Singapore to Speed Up Telecom Deregulation

Singapore's government announced on Friday that it plans to bring forward the start of full competition in the island nation's telecommunications market from April 1, 2002, to April 1 this year. At the same time it also announced an immediate lifting on direct and indirect foreign equity limits for all public telecommunications service licenses.

The change comes as a result of the dramatic changes seen in the worldwide telecommunications industry since the government's previous deregulation roadmap was decided upon in May 1996, it said. Because other countries in the region have opened up their telecommunications markets to foreign investment, Singapore needed to act to maintain its competitiveness, the government said.

Creating an open market is a critical step towards attracting investment and meeting the government's goal of making Singapore the information and communications hub of Asia, according to the statement.

The government had planned to introduce limited competition this year through the start of business of StarHub, a joint-venture telecom carrier of ST Telecommunications Pte. Ltd., Singapore Power Ltd., NTT Communications Corp. and British Telecommunications Plc. The company won a license in 1998 to provide the first ever competition at the local level for state-run Singapore Telecommunications Ltd. [See "BT, NTT Consortium Wins Singapore Telecoms License," Apr. 27, 1998].

Announcing the change in its plans, the government said it will also compensate StarHub and SingTel for any potential loss of profit resulting from the new timetable. The Info-communications Development Agency (IDA) of Singapore will study the amounts of money to be paid to the two companies, it said.

New entrants to the market will have complete freedom to decide on the types of services, networks and technical systems they adopt, the government pledged. It added that detailed guidelines for applicants will be published on January 31, after which applications for licenses will be accepted. The IDA will judge the merits of each license, and there will be no restriction on the number of licenses issued for each type of service.

The news comes almost two years to the day since Hong Kong's government reached a deal with Hongkong Telecommunications Ltd. (now Cable & Wireless HKT Ltd.) to end its exclusive international license and introduce competition in that sector. Like Singapore, Hong Kong is vying for the position of leading telecommunications hub in Asia, and the deal with Hongkong Telecom, which included a HK$6.7 billion (US$865.6 million) compensation payout, was also aimed at promoting competition and making the territory more appealing to foreign companies [See "Hongkong Telecom OKs Earlier End to Exclusive License Deal," Jan. 20, 1998].

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