Agreement Signing Ceremony to Form the Singapore ONE Infrastructure Consortium "TAS To Award Up To Two Licences For Local and International Basic Telecom Services By Mid-98"

Mr Mah Bow Tan, Minister for Communications Speech - Agreement Signing Ceremony to Form the Singapore ONE Infrastructure Consortium "TAS To Award Up To Two Licences For Local and International Basic Telecom Services By Mid-98"

Mr Mah Bow Tan, Minister for Communications
Speech - Agreement Signing Ceremony to Form the Singapore ONE Infrastructure Consortium "TAS To Award Up To Two Licences For Local and International Basic Telecom Services By Mid-98"
Singapore, 23 September 1996

Speech delivered by Mr Mah Bow Tan, Minister for Communications, at the agreement signing ceremony to form the Singapore ONE Infrastructure Consortium on 23 September 96 at TAS Building

Introduction

Three months ago, I announced the launch of the Singapore One project to build a nationwide multi-media broadband network. This morning, I am pleased to witness the signing of an agreement to form the Singapore One Infrastructure Consortium.

Singapore's Competitiveness

Singapore One aims to bring about widespread multimedia services and applications in Singapore. It represents a concrete step in achieving our IT2000 vision. More than ever before, Singapore's competitive edge hinges on our ability to continually respond to technological changes, our strong commitment to infrastructure development and effective implementation of innovative info- communication services. Singapore One is a manifestation of our philosophy of planning ahead to cater to the telecommunication needs of our business community as well as resident users.

Singapore's business and residential telecommunication needs are currently well-served. Nearly 50 out of every 100 persons in Singapore have a telephone line. This compares very well with advanced economies such as Japan and the United Kingdom. Our telecommunication charges are also among the most competitive in the world. But in this fast changing world, especially when it comes to telecommunications, there simply is no room for complacency. New technologies present new opportunities which must be grasped boldly and effectively. The authorities and the industry must work together, think long-term and identify and undertake suitable projects which can further improve the way we live and work, and maintain Singapore's position as the preferred place to do business. Singapore One is one such project.

A competitive industry structure is also important. In May this year, I announced the Government's decision to advance the expiry of Singapore Telecom's monopoly rights for the provision of basic telecommunication services from 2007 to 2000. This means that we can introduce new providers for basic telecommunication services earlier than originally scheduled. While Singapore Telecom must be commended for doing a good job in fulfilling Singapore's telecommunication needs thus far, we must ensure that these needs will continue to be well served into the future. We know that users of telecommunication services will increasingly become more sophisticated and demand highly diversified services. By having a competitive telecommunication environment in Singapore, we can bring about services of higher quality, wider range and at more attractive prices .

Competition In 2000

In setting its liberalisation policy, the Government recognises that while there are attractions in an entirely free market, there is a risk that the long term benefits of liberalisation to Singapore may not be fully realised if competition is totally unbridled and is introduced too rapidly. It must be effective and sustainable. To achieve this , TAS will maintain its policy of a deliberate and phased approach to competition.

Based on this approach, TAS intends to award up to two more licences depending on the quality of tenders received and the attractiveness of the tenderers' business proposals. The licence will be for the rights to provide both local and international basic telecommunication services from 1 April 2000. These services include fixed voice telephony, IDD, leased circuit, public switched message and data services.

The tendering process will be conducted in two phases starting with the pre-qualification phase on 1 March 1997. Tenderers will be invited to submit proposals to TAS to demonstrate their technical and financial capabilities to enter and compete effectively in Singapore. The pre-qualification phase will allow TAS to shortlist only those suitable candidates to participate in the more onerous tender exercise. Those candidates who are clearly out of contention for the licence will not be invited to bid in the tender exercise so that they do not need to waste their time and effort.

Although this tender exercise will consider the issuance of up to two licences, the Government will review the need for more licences depending on future market demand and business conditions. In our review, we will also take into consideration the long term consumer benefits and the need to optimise the allocation of scarce resources so as to prevent unnecessary duplication of efforts and wastage.

We will continue to implement policies to develop telecommunication networks capable of providing high quality and competitively priced telecommunication services to support and drive Singapore's continued economic development into the next century.

In selecting suitable licensees, preference will be given to tenderers who are willing to invest and extensively establish their own telecommunication infrastructure networks in support of their strategic intent to fully develop the telecommunications market and opportunities. TAS will of course permit the sharing of certain facilities amongst operators where it would not make sense to have duplication. New entrants will also be required to provide all licensed services on a nationwide basis so that they cannot "cherry pick" only lucrative areas to operate in.

The ability to offer effective and innovative technology and services beyond the "plain old telephone services" will be an important criterion. By actively encouraging more innovative players in the telecommunication industry, we will be able to fulfill our mission of enhancing Singapore's position as a world class telecommunication hub.

I invite companies who are keen to participate in the coming tender to begin their preparations now. Business alliances can be forged to tap on each other's expertise and strengths and create the necessary synergy to be a strong contender. We also encourage foreign companies who have the necessary expertise and technical strength to look for joint venture local partners in Singapore. Foreign companies are allowed up to 49 per cent equity participation.

Details of licence conditions, criteria for pre-qualification and regulatory issues such as interconnection framework will be released nearer the time of the pre-qualification exercise in March 1997.

Time Schedule

Interested parties will be given three months from 1 March 1997 to put together a proposal to TAS for pre-qualification. Short-listed candidates will be invited to participate in the main tender in September 1997. In the main tender, tenderers will be given five months to prepare their tender submissions.

The results of the main tender are expected to be announced in mid-1998. The successful licensee or licensees will have around 18 months before the licence commencement date of 1 April 2000 to build, rollout and test their networks and services.

Conclusion

With a competitive telecommunication environment beyond the year 2000, supported by the development of multimedia applications through Singapore One, we can look forward to exciting times for the telecommunication industry and users in Singapore.

Given the importance of Singapore One in providing high bandwidth, high speed, and high quality telecommunication infrastructure for Singapore, the coming together of SingCom Investments, Singapore Telecom and Singapore Cable Vision to spearhead the infrastructural development is a timely one. I wish the consortium every success.

Thank you.