Mr Yeo Cheow Tong, Minister for Communications & Information Technology Address - Opening of Comdex Asia 2000, Suntec Singapore
Mr Yeo Cheow Tong, Minister for Communications & Information Technology
Address - Opening of Comdex Asia 2000, Suntec Singapore
Singapore, 5 April 2000
1. We are being swept into a new, high-growth e-economy, one powered by the Internet and other infocomm-related technologies. This new e-economy is best exemplified by what is happening in the US economy. As we all know, the US has been experiencing a remarkable extended economic boom. What is even more remarkable is that this boom has, so far, been accompanied by low inflation. Most analysts attribute this largely to productivity gains brought about by heavy investments in technology. Such investments have also resulted in the infocomm sectors in the US growing in the past few years at double the rate of the overall economy.
2. The Singapore government recognised the vast economic potential of the Internet economy several years ago. Together with the private sector, we have invested heavily in the Internet infrastructure to give Singapore the first-mover advantage in the region. We set up Singapore ONE, a broadband infrastructure, to provide the necessary bandwidth to carry multimedia-rich content and applications. Singapore ONE is now accessible by more than 99% of homes, all schools, and a numerous public libraries and community centres. We also established high-speed, peer-to-peer Internet links with countries in the Asia-Pacific, US and Europe to provide global connectivity. We have also put in place the secure infrastructure to support Internet commerce, such as the public key infrastructure with digital certificates.
3. In June last year the Government announced its intention to formulate the Infocomm 21 Masterplan. The aim is to develop Singapore into a dynamic and vibrant Infocomm Capital with a thriving and prosperous Internet Economy by 2010. My ministry has largely finalised the major strategies of Infocomm 21, and have already announced three main components, namely:
Bringing forward the full liberalisation of the telecoms industry to 1 April 2000,
Developing and attracting the infocomm manpower and talents,
and 'Dot-coming' the people sector.
4. Other components of Infocomm 21 will be released in the next two months. Today, I shall focus on the strategies for developing Singapore into a leading infocomm hub in the Asia-Pacific for telecommunications services, e-business transactions, and distribution of digital goods and services.
Developing Singapore as an Infocomm Hub
5. The first major step in realising this vision has been taken, and that is the full liberalisation of the telecommunications industry on 1 April. The next step is to grow the infocomm industry into the next major sector of growth in Singapore's knowledge-based economy.
6. Singapore's infocomm industry, comprising hardware, software, services and telecommunications, chalked up S$20 billion in sales revenue in 1998. It contributed between 5% to 6% of Singapore's GDP. Our goal is to double the size of the industry by 2005, with exports constituting 70% of total sales revenue.
7. We will focus on new growth areas such as e-commerce application software and services, broadband applications, content hosting and development, mobile and wireless communications, mobile Internet services, and embedded software in information appliances and smart devices. These focus areas are projected to grow at the rate of between 60% and 200% worldwide in the next few years.
8. Except for information appliances and smart devices, Singapore has already established a good headstart in these high-growth areas through the implementation of Singapore ONE and the E-Commerce Masterplan, and R&D efforts at the Centre for Wireless Communications, Kent Ridge Digital Laboratories and other research institutes and centres. Many of our educational institutions have also included aspects of these in their curricula, in anticipation of the new Internet economy.
9. The Infocomm Development Authority of Singapore (IDA) has identified three main strategies for accelerating the growth of the new infocomm industry.
Jumpstarting the Interactive Broadband Multimedia (IBBMM) Industry
10. First, jumpstart the development and growth of an interactive broadband multimedia (IBBMM) industry in Singapore. The Singapore ONE infrastructure is the ideal platform for the development, pilot testing and deployment of innovative IBBMM content, applications and services. We are committed to creating a multi-player, competitive environment that makes access to broadband services cost-effective to developers and consumers alike.
11. To achieve this, we will mandate open interconnect access to SingTel's and SCV's broadband infrastructures. This will allow other players to also offer broadband services and provide consumers with the flexibility and freedom of choice. The IDA is now reviewing the broadband open access regulatory framework needed to achieve this, and will announce details in due course. Concurrently, the IDA is also reviewing the minimum quality of service framework for broadband access service providers in order to raise the overall technical performance.
12. A number of the new facilities-based operators licensed recently have also indicated that they will be deploying their own broadband access infrastructure, including fibre and via wireless technologies. The IDA will undertake a comparative selection exercise to award fixed wireless broadband services before the end of the year. We can therefore look forward to the presence of multiple broadband access networks and consumers will certainly benefit from this enhanced competition.
13. I would also like to announce, at this point, the government's provision of a S$150 million package to stimulate both the demand for and supply of IBBMM content and services. The funds will be applied in four areas.
14. First, a large part of this package will be used to offset the high cost of infrastructure and equipment to enable broadband access at the 'last mile'. Benchmarked against the rest of the world, our local service providers are already offering competitive prices for broadband access through ADSL and cable modems today. But we want to accelerate the take-up rate further. The target is to build up a critical mass of 200,000 users of Singapore ONE by the end of the year, from about 100,000 today. This will make us a more attractive and viable market to major content and service providers.
15. Second, the government will co-share some of the costs for the provision of the international leased circuits through the broadband infrastructure, as this is still a major cost item today. However, we expect competition in the liberalised telecommunications market to also result in prices of leased circuits dropping significantly in the near future. The need for us to co-share the cost of ILC will therefore reduce over time.
16. Third, we will set up an IBBMM Content Hosting Scheme to attract content providers to host or hub their content in Singapore. Modeled along the lines of the highly successful Online Hosting Scheme of Singapore ONE, this new scheme will co-share the risks of content providers who intend to develop and deploy IBBMM content in an untried market. With this financial offset, content providers will be more willing to develop new and innovative content for our market.
17. Fourth, the government will incentivise the development of new media services brought about by the convergence of technologies, to make broadband services more accessible to consumers. Examples of new media services are those provided by wireless Internet (WAP), interactive TV and new information appliances.
18. In addition to the IBBMM package, there will be a major initiative to broadband-enable high-rise commercial buildings or industrial parks to create many cyber-precincts in Singapore. With such facilities, start-up companies or MNCs that want to go into IBBMM development and intensive usage can do so quickly, and use Singapore ONE as the testbed. And we are not talking about a few years' time. We are talking about now. The broadband enabling of buildings in the Chai Chee Industrial Estate and Suntec City are prime examples of the many cyber-precincts that are, or will be available in Singapore shortly, to house both start-ups and established companies.
19. The Singapore Tourist Board is also encouraging hotels to offer broadband facilities and services to their guests, through its Hotel Refurbishment Scheme. This allows hotels which broadband-enable their rooms as part of their refurbishment projects to claim additional tax allowances.
20. We recognise that the provision of broadband access will increasingly be the norm for all the new buildings located within key cities. It is thus important for existing building owners to reposition themselves by retrofitting and upgrading their buildings to provide broadband access to their tenants and guests.
Building New Capabilities and Leveraging on Innovation
21. The second strategy for accelerating the growth of the infocomm industry is to build new capabilities needed for the new Internet economy. Besides technology prowess, new infocomm companies, especially local enterprises and start-ups, must be knowledgeable about operating in a global marketspace. They must be capable of achieving quick time-to-market, and creating and protecting their intellectual capital. To help local enterprises, IDA will expand the scope of the highly successful IT Local Industry Upgrading Programme (LIUP). Together with the global technology players, IDA will involve other partners such as venture capitalists, patent lawyers, and financial and business consultants. Our target is to have 200 local enterprises participating actively in the enhanced Infocomm LIUP by end of 2002.
22. Beyond the Infocomm LIUP, IDA, together with EDB and NSTB, will also facilitate collaboration between industry players and research institutes in key emerging technologies. Such collaboration can be conducted through joint development projects or competency centres focused on cutting edge technologies such as 3G wireless and mobile computing, speech recognition and language translation, and embedded software technology. Our target is to have 10 such key collaborative projects by the end of 2002.
23. IDA will continue to actively promote innovation in the infocomm industry. Innovation is critical, in a fast moving sector such as the infocomm industry. The convergence of computing, communications and content is creating new demands and opportunities which our local enterprises can and must capitalise on. We will therefore extend the Innovation Development Scheme to cover the new growth areas of infocomm development.
Fostering Strategic Partnerships and Alliances Overseas
24. The third thrust is to foster strategic partnerships and alliances overseas, to help our local companies regionalise and globalise. Through such overseas linkages, local enterprises can tap into foreign resources and talent, and expand into regional and global markets. Last month, IDA announced that it is setting up an outpost in Silicon Valley to help local enterprises enter the US market. This outpost will tap into the latest buzz in the vibrant US infocomm sector to help identify new business opportunities and to match-make US and Singapore companies. IDA will also work closely with and leverage on infocomm industry associations to create more of such synergistic partnerships and alliances.
25. In addition, we will strengthen our linkages with emerging regional markets such as India and China. Both are poised to be significant infocomm players. Our companies can obtain vast synergies by co-operating with them in servicing the regional markets. Just last week, I signed a Memorandum of Understanding with the Indian Minister of IT to set up a task force for infocomm collaboration between Singapore and India. I would strongly encourage the private sector to join us in this collaboration.
26. Besides the immense market potential due to sheer population size, both India and China are also great sources for original Asian content. Singapore, with its multi-lingual and multi-cultural population, is well positioned to translate, digitise and convert these content to interactive broadband multimedia, and to repackage and redistribute them worldwide.
27. Both India and China are also producing large pools of talented infocomm professionals. Singapore can tap into this talent pool to meet our anticipated shortfall in infocomm manpower over the next 10 years. We will also attract promising Asian entrepreneurs to set up 'dot-com' companies in Singapore, and use us as their global launching pad.
28. We are living in exciting times. What we are seeing of the Internet economy today is but the tip of the iceberg. No one knows for sure how big this new economy will grow. Projections for the future are constantly being revised upwards. What is certain is that unless countries embrace the changes and leverage on the technologies, they would be left behind. We cannot afford to be complacent. There is no turning back.
29. On that note, let me end by wishing all our overseas visitors and participants an interesting, enjoyable and fruitful stay in Singapore. With that, it is now my pleasure to declare Comdex Asia 2000 open, and I wish all of you a highly successful exhibition.