Dr John Chen, Minister of State for Communications Speech - Revolution of Information & Communication in Asia: 'The Policy of Communication in Asia'
Dr John Chen, Minister of State for Communications
Speech - Revolution of Information & Communication in Asia: 'The Policy of Communication in Asia'
Singapore, 17 September 1997
I am honoured to be invited to speak on "the policy of Communication in Asia" at this Symposium organised by The Straits Times and The Mainichi, two leading newspapers in their respective countries.
It is no wonder that being generators of information and creators of content with strong journalistic roots, the organisers would select such a highly apt and timely theme of "Revolution of Information and Communication in Asia" for this Symposium.
Indeed, we are living in a phase of revolution of information and communication. Driven by the latest technological advances, changing market demands and increasingly competitive and globalising business and market environments, the industries of computing, telecommunications and broadcasting are rapidly converging. The converging info-communication industry presents simultaneously both lucrative opportunities, as well as challenging tasks ahead. This will require countries that want to make the successful transformation to knowledge-based societies, to first make a paradigm shift in their info-communication industry.
Watershed Year Ahead
The radical wheels of change that drive today's info-communication industry have already been set in motion. The first glimpses of "the shape of things to come" will be evident in the year to follow. 1998 will be the watershed year as the info-communication industry crosses its Rubicon. The year 1998 will mark an important turning point for the info-communication industry.
Let me give you four examples. First, the mutlilateral Framework Agreement for Basic Telecommunications successfully concluded under the auspices of the World Trade Organisation among 69 countries in February this year will come into effect on 1 January 1998. This global pact will bring about substantive changes to today's US$600 billion telecommunication industry. The effective implementation of the WTO-GBT agreement will help to further break down the barriers to trading in telecommunication services across national boundaries of participating countries.
Secondly, member countries of the European Union (EU) agreed in December 1994 to open up their telecommunication market including network infrastructure within Europe from 1 January 1998. This means that most of the remaining restrictions on access to telecommunication markets within most of Europe will be removed from 1 January 1998. The full liberalisation of this market will quicken the pace of liberalisation in other parts of the world.
Thirdly, the satellite operators of Global Mobile Personal Communication Services (GMPCS) such as Iridium, ICO, Globalstar and Odyssey are set to either launch their initial satellites or offer a full or partial range of GMPCS services from 1998. The advent of GMPCS will reshape the current info-communication landscape. This new breed of "birds in the sky" will simultaneously compete with as well as complement the existing terrestrial wired-based networks.
Fourthly, many governments have recognised the need for national information infrastructures (NIIs) to meet the changing demand for telecommunication services. They have placed the development of their NIIs high on their national agenda. A certain amount of co-ordination, be it government or industry-initiated, is therefore required to ensure open and transparent inter-connection standards so that NIIs can communicate with each other and not breakdown at national boundaries. For example, at the 3rd Association of South East Asian Nations (ASEAN) Telecommunication Regulator's Conference (ATRC) which was held in Singapore early last month, ASEAN regulators reaffirmed their firm commitment to intensify co-operation in the field of telecommunication regulation and signed a joint statement of intent. Among the various areas of co-operation, ASEAN will jointly work towards the development and link up of NIIs in ASEAN. ASEAN countries will seek to ensure the "dovetailing" of their individual NIIs such as Indonesia's Nusantara 21, Malaysia's Multimedia Super Corridor, Philippine's SARNET, Singapore's SingaporeONE and Thailand's Information Superhighway projects so that they can, in turn, be effectively plugged into the larger Global Information Infrastructure (GII).
To keep pace with the rapid changes in the industry such as those that I have just described, many countries are liberalising their telecommunication markets. Market forces enable the dynamic and economic allocation of capital, resources and human expertise, thus ensuring constant technological and service innovation.
Like the rest of the world, Singapore has been liberalising its telecommunications market to keep pace with industry changes. In line with the need for a competitive industry structure, the Singapore Government decided last May to shorten Singapore Telecom's monopoly rights under its current licence for the provision of public basic telecommunication services by 7 years. On 23 September 1996, Government announced its intention to award up to two more basic telecommunication services licences for commercial service provision from 1 April 2000. The pre-qualification phase for the basic services tender which opened on 1 March 1997, attracted three consortia. All 3 consortia were subsequently pre-qualified and invited to participate in the main tender exercise which started on 1 August 1997 and will close on 31 December 1997. We have also announced that we will further liberalise the basic telecommunication services market from 1 April 2002.
To ensure all segments of the telecommunication market are equally competitive, the Government made a concurrent announcement in March this year that we would further liberalise the mobile phone services market upon expiry of the current duopoly situation from 1 April 2000. TAS intends to award up to two more mobile phone operators by way of public tender. The number of operators to be licensed will depend on the quality of the tenders received and the attractiveness of the tenders' business proposals.
I am pleased to inform you that the tender process will commence on 1 October 97 with the release of the tender document by the Telecommunication Authority of Singapore. The tender document is intended to assist interested parties in preparing their tender submissions. Interested parties will be given three months till 31 December 1997 to put together their tender submission in accordance with the general guidelines and detailed information requirements stated in the tender document.
The results of the mobile phone services tender are expected to be announced by mid-1998, together with the results of the basic telecommunication services tender. The successful licensees will have at least 20 months to build, rollout and test their networks and services before launching commercial services from 1 April 2000. The timing of the basic telecommunication and mobile phone services tenders has been synchronised to enable parties who tendered and are successful in both tenders, to enjoy the possible synergies and cost savings offered by joint infrastructure development and network roll-out.
I am also pleased to announce that, as a result of TAS' larger review of the overall telecommunication industry, the annual recurrent licence fees for both mobile phone and paging services operators will be lowered to a flat rate of 1% of Annual Gross Turn-Over (AGTO). This new annual recurrent licence fees will come into effect on 1 April 2000 and will apply to all mobile phone and paging services licensees including existing operators till the expiry of their licences. This fee revision is expected to result in cost savings of S$300 million to mobile phone and paging services operators, which can in turn translate to lower prices of mobile services for consumers.
The reduction in licence fees is to ensure that the mobile phone and paging service markets continue to grow and thrive, bring more competitive prices and enhanced quality of service standards to consumers. With this licence fee reduction, both mobile phone and paging services operators should be able to keep their operating costs reasonable and help lower the costs of doing business in Singapore. These costs savings can and should be passed on to end users in terms of more attractive tariffs, which in turn, will generate greater demand and boost service take-up rates further. Operators will also be able to channel more resources towards enhancing the attractiveness and quality of their services. The alignment of annual recurrent fees for all TAS' public licences is also undertaken in recognition of the growing convergence across various public telecommunication services.
Opportunities and Challenges Ahead
In conclusion, the future of Asia's economic competitiveness hinges on continued receptiveness to technological changes, strong commitment to infrastructure development and rapid introduction of relevant info-communication services that meet the needs and interests of consumers and businesses.
It is important that the content and conduit providers also share a common vision of the future. This will provide a solid foundation on which business strategies could be formulated to complement each other and together maximise benefits for consumers, businesses and their national economies.
I look forward to listening to the deep insights and thoughts on the coming information-communication revolution which the distinguished panelists will share with us later. On this note, I wish the Symposium organisers and participants every success.