Ground Breaking Ceremony of Mobile One's Corporate HQ

Mr Mah Bow Tan, Minister for Communications Speech - Ground Breaking Ceremony of Mobile One's Corporate HQ

Mr Mah Bow Tan, Minister for Communications
Speech - Ground Breaking Ceremony of Mobile One's Corporate HQ
Singapore, 31 July 1996

When MobileOne (Asia) Pte Ltd (MobileOne) was awarded the licence to provide public cellular mobile telephone service by the Telecommunication Authority of Singapore (TAS) more than a year ago, it marked a new milestone for Singapore's telecommunications industry. For the first time in our telecommunications history, we will have another company other than Singapore Telecom (SingTel) providing telephony services.

Together with the licensing of the three new public radio paging operators, this is our first major step towards introducing competition in the provision of telecommunications services in Singapore. The next significant step will take place in 2000 when SingTel's exclusive rights in basic telecommunications services expire.

The telecommunications industry in Singapore is well developed. We have a high penetration of wired telephones. At 48%, it is comparable with many developed countries. We already have the highest penetration of pagers in the world at 32%. About 1 in 10 Singaporeans now owns a mobile phone, and subscription is growing at a rate of about 25% a year.

The growing affluence of Singaporeans, the falling prices of mobile phone terminals and attractive packages offered by the incumbent operator have all helped to spur this demand. I expect the usage to increase even further with MobileOne coming into operation.

On its part, Singapore Telecom has to its credit been able to serve its customers well, in terms of meeting the demand for telecommunication services while at the same time maintaining a high standard in both the network and service quality. However, as technology advances so rapidly, as the global telecommunications industry restructures so dramatically, and as demand for better, more innovative and competitive services grows, our industry must be able to respond effectively.

Reliable, efficient, innovative and competitive telecommunication services has been our key competitive edge as the region's business hub. We must ensure that it remains so, even as we face increasing competition in this field. This has been the primary motivation behind our decision to open up the telecommunications market to more competition, so as to ensure that Singapore's telecommunications industry continues to offer a greater variety of services as globally competitive prices.

With the licensing of MobileOne, Singaporeans will soon be able to choose from two mobile phone operators. MobileOne will be providing both mobile telephone and radio paging services. I am pleased to note that MobileOne's network implementation plan is on schedule and that it will be able to offer service from 1 April 1997, when Singapore Telecom's exclusive right to mobile phone and radio paging services expires. This is made possible no doubt by the hard work of all the staff in MobileOne, making full use of the almost two years lead time that TAS has set aside for the new operators to prepare for the service.

To a new public network operator, entering a telecommunications market long dominated by a single operator is no easy task. Before actual competition can even take place, many issues have to be resolved, many hurdles have to be crossed. One major hurdle for new entrants is to come to an agreement with the incumbent operator on interconnecting their networks.

Interconnection is necessary to enable the subscribers of one network to call those of the other network. To reach an agreement, many technical and administrative issues have to be resolved, apart from the issues of costs and charges. We have seen enough examples in other situations of how a new operator's bid for interconnection rights can lead to long-drawn negotiations and sometimes litigious process that often results in delaying, if not crippling, the introduction of new services, thereby depriving consumers the benefits of full competition.

TAS is aware of such problems and has taken pre-emptive measures to help facilitate negotiations between the operators on interconnection. For example, TAS requires all public network licensees to provide access to other TAS licensed operators. The guidelines and principles for network interconnection and access were spelt out in the tender documents for the mobile phone and radio paging licences. TAS also determined the interconnection access charges for the first three years of competition. This issue is often a major stumbling block to interconnection negotiations.

Over the past one year since the award of the licence, TAS has worked closely with the operators to help facilitate the interconnection negotiations, even sitting in on meetings to help iron out differences and provide assurance of TAS' attention. I am pleased to note that the positive attitude adopted by all the parties involved has helped to enable bilateral interconnection agreements to be reached in just under six months, by January 1996. With this major issue out of the way, the operators can now focus on rolling out their services by 1 April 1997. Singaporeans will not have to wait an extra day longer to enjoy the full benefits of competition.

Another hurdle for new entrants is the sharing of infrastructure and facilities. Based on the principles laid down by TAS, the operators have sought to share infrastructure and other facilities, such as equipment rooms, and antenna mounting structures including those in the MRT and CTE tunnels, so as to reduce duplication of resources and minimise delay in rolling out the network.

As we progress into a competitive environment, there will no doubt be disagreements between operators from time to time. TAS' role must be that of an impartial referee. It must ensure that there is a level playing field for all operators. It must set ground rules for the industry to pre-empt anti-competitive behaviour. Finally, as a last resort, it has to resolve disputes on matters relating to the requirements of the licences.

As in any competition, rivalry between operators will be intense, but there is no reason why it cannot also stay within healthy limits. The ultimate beneficiaries will be the people of Singapore.

The experience of dealing with a new competitive environment in mobile telecommunications will also stand TAS in good stead as it prepares for the introduction of competition in the basic telecoms services. The complexity of the issues is expected to multiply. TAS has set up several study teams to look carefully at how others have dealt with such issues. Learning from others' experience will help in our own preparations. I am pleased to note that these preparations are progressing well for the prequalification exercise to start by the first quarter of next year as scheduled.

MobileOne has won the second public cellular mobile telephone service licence and one of three public radio paging service licences by standing out from amongst an impressive list of tenderers. It has pledged itself to be a worthy competitor to Singapore Telecom, to provide competitive services to consumers, improve standards and enhance the overall market in a way that will allow Singaporeans to enjoy the full benefits of competition. It has already committed to introducing two cellular mobile networks: the digital cellular technology GSM now widely adopted all over the world, and the PCS using CDMA, a leading edge technology developed in the US. Its paging network will be based on FLEX, another advanced paging technology.

The ground-breaking of MobileOne's Corporate Headquarters here this morning is testimony to MobileOne's long term involvement in and commitment to Singapore's telecommunications scene.

I am therefore pleased to be invited to officiate at this ceremony and take this opportunity to congratulate MobileOne for its excellent progress in its network implementation and wish it every success in the challenging tasks ahead.

Thank you.