Mr Leong Keng Thai, Director-General
Telecommunication Authority of Singapore (TAS)
Speech - Wireless Showcase Asia 98 Conference (S'pore) - 'The Future of Wireless Communications'
Singapore, 21 January 1998
Good Morning Distinguished Guests, Ladies and Gentlemen,
1. I am honoured to be invited to deliver a key-note at the Wireless Showcase 1998.
2. The Asian telecommunications markets remain healthy in the coming year. Despite the recent regional economic turmoil, many remain optimistic about the development of wireless communications in Asia and view the future of the Asian mobile market as very promising. According to Telecom Asia magazine, Asian growth rates from 1993 to 1998 will average 55% each year for wireless communications as compared to US figures of 13% and European predictions of 19%. It also predicted that by the end of the century, approximately 80 million Asians will subscribe to wireless services. The Asia-Pacific region is expected to have a proliferation of new generation wireless communications networks designed to permit any type of transmission, including voice, paging, fax or data.
Future of Wireless: Convergence
3. One of the major developments facing the telecommunication industry is convergence. Many view convergence as the merging of various industries namely; telecommunications, computing, broadcasting, entertainment and information rather than the synthesis of diverse consumer needs. The onslaught of new advanced technologies coupled with the deluge of multiple-million dollar strategic deals forged within and among these industries are far more visible than the quiet but radical changes in the way we communicate, work and live. Exciting technologies and highly publicised corporate maneuvers often overshadowed the "humble" consumer. However, it is the consumer that serves as the focal point in tomorrow's converging market-place. Consumers are the natural hiatus in the marketplace equation as companies leverage technology to better serve them.
4. Many deem convergence as an entirely new phenomenon. However, convergence has actually been with us longer than we realise. In the past, the onus was on the end-users to collate, process, convert and merge information or data accordingly to their requirements. The end-users have always been the agents of convergence. These processes were often tedious, time-consuming and technically demanding. Convergence was privy to only the sophisticated and technically savvy users. Advanced technology allows for much of these processes to be mechanised or automated. Technologies in the form of intelligent terminal equipment, sophisticated software and high-capacity networks relieve the consumer of these laborious processes. For example, digitalisation has rendered the distinction among the different traffic types like voice, data and video increasingly irrelevant. Technology makes convergence far more transparent and accessible. This is where past and future diverge.
5. While convergence is not a new phenomenon, it is definitely entering a new age. Convergence has shed its exclusive niche-market in exchange for a broader mass-market approach. Mass-market denotes the attainment of critical mass rather than mass production. In fact, technology enables what I call "mass-customisation". Interestingly, convergence can only achieve mass-market status if it is customised to serve the unique needs of each individual user. Users no longer want to be bombarded with huge amounts of information, leaving them data-rich but knowledge-poor. Consumers are becoming progressively selected and increasingly discerning.
6. To elaborate, each consumer turns to convergence in search of a different solution for its individualised need. In essence, convergence means different things to different people. Some consider convergence as means to access broadband multimedia services on the move. Some see convergence as facilitating "multi-tasking". Some view convergence as the possible amalgamation of content and conduit provisioning, thus, demanding an integrated customer interface and/or composite service packages. Others may look upon convergence to simplify daily processes with value-added applications such as financial and banking services at the press of a button. In the same light, the continued growth of wireless communications in the region hinges upon the ability to hone in on and cater to the needs of consumers. Wireless service providers must discover new growth areas, innovate and offer new exciting mobile services that meet the needs of a dynamic market place.
7. It is heartening to see from the list of topics to be discussed at this Seminar over the next 2 days that industry is already actively thinking about the convergent marketplace and possible future services consumers may need, ranging from wireless Internet, wireless local loop to satellite communications.
Common Vision of the Future
8. Both government and industry must share a common vision of the future centred on meeting the needs of the consumer. This lays a solid and important foundation upon which governments can develop relevant and meaningful regulatory policies and industry can provide useful and timely communication services. To maximise consumer benefits, there must be continued liberalisation initiatives and innovation efforts. Using liberalisation as a key measure to foster competition in the marketplace will provide the necessary incentive and push to industry to pursue innovation in order to stay competitive and meet the challenges of the marketplace.
9. The introduction of competition in mobile services has resulted in increased growth in mobile communications and benefits to consumers. Since the liberalisation of our mobile phone and paging markets on 1 April 97, the subscriber base has grown significantly. The mobile phone and paging services markets have grown by about 59% and 19% respectively, with the mobile phone and paging subscriber base standing at 743,000 and 1.3 million as of end 1997. The mobile phone penetration rate as of end 1997 stands at 23.9 per 100 population compared to 14.2 per 100 population in March 1997 just prior to competition. Similarly, the paging subscriber penetration rate now stands at 42.3 per 100 population as end 1997, compared to 35.2 per 100 population in March 1997.
10. We are now in the process of further liberalising the mobile phone market from 1 April 2000 by licensing up to two more operators through a public tender. Tender results will be announced by mid-1998.
11. As all of us have experienced, the pace of technological advancements and the dynamics of the market place are ever increasing and changing. Firstly, technological change has become a lot more complex. Advances in wireless technologies has greatly increased the number of alternative technologies and competing technical standards. For example, cellular operators are now confronted with diametrically divergent transmission solutions like TDMA and CDMA and even variations within each !
12. Secondly, technological change is occurring at a much faster pace. Rapid technological advances heighten the pace of obsolescence and greatly reduce the window of opportunity to reap returns. To illustrate, the average product shelf-life of mobile phone handset has rapidly plummeted over a short period of time.
13. Thirdly, the increased complexity and rates of technological change lead to greater uncertainties. For instance, there is little consensus on a common standard for Universal Mobile Telephone Services or the 3rd generation cellular standard as operators and equipment manufacturers remain divided. The increased complexity, pace and uncertainty surrounding technological developments reinforce the difficulty of trying to control technology.
14. From the regulatory perspective, policy formulation should take into account the distinct features particular to mobile communications. The three issues unique to wireless communications which guides policy formulation are mobility, service reliability and quality.
Unique Policy Issues
15. Unlike other telecommunication services, wireless communications offers users mobility. This special functionality of mobility that provide users with unrivaled convenience should be leveraged upon. As consumers demand greater integration among their various communication devices and modes of communications, mobile communications is a very good partner and strong complement to fixed-line services.
16. In recognition of the growing convergence across various telecommunication services, TAS has undertaken to align the annual licence fees for all TAS' public licensees. As part of our broader on-going review of the overall telecommunication industry, we have announced that the annual licence fees will be lowered, from a range of 3-12% of an operator's gross turnover, to a flat rate of 1% of Annual Gross Turn-Over (AGTO) for both mobile phone and paging services operators from 1 April 2000. This new annual recurrent licence fees will also apply to all mobile phone and paging services licensees, including existing operators, from 1 April 2000 till the expiry of their licences. This fee revision is expected to result in S$300 million savings to mobile phone and paging services operators, which in turn will translate to lower prices of mobile and paging services for consumers.
17. The licence fees reduction is to ensure that the mobile phone and paging service operators will continue to invest in improving their networks and services to bring in more competitive prices and enhanced quality of service standards to consumers.
Service Reliability and Quality
18. Mobile communications is no longer considered as an ancillary service as it begins to attain mass market status. Changing work and lifestyle patterns have made people more reliant and dependent on mobile communications. This is especially so for the business user who is always on the move. As users become more sophisticated, they expect improved network reliability, service coverage and better call quality, comparable to their fixed-line telephone services. Users will be increasingly less tolerant of system failure, spectrum interference and network congestion.
19. In this respect, TAS has established a set of minimum service quality standards which all licensed mobile phone and paging operators must comply with. TAS constantly reviews and refines these standards to ensure that the quality of service provision remains high and consumers' needs are well-served.
20. Since the introduction of competition in the mobile phone and radio paging markets since April last year, all the mobile service providers have met TAS' quality of service (QoS) performance standards. From the latest QoS reports and radio-coverage surveys for three last quarters from April to December 1997, both the public mobile phone operators; SingTel Mobile and MobileOne have achieved the QoS target of maintaining a network availability of more than 99%. In terms of the radio paging network availability, all four paging operators have also met the QoS target of more than 99% network availability.
21. Operators are also monitored on their performance for in-building and street level service coverage. From April to December 1997, TAS surveyed the radio coverage in 139 public buildings, roads in all HDB (Housing Development Board) estates and 35 other major roads such as the expressways. Both the mobile phone and all the four paging operators passed the in-building and street level coverage which have been set at over 95% for street-level coverage and over 85% for in-building coverage.
22. TAS is pleased with how competition has developed in the Singapore market since competition in the mobile phone and paging services commenced from April last year. We expect that in an increasingly competitive and multi-operator environment, the industry's ability to innovate and serve customer needs will ensure its continued growth and relevance to consumers. As industry players innovate and take advantage of technology advancement to further improve the quality and range of their service provision, we believe that the growth and attractiveness of the mobile market will remain strong in the years to come.
23. I would like to take this opportunity to wish the Seminar organisers and all industry players present every success in the coming year. I am sure that the Seminar will serve to stimulate meaningful and insightful discussion on the future of wireless communications.