5 February 2007 - Statement By Dr Lee Boon Yang, Minister for Information, Communications and the Arts At a Press Conference, MICA Building, Esplanade Room.
Statement By Dr Lee Boon Yang, Minister for Information, Communications and the Arts, At Press Conference on 5 February 2007 , at MICA Building, Esplanade Room.
Good evening, Members of the media.
1. Thank you for attending this press conference. I know that it is not the best time in the day to hold a press conference but the announcement had to be done after the stock market closed as it concerns the further liberalisation of postal service in Singapore.
2. In 1992 SingPost was granted a Public Postal Licence with a 15-year exclusive right to collect and deliver ordinary letters and postcards within, into and out of Singapore. This exclusive right covers what is known as “Basic Mail Services”. Three years later in 1995, the provision of express letter services was liberalised and open for competition, along with the delivery of printed paper, such as marketing brochures, and parcels. In fact, today the delivery of parcels does not even require a licence from IDA.
3. I am pleased to announce that the Government has decided to liberalise the market for basic mail services wef from 1 April 2007, following the expiry of SingPost’s exclusive rights for basic mail service on 31 March 2007.
4. This means that the basic mail services market will be open to competition after 1 April 2007 and new players will be able to apply to provide conveyance services for letters, including postcards, within, into and out of Singapore.
5.I would like to assure the public that there will be no disruption to Basic Mail Services and consumers’ interests had been taken into account in the proposed changes.
6.The Singapore Department of Statistics's record shows that the postal services generated about S$1 billion in revenue from about 596 establishments1 in 2004. Total mail volume has been growing since the 1990s and in recent years, the average growth rate is about 2% per year. We expect this growth trend to continue into the near future.
7. The decision to further liberalise the postal services sector in Singapore was arrived at after careful assessment and taking into consideration the feedback received during a public consultation conducted by IDA between 18 August and 29 September 2006. The industry has expressed their support for this move as they believe that liberalisation will be a catalyst for the postal sector’s growth.
8. Greater competition in the basic mail services market will benefit users through more service innovation and price competition. Business users, who account for more than 90% of total domestic mail sent, will benefit from the competitive environment for bulk mail, better service quality, and greater choices of service provider. International mail service users are also likely to benefit from greater competition.
9. Overall, competition will also promote further innovations in Singapore’s postal industry and will incentivise the incumbent to further improve its service quality and efficiencies. Liberalisation of the Basic Mail Services market will also see spill-over benefits into the growing printed paper segment, and other segments of the economy such as enhancing Singapore’s position as a regional printing hub. The liberalisation of the basic mail services market is expected to result in estimated cost savings of $8 million to $25 million per year for the next 2 to 3 years.
10. The Government is mindful of concerns on mail integrity and security and the need to preserve high user confidence in the public postal system. As the postal authority, IDA will be putting in place appropriate regulatory frameworks to ensure that consumers continue to enjoy high service quality for basic mail service as well as maintain the public confidence in the reliability and availability of basic mail services.
11. IDA will be releasing more details on the liberalisation and regulatory frameworks. MICA and IDA will also be launching a public consultation on the proposed changes to the Postal Services Act and the Regulations shortly. We encourage views from individuals and businesses on the proposed changes.
Note:
1. Data from the Singapore Department of Statistics for 2004 under "post and courier services".
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