ticketing, reservation, payment and as recently as this month, the announcement of location-based services by mobile operators in Singapore. It is a good sign that LBS applications are in place, since this also means that the infrastructure for such location sensitive applications are ready, and that there is now room for even more innovative applications leveraging on the same underlying platform. Again, some of the players already offering services or who have announced their intent are shown in the slide. Many of these companies will be speaking later in this conference. I am aware of a few more planned but as yet unannounced trials in these areas, especially in location-based and payment services. I am therefore optimistic that these services will soon be familiar to the average mobile phone user.
In Singapore
14. What is my outlook for Singapore past today? Just like S.Korea and Japan, we feel that the developments in the underlying bearer network, GPRS in our case, will pave the way for richer graphics and content applications. We also believe that even though location-based services and mobile payment services have started to emerge this year, many of these services will undergo a technology cycle that will see it being mass-market in a few months or more. It is then that these services, and other innovative services will become more prevalent.
Availability of Services (Japan, Korea, Singapore)
15. To return to our first question on how far we are, we need only take a look at the services that was originally predicted in the Durlacher report. Indeed, countries like Japan, South Korea and Singapore already have such services in the given timeline. There is little doubt that Asia is indeed in the game.
What is the government doing to help?
16. It remains then to answer our second question - "What is the government doing to help make the forecasts a reality in Singapore?"
Developing Singapore's Wireless Industry
17. The Singapore government is committed to developing m-commerce in Singapore. Under the Wired with Wireless Programme, we intend to first proliferate technological innovations in this space, by building a comprehensive M-Commerce Ecosystem, and by showcasing projects. We have also engaged in policy changes and initiated forums so as to facilitate export and technology transfer in the broad Infocomm space. These policies will also be relevant to the sub-set wireless space. Finally, we intend to develop manpower in this area and reach out to the consumers to leverage on this medium. The manpower and consumer outreach programmes will leverage first on existing programmes that IDA has in the Infocomm space.
Build Singapore's M-Commerce Ecosystem
18. Let me elaborate. In the area of building a comprehensive M-Commerce Ecosystem, we have taken a holistic approach to promoting enablers in the space of wireless and map data infrastructure, right up to the users of m-commerce. At the bottom layer of this ecosystem, we have entities like the government Land System Support Unit, that sells digital maps, and mobile operators and equipment vendors who supply the essential infrastructure for m-commerce services. Next, we have the service providers, application builders, and software developers who build on the underlying mobile telecommunications network and map and traffic data services to enable companies to go onto m-commerce. Companies in this space include a good mix of both local and foreign players such as Finesse Alliance, EdgeMatrix, AU Systems, Aether and Oracle. The third-layer consists of "Intermediaries and Portals" such as Yahoo!, AsiaOne and the mobile operator portals - these players will be crucial since like their role in the Internet, they can value-add and aggregate on the Layer 2 services to make the services more customer-centric. Finally, we have the users of m-commerce at Layer 4 of the Ecosystem.
19. IDA intends to continue building on this Ecosystem so that there will not be a shortage of partners for new entrants in this space.
Show Projects
20. In addition, the Singapore government is working to help showcase innovative projects in this space. To this end, we have leveraged on consumer events such as the recent eFestival event, which drew 65, 000 visitors in the first 5 days, to set up a Wireless Pavilion for industry to showcase their products. We are also actively working with well-known multi-nationals such as HP, Ericsson, Cap Gemini to help allow Singapore companies to develop and showcase some of their products through these global companies.
Export and Technology Transfer
21. In the area of export and technology transfer, the government has lifted witholding tax requirements on software bundled with hardware. Increasingly, we are finding companies bundle servers with software for sale (such as the Nokia gateway software on HP servers) and we believe the cost-savings will not only promote technology transfer, but will also be passed on to other companies higher up in the M-Commerce ecosystem. IDA also recently announced the support of an industry-led Singapore PKI forum. This forum consists of members in the M-Commerce space, such as mobile operators, mobile security vendors and banks. The Forum intends to educate the public on PKI usage and also to harmonise PKI standards in Asia, starting with Japan and South Korea.
Developing Singapore's Wireless Industry
22. In conclusion, the Singapore government is committed to promoting m-commerce in this space. While it makes sense to continue leveraging on relevant, existing programmes to meet our objectives, we will also be announcing new programmes to meet the specific needs of this industry by Q2 this year. Indeed, we recognise that Asia is in the game for m-commerce, compared to Europe and the US. We also realise that Singapore can capitalise on its strengths of being an ideal test-site for innovative applications.
23. With that, I will end my presentation. I wish you all a fruitful conference ahead.
Thank you.
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