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TAS Further Liberalises the Internet Access Service Provision in Singapore

The Telecommunication Authority of Singapore (TAS) has further liberalised the provision of public Internet access services in Singapore. With immediate effect, any interested party can apply to TAS for a public Internet Access ...

Singapore, 8 October 1998 | For Immediate Release

The Telecommunication Authority of Singapore (TAS) has further liberalised the provision of public Internet access services in Singapore. With immediate effect, any interested party can apply to TAS for a public Internet Access Service Provider (IASP) licence to provide public Internet access services in Singapore. This new policy was announced by the Minister for Communications, Mr Mah Bow Tan today, when he officiated the opening of Nokia's regional office at the Alexandra Technopark.

Under this open market approach, any interested party who meet TAS' minimum set of criteria will be able to obtain an IASP licence. The duration of the licence will be 5 years, renewable for 3-year terms thereafter. The licence fee will comprise an initial one-time fee of $450,000 and an annual recurrent fee of 1% of the audited annual gross turnover (AGTO) subject to a minumum of $10,000. This is similar to the licence fees applicable to the current 3 IASPs.

As required of TAS' existing 3 IASPs, any new IASP licensee will have to meet TAS' minimum quality of service standards. Each IASP will also have to commit to enhancing Singapore's regional/global Internet connectivity so as to reinforce Singapore's Internet hubbing position. TAS will require each IASP licensee to execute a $1 million performance bond to ensure that this commitment will be met. As with the other public telecommunication licences, TAS will continue to maintain the maximum direct foreign equity limit at 49%.

This free market entry approach for licensing the additional IASPs differs from the public tender licensing approach used in the licensing of the third IASP three years ago and the new basic telecommunication and mobile phone operators. TAS will take a free market entry approach to license more players for particular market segments when the timing is right, depending on the stage of development. For the Internet access market, TAS has assessed that there is room for growth and development after 3 years of competition. TAS has considered other market developments before deciding that it is timely to open up the IASP market.

The presence of additional IASPs would help grow the Internet market, provide further stimulus to the industry and help drive Singapore's transition to a knowledge-based Information society. The Internet plays an important role in the development of the Global Information Infrastructure. Therefore, the ability of our people to access and to leverage on the Internet, will be a key factor in facilitating Singapore's transition to the knowledge-based society of the future. TAS sees that having more IASPs should inject new stimulus, skills and expertise into the industry. Licensing additional IASPs provides an excellent opportunity for foreign players to bring in their services and expertise to users in Singapore.

With the convergence of telecommunication and information technology, there is potential for TAS' public telecommunication licensees to further enhance their traditional telecommunication services to offer integrated multimedia and telecommunication services. In doing so, they can enjoy greater synergies and economies of scale and scope.

TAS will continue to review the market developments and further liberalise the telecommunication industry, where necessary to maintain Singapore's competitiveness.

Background Information to the Editors:

Singapore currently has three Internet access service providers. Prior to September 1995, Singapore Telecom's SingNet was the sole commercial IASP. Following TAS' decision to introduce competition in the IASP market, Technet, which catered mainly to the academic and R&D institutions, was privatised, renamed as Pacific Internet, and licensed as the second IASP. A third IASP, Cyberway, was selected by way of a public tender. All 3 IASPs were awarded 5-year licences on 5 September 1995.

As at August 1998, we have about 352,000 dial-up subscribers, giving a penetration rate of 11.36 per 100 population. If we include the number of users served by leased circuits, the penetration rate is about 17 per 100 population. Internet subscription tariffs have fallen substantially with the advent of competition by more than 50%. Our IASPs have consistently passed the Quality of Service standards set by TAS. They have also been actively developing content to encourage Internet usage. The range and quality of value-added services offered have vastly increased over the past 3 years. Services such as high speed Internet connection, system integration, web hosting, e-mail paging, web design and web advertising have rapidly been introduced.

Despite all these, Singapore is still behind the Internet market developments in countries like Finland, the US, Australia and Japan. There is still potential for growth. TAS sees a significant unfulfilled potential in the market. Firstly, there is a gap between the residential household PC penetration and the Internet dial-up subscription. Also, we are expecting a strong take up rate for Singapore ONE over the next few years due to active promotion by the Government and service providers. The continued importance of the Internet as a source of information and as a medium for all types of IT applications and electronic commerce transactions mean that there will clearly be further growth potential for the Internet market.

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