Mr Leong Keng Thai, Director-General Telecommunication Authority of Singapore (TAS) Speech at ASEAN Telecom 98 Conference - 'A Glimpse into the Future: Updates on Telecommunications Development in Asean and its Future Direction'
Mr Leong Keng Thai, Director-General
Telecommunication Authority of Singapore (TAS)
Speech at ASEAN Telecom 98 Conference - 'A Glimpse into the Future: Updates on Telecommunications Development in Asean and its Future Direction'
Kuala Lumpur, 3 November 1998
Good Afternoon, Ladies and Gentlemen,
1. Given the break neck speed at which telecommunication developments are currently unfolding in the world, this topic is indeed very timely and exciting. It is indeed an opportune time now to be gathered here with you, together with my fellow panelists to have a discussion and dialogue on the development and future of telecommunications in ASEAN.
The ASEAN Telecommunication Landscape
2. The ASEAN telecommunication industry is undergoing great change. The forces of competition, technological advancements and convergence sweeping the globe have left an indelible mark in the ASEAN region. Spurred by the ripples of competition emanating from US and Europe, the pace of telecommunication liberalisation in ASEAN has been gathering momentum as countries rapidly develop their info-communication industries to further boost their economic competitiveness in the Information Age. There is also strong consumer demand to leverage on the wide range of products and services such as Internet telephony and virtual private networks, brought about by the rapid and vast technological innovation and creativity. Telcos too, are increasingly rethinking their strategies for survival as the convergence of IT, broadcasting and telecommunications attract nimble non-traditional players offering cross-technology and cross-industry services into the market place.
3. However, against the developments unfolding above overhangs a backdrop of financial turmoil and economic uncertainty. Nonetheless, in spite of these difficulties, the economic potential for the telecommunication industry in Asia remains strong. While growth may be currently slowing down, the sheer size of the Asian market cannot be ignored. In 1997, the region's telecommunication sector accounted for 20% of the world's telecommunication revenue and this is expected to increase significantly over the next decade. Key growth areas will be the cellular, Internet and other IT-related industries. It has been estimated that the cellular industry in Asia grew at an average of 60% in 1997 and the number of mobile subscribers is expected to increase to 110 million by the year 2000. This represents almost one-third of the global market. While these statistics are likely to be revised downwards as a result of the current crisis, the opening up of huge markets such as China, Vietnam and India will ensure continued expansion of the industry.
4. The future holds much promise for the ASEAN telecommunication industry, but our success will depend on how well we can work together to better manage, harness and maximise the benefits and opportunities of the information age. Various collaborative initiatives are already well in progress and these include the establishment of an ASEAN Mutual Recognition Agreement, the design of an ASEAN e-commerce framework and the development of ASEAN broadband interconnectivity. Such initiatives will allow countries to mutually tap on and learn from each other's unique expertise, experience and knowledge, thereby enhancing the overall development of telecommunications in the region.
Singapore's Telecommunication Industry
5. 1998 has been an eventful year for Singapore's telecommunication industry. The first anniversary of mobile and paging competition passed in April this year and to date, we have 2 mobile phone operators and 4 paging operators offering their services in Singapore. I am pleased to say that the results of competition have more than surpassed our expectations. The number of mobile phone subscribers has more than doubled to give us a penetration rate of 30% and our paging penetration rate continues to be one of the highest in the world at 43%. Prices have fallen and in the case of the paging subscription tariffs, more than halved, and consumers are now enjoying a wider rage of innovative value-added services.
6. In May this year, we passed yet another significant milestone towards full liberalisation when we awarded the second basic telecommunication licence and a third cellular licence through public tenders. The new operator, StarHub, will begin commercial services on 1 April 2000 when SingTel's monopoly expires. Consumers and businesses can look forward to even more attractive prices, more innovative services packages and higher quality of service.
7. The provision of Internet access services in Singapore was further liberalised last month. All parties who meet the minimum licence and service criteria set by TAS will be granted a licence. In this connected and data intensive world that we live in, the potential of the Internet as the next platform for communication is undeniable and the power of information cannot be underestimated. The further liberalisation of the market is expected to fuel Internet growth in Singapore and expand the opportunities and markets available to both service providers and consumers.
The Changing Role of the Regulator
8. With the liberalisation of the mobile communications market and the impending competition in the basic telecommunication services market, the role and the focus of our policy development must be reviewed and reassessed. The role and focus of TAS as a proxy competitor to Singapore Telecom is evolving to one of mediator of disputes, facilitator of competition and promoter of industry and technology development. The changing industry landscape from a monopoly provider to a competitive multi-operator environment means that greater resources must be channelled towards strengthening the competitive framework to ensure a level playing field and the development of fair, effective and sustainable competition. TAS will also play a greater developmental role, in particular the promotion of industry, infrastructure and technologies. At the same time, TAS will continue to ensure that our basic policy objectives of maximising consumer benefits, long term development of infrastructure and enhancement of Singapore's competitiveness in info-communication services continue to be achieved.
Policies for the New Millennium
9. Having outlined briefly the developments in the ASEAN region and the changing role of TAS, it would be logical that Singapore's telecommunication policies for the 21st century will be centered around two broad goals: (a) to ensure effective and sustainable competition in a multi-operator environment; and (b) to facilitate Singapore's transition into a knowledge-based economy.
10. TAS has laid the groundwork for facilities-based competition in 2000 with the licensing of our second fixed network operator who will be given 2 years to develop its network and establish itself in the market before TAS proceeds to further liberalise services-based competition in 2002. The diverse and robust telecommunication infrastructure and networks put in place by both fixed network operators will then be the foundation over which a multitude of exciting value-added and innovative services will be built upon. We will continue to play an active role in facilitating liberalisation by mandating an open and equal access regime and establishing anti-competitive safeguards. As the forces of competition develop in the market place, TAS intends take an increasingly light-handed approach towards regulating the industry.
11. Converging technologies and services are allowing service providers to offer an entire suite of seamless integrated multimedia services to their customers as well as to reap economies of scale and synergies from their different telecommunication networks. This was in fact one of the primary reasons for further liberalising the Internet service provision market in Singapore. An Internet access service licence would allow existing telecommunication service providers to enhance their traditional service offerings by leveraging on the ubiquitous reach of the Internet.
12. To prepare Singapore for the knowledge intensive future, TAS together with 4 other agencies spearheaded the development of Singapore ONE, the national high speed broadband multimedia infrastructure. Singapore ONE, was commercially launched in June this year. By the end of this year, every home, school, and business in Singapore will be able to connect to this network and access a multitude of broadband multimedia services. More than just fast Internet access, Singapore ONE will also provide users with more than 120 multimedia applications, ranging from learning, information access, e-commerce and business to entertainment. Singapore ONE can also be accessed conveniently, in places like community clubs, libraries and town centres. With a current subscriber base of 12,000, we anticipate its growth to 100,000 by the end of 1999.
13. Last but not least, we are also committed to developing the local R&D industry. In 1997, TAS established the Development Grant Scheme (DGS) with an initial budget of $100M over 5 years. The scheme is aimed at promoting the development of info-communication services and to encourage and nurture home grown info-communication industry into acquiring technological niche competency through applied research and development.
14. The future will be an exciting and challenging one for us all. We will undoubtedly all need to continue to foster greater collaboration within ASEAN to ensure that the widest possible scope and opportunities are made available to businesses and consumers. Telecommunication developments must be closely monitored and policies continually reviewed to ensure that ASEAN remains relevant. Only then will we continue to enhance our competitiveness in the new millennium.