2010 Singapore - Telecoms, Mobile and Broadband

This report looks at one of the outstanding telecommunications markets in Asia – Singapore. At the same time as building its sophisticated telecoms infrastructure, Singapore has successfully promoted itself an IT hub and a place of excellence when it comes to all things to do with IT and telecommunications. It is determined to maintain its status.

With strong leadership from its government and good support from its telecom service providers, Singapore has continued to be both a regional leader and a global player in telecommunications. The island-state certainly generates a positive outlook in its local telecommunications sector. The country has built what is widely seen as a high quality and extremely progressive telecommunications regulatory regime that has, in turn, resulted in a richly competitive market. All restrictions on direct and indirect foreign ownership within the country’s telecom sector have been lifted. In such a progressive commercial environment, over 97% of homes have fixed-line telephone connections. Singapore was also one of the first countries in the world to have a fully digital telephone network.

Although incumbent Singapore Telecommunications (SingTel) continues to play a major role in the Singapore telecom sector, liberalisation has seen a host of new operators entering the market, helping to exploit the competitive situation. In the lead up to officially liberalising the market, the government issued five facilities-based and 29 service-based licences. Prompted by the arrival of strong competition in its own backyard, SingTel decided to expand offshore and, in what eventually turned out to be a successful strategy, the company has been able to establish a considerable presence in regional markets, including 100% ownership of Optus, the second ranked mobile operator in Australia. Its other subsidiaries are in India, Indonesia, the Philippines, Thailand, Pakistan and Bangladesh. By early 2010 the SingTel group had around 300 million mobile subscribers in its operations across the region.

Some years back Singapore’s mobile sector was being described as a mature market. This was clearly a premature call. The country has continued to grow both its mobile subscriber base (143% penetration by January 2010) as well as its value-added data services. The launch of 3G services has focused particular interest on Singapore’s telecom market. There was a period of what could only be described as hesitancy surrounding 3G and the take up of the service was initially slow after its launch in 2005. Subsequently, however, there has been a strong upsurge in demand. No doubt this has been helped by the wider availability of more affordable, high feature handsets. By early 2010, there were more than 3.2 million 3G subscribers in a country where the total mobile market was 6.9 million. This meant that 3G subscribers represented a compelling 47% of the total subscriber base as 3G rapidly approached becoming the ‘normal’ mobile service in the country.

The Singapore government’s continuing vigorous support for the ICT sector saw the launch in 2006 of a 10-year Infocomm Master Plan, labelled the Intelligent Nation 2015 (iN2015). Then the country’s sector regulator, the Infocomm Development Authority (IDA), announced in early 2008 that S$1 billion (US$725 million) had been allocated by the government to support the building and operating of the proposed national broadband network. A comprehensive national optical fibre-based network was to be part of what was called the Next Generation National Infocomm Infrastructure (Next Gen NII); the strategy also included a wireless network. The government allocated funding to be split between an operating company (referred to as the OpCo), receiving S$250 million, and a network company (referred to as the NetCo), which was to get S$750 million.

The OpenNet consortium was declared in late 2008 as the winning bidder in the tender to be the NetCo and take responsibility for designing, building and operating the passive infrastructure of the network, making use of existing ducts and other underlying infrastructure. Then in April 2009 StarHub’s Nucleus Connect won the OpCo contract and the right to build and operate the wholesale broadband network across Singapore. By March 2010 the IDA was reporting that the roll-out was on track and that Nucleus would commence offering commercial services by June 2010, with coverage reaching 60% of the population by end-2010 and providing universal coverage by 2013.

Surprisingly, the Singapore market had initially moved slowly on the large-scale adoption of broadband access. This was despite the country being the first in the world to deploy DSL commercially back in 1997. Following a major effort in expanding its broadband services, however, Singapore has now become a serious player with effectively 100% of Internet households having broadband access. Apart from the high household penetration, public access its especially good; Singapore’s Wireless@SG initiative has put in place more than 5,000 public hotspots around the island. The country has positioned itself well for the development and adoption of Next Generation (NGN) services. It was evident from the level of intense activity that the iN2015 master plan was on track to be fully implemented.

Market highlights:

• Singapore’s overall mobile telephone penetration is now well over the 100% mark (138% in January 2010) and continuing to increase;
• The country’s 3G market is booming; there were around 3.2 million 3G subscribers at the start of 2009; this meant 47% of all mobile subscribers were 3G subscribers;
• Effectively 100% of Singapore’s households now have some form of high speed broadband Internet access;
• The Singapore government has initiated a huge project to build the Next Generation National Infocomm Infrastructure (Next Gen NII), an island-wide broadband network;
• Importantly, the Next Gen NII project has been structured to ensure an ‘open system’ with access being available to all operators;
• The IDA reported in March 2010 that the roll-out of Next Gen NII was running to schedule, therefore offering the first of the commercial services by June 2010, with a roll-out to 60% of the population by end-2010 and universal coverage by 2013.
• In a complementary strategy the government has also launched its Wireless@SG project, aimed at covering most of Singapore island with free wireless Internet access;
• Fixed-line telephone services remain remarkably resilient in Singapore with an estimated 96% of households connected to the fixed network; about 20% of the population have two fixed-line telephones at home.

Singapore: - key telecom parameters – 2009 - 2010

(Source: BuddeComm)

Note: ¹In 2007 the IDA changed its methodology to include not just fixed broadband services but all forms of wireless broadband resulting in a significantly larger total broadband subscriber base.

Data in this report is the latest available at the time of preparation and may not be for the current year.