1 3.2 1.0 THE DOT CITY: SINGAPORE INTERNET CASE STUDY - ITU
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THE DOT CITY:
SINGAPORE INTERNET CASE STUDY
a f t
Dr 2001
03 .
01.
February 2001Michael Minges, Magda Ismail and Larry Press wrote this report. Vanessa Gray
provided editorial comments and Nathalie Delmas handled formatting and
production. Vincent Tan Fu Ming of Radin Mas Primary School in Singapore
drew the picture on the cover. The authors are indebted to the Infocomm
Development Authority of Singapore for its support and particularly Meng
Chung Lee who graciously dealt with the logistics. The report is based on
field research undertaken 24-28 July 2000 as well as reports and articles
identified in the bibliography or as footnotes. We would like to thank Jenny
Yeo (Radin Mas Primary School), Alvin Kuek (AsiaStockWatch.com), Tan Yap
Kwang (CHECK BUSINESS CARD IF NAME IS CORRECT) (Ministry of Educa-
tion), Colin Quek (National Healthcare Group), Yap Siew Luan (AsiaOne),
Lum Yoke Wah (Ministry of Health), Cecilia Yip (Singapore Broadcasting Au-
thority), as well as the Info-communications Development Authority (IDA)
for their valuable comments on the draft version of this report.
The views expressed are those of the authors and may not necessarily re-
flect the opinions of the International Telecommunication Union, its mem-
bers or the Government of the Republic of Singapore. This report is one of a
series of Internet Case Studies. Additional information is available on the
Internet Case Studies web site at www.itu.int/ti/casestudies.
© ITU 2001
iiContents
1. Country background .............................................................. 1
1.1 Overview ............................................................................. 1
1.2 Demography ........................................................................ 1
1.3 Economy ............................................................................. 1
1.4 Human development ............................................................. 2
1.5 Political ............................................................................... 2
2. Information and Communication Technology markets .......... 4
2.1 Telecommunication Sector ..................................................... 4
2.2 Information Technology Sector ............................................. 11
2.3 Mass media ....................................................................... 13
3. Internet policy .................................................................... 18
3.1 Role of incumbent telecom operator ...................................... 18
3.2 Pricing .............................................................................. 18
3.3 Regulatory issues ............................................................... 20
3.4 Universal access ................................................................. 23
4. Information & Communication Technology & the Nation .... 28
4.1 Government ...................................................................... 28
4.2 Health .............................................................................. 31
4.3 Education .......................................................................... 33
4.4 Electronic commerce ........................................................... 39
5. Summary & recommendations ............................................ 44
5.1 State of the Internet in Singapore ........................................ 44
5.2 Recommendations .............................................................. 46
Annex 1: List of meetings ......................................................... 49
Annex 2: Acronyms and abbreviations ..................................... 50
Annex 3: Useful links ................................................................ 51
Annex 4: Framework dimensions ............................................. 52
Annex 5: Bibliography .............................................................. 54
iii1. Country background
1. Country background
1.1 Overview 1.3 Economy
The Republic of Singapore, with an area With a small domestic market, few
of only 660 square kilometres, is located natural resources, and a strategic lo-
in Southeast Asia at the southern tip of cation, Singapore has a long history
the Malaysian peninsula. It is comprised as a trading nation. It leads the South
of a main island and several islets. Sin- East Asia region in imports and ex-
gapores northern neighbour is Malay- ports per capita. Singapore has a serv-
sia, linked by a bridge crossing across ice-oriented economy and its GDP per
the Johore Strait. On
the south, is Indone-
Figure 1.1: Map of Singapore
sia. Singapores stra-
tegic location at the
crossing of many trade
routes has contributed
strongly to its history
and economic devel-
opment. The island is
relatively flat, with a
tropical temperature
due to its proximity to
the equator and abun-
dant rainfall from its
sea exposure. Less
than two per cent of
the land is used for
agriculture. The rest is
evenly divided be-
tween developed and
undeveloped areas.
The name of the coun-
try is derived from a
Sanskrit word
SingaPura (Lion City).
1.2 Demography
In June 2000 the Source: The World Factbook 1999.
population of Singa-
pore was four million,
of which 3.0 million citizens. 1 The capita of US$ 24210 ranks eighth in
population is predominantly Chinese the world. The strength of the
(77 per cent) but there is widespread economy is shown by its ability to con-
emphasis in government and the cul- tinue growing (albeit slowly) during
ture for equal treatment of the Malay the Asian economic downturn of 1997-
(14 per cent) and Indian (8 per cent) 98 (Figure 1.2). While these facts re-
ethnic groups. Chinese, Malay, Tamil flect a healthy, robust economy, they
and English are all official languages, do not reveal the active planning role
with English being the predominant of the government, which, in combi-
language in business and government nation with an atypical Civil Service
dealings. Some 20 other languages policy, has had a profound effect on
are also used on the island.2 Singapore.
1Singapore Case Study
Figure 1.2: Weathering the storm
Singapore distribution of GDP, 1999 and GDP change over previous year
6LQJDSRUH*'3*URZWK
Manufacturing
26%
Services
66% Construction
8%
6LQJDSRUH
*'36KDUH
7RWDO 6ELOOLRQ
1995 1996 1997 1998 1999
Source: Singapore Department of Statistics.
1.4 Human development 1.5 Political
While Singapore enjoys the eighth Singapores recent history dates back
highest GDP per capita in the world, it to 1819 when Stamford Raffles estab-
ranks only 24th on the United Nations lished a British trading post on the is-
Development Programmes Human land. Singapore became a Crown Colony
Development Index (HDI). The HDI is in 1867, a situation that lasted until
a function of wealth, health, and edu- 1959 with an interruption during the
cation, and, while Singapore ranks Japanese occupation between 1942 and
high on GDP per capita and life ex- 1945. There was a strong independence
pectancy, it is pulled down by a rela- movement, and elections were held for
tively poor performance in education. self-government in 1959. The Peoples
The mean years of schooling is Action Party (PAP) won the election and
8.1 years and the literacy rate 94 per- Lee Kuan Yew became the first Prime
cent, both relatively low for such an Minister of the State of Singapore. Lee
affluent nation.3 Table 1.2 compares pressed for a union with Malaya and
Singapores HDI to other Association when Malaysia was formed in 1963, it
of South East Nations (ASEAN) as well included Singapore. Singapore withdrew
as several developed economies in the in 1965 and became an independent
Asia-Pacific region. Singapore is the republic. The PAP has ruled continuously
highest-ranking ASEAN nation in hu- since 1965 and Goh Chok Tong became
man development, and ranks second the countrys second Prime Minister in
in Asia after Japan. 1990.
21. Country background
Table 1.1: Human Development Indicators
Singapore compared to selected Asia-Pacific economies, 1998
Combined
Life Adult school gross GDP per
expectancy literacy rate enrolment capita
HDI at birth (years) (%) ratio (%) (PPP US$)
Rank Economy 1998 1998 1998 1998
4 Australia 78.3 99.0 114 22'452
9 Japan 80.0 99.0 85 23'257
20 New Zealand 77.1 99.0 96 17'288
24 Singapore 77.3 91.8 73 24'210
26 Hongkong SAR 78.6 92.9 64 20'763
31 Korea (Rep.) 72.6 97.5 90 13'478
61 Malaysia 72.2 86.4 65 8'137
Source: United Nations Development Programme.
1
Singapore Department of Statistics. Singapore Census of Population 2000 A Quick Count. Press
Release 17. 31 August 2000.
2
http://www.sil.org/ethnologue/countries/Sing.html.
3
Literacy data reported by Statistics Singapore differs from that reported by the UNDP even though the year
and concept used by both appear to be the same.
3Singapore Case Study
2. Information and Communication Technology markets
2.1 Telecommunication Sector Operators (FBO) in the country. Due
to the small market and technical and
Singapore has one of the most ad- financial constraints, it is unlikely that
vanced telecommunication networks in the number of FBOs will grow signifi-
the world with very high levels of ac- cantly. The countrys FBOs include:
cess. This has been possible due to the
small size of the countryessentially a · Singapore Telecom (SingTel)
large cityas well as rising levels of in- is the nations
come and government commitment to incumbent operator. As in many
telecommunication excellence. The tel- countries, SingTel enjoyed a mo-
ecommunication market has been char- nopoly until recently. However,
acterized by progressive liberalization unlike many countries, the level
from a state-owned monopoly provider of infrastructure development and
to full competition. quality of service was high with
SingTel striving to measure up to
2.1.1 Regulation and policy- international best practice. SingTel
making was partially privatized in 1993
Government ministries are responsible and is a major international inves-
for overall policy with subsidiary statu- tor in its own right with over
tory boards providing technical support US$ 2.5 billion invested in
and day-to-day regulation. The Minis- 19 countries. Singapore Post, the
try of Communications and Information countrys postal service, is a sub-
Technology (MCIT) is responsible for sidiary of SingTel. At end
overall transportation, postal services March 2000 SingTels domestic
and Information and Communications network included 1.9 million fixed
Technology (ICT) policy. The Info-com- line subscribers and 1.1 million
munications Development Authority mobile cellular subscribers.
(IDA) is the statutory board responsi-
ble for regulating and promoting postal · Mobile One (M1) was formed in August
late 1999 from the merger of the Tel- 1994 to bid for Singapores sec-
ecommunication Authority of Singapore ond mobile cellular license. It was
(TAS) and the National Computer Board awarded mobile cellular and ra-
(NCB). dio paging licenses in May 1995.
Both services were launched on
The Ministry of Information and The 1 April 1997 when SingTels mo-
Arts (MITA) was created in 1990. It is nopoly in these areas expired. M1
the public relations arm of the gov- started with a GSM-900 system
ernment. It also oversees the regula- and introduced a CDMA network
tion and promotion of the broadcast, in June 1998. M1s shareholders
Internet content and print media, as are Keppel Group (Singapores
well as the arts and heritage sectors. largest industrial conglomerate)
The Singapore Broadcasting Author- (35%), Singapore Press Holdings
ity (SBA) is the statutory board re- (35%), Cable & Wireless (UK)
sponsible for broadcasting regulation, (15%) and Pacific Century
including Internet content. Cyberworks (Hongkong SAR)
(15%). M1 had around
2.1.2 Operators 600000 mobile cellular subscrib-
Singapores small size coupled with the ers at 30 June 2000.
recent introduction (April 2000) of full
telecommunication means that there · StarHub < www.starhub.
are only a handful of Facilities-Based com.sg> won fixed and mobile
42. Information and Communication Technology markets
cellular licenses in April 1998. It second quarter of 2001. It will
launched its fixed and mobile leverage its cable television in-
services (GSM 1800) on 1 April frastructure to provide cable te-
2000. StarHub bought CyberWay, lephony, its third service after
an ISP in January 1999 and cable television and Internet ac-
rebranded it as StarHub Internet cess.
in December 1999. StarHub is
owned by Singapore Technolo- 2.1.3 Market liberalization
gies (34.5%), Singapore Power
(25.5%), NTT (Japan) (22%) and IDA has tried to abide by a well-
BT (UK) (18%). At June 2000 it planned timetable in liberalizing the
had 79000 mobile subscribers industry (see Table 2.1). However,
and an estimated five per cent rapid global changes have led the gov-
share of the international tel- ernment to advance liberalization on
ephone market. several occasions. For example,
SingTel initially had a monopoly on
· Singapore Cable Vision (SCV) fixed-line and international services
, the islands until 31 March 2007. In May 1996, this
cable television monopoly, ob- was changed to a duopoly to begin
tained a facilities-based (fixed) 1 April 2000. In January 2000 it was
telecommunication license in announced that the duopoly would be
June 2000. It is expected to abolished and the market fully opened
launch telephone service by the to competition in April 2000. The gov-
Figure 2.1: Singapore Inc.
Ownership of Singapore's telecom industry, June 2000
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Source: ITU compiled from company reports.
5Singapore Case Study
Table 2.1: Telecom liberalization milestones
Singapore compared to selected Asia-Pacific economies, 1998
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Source: United Nations Development Programme.
62. Information and Communication Technology markets
ernment has been successful in ad- are considered local. There are sepa-
vancing the liberalization timetable by rate monthly telephone line rentals for
convincing incumbent license holders residential and business subscribers.
to accept the changes in return for fi- Local calls had been included in the
nancial compensation.1 flat monthly charge until Decem-
ber 1991 when a usage-based call
2.1.3.1Privatization charge was introduced (1.4 Singapore
cents per minute peak and 0.7 Singa-
SingTel was partially privatized pore cents off-peak). To compensate,
through two public sales of shares to fixed telephone residential monthly
the public in October 1993 and Sep- subscriptions were dropped from
tember 1996. Temasek, the Singapore S$ 15.83 (US$ 9.13) to S$ 8.33
government holding company, has (US$ 4.8), and business from
also made sporadic sales of its hold- S$ 24.17 (US$ 14.24) to S$ 12.50
ings to institutional investors. (US$ 7.21). A second change occurred
In July 1999 Temasek held 79.74 per in 1996 when the Goods of Service
cent of the company.2 The Singapores Tax (GST) was introduced, adding
government holdings in the telecom three per cent to telecommunication
sector go beyond SingTel as it has in- charges. No further changes to na-
direct stakes in all current operators tional fixed telephone charges have
through intermediary companies occurred. International call charges
(see Figure 2.1). have been steadily declining. SingTels
average international price per minute
2.1.3.2Licensing dropped from S$ 2.05 (US$ 1.18) in
1996 to S$ 1.21 (US$ 0.7) in 2000.
The provision of virtually any telecom-
munication service requires a licence Like fixed telephone prices, charges
issued by IDA.3 There are two gen- for entry level mobile cellular service
eral types of licenses: facilities or serv- have not changed dramatically despite
ices. Facilities-based operators require the introduction of competition. The
an individual license while services- major innovation has been the intro-
based operators may require either an duction of free minutes with the sub-
individual license or a class license scription. Singapore has a Receiving
(i.e., providers are assumed to have Party Pays system for mobile so users
read the licensing guidelines and are must also pay for incoming calls.
automatically licensed but neverthe- SingTel Mobile had seven different
less should register with IDA). In gen- plans in January 2000 that ranged
eral, individual licensees must pay an from S$ 25 (US$ 14.5) 325
annual license fee equivalent to one (US$ 187.4) per month, depending on
per cent of annual revenue subject to the number of free minutes included.
the respective minimum sums as
elaborated in Table 2.2 below, while 2.1.3.4Interconnection
class licensees pay S$ 200 (US$ 115)
every three years. Though there are Limited competition prior to April 2000
no pre-defined limits on the number has meant that interconnection has not
of licenses, technical limitations (e.g., been much of an issue. Interconnec-
spectrum) and market considerations tion among facilities-based operators is
influence the issuance of facilities- required but left to commercial nego-
based licenses. tiations. IDA is prepared to facilitate the
negotiations and can intervene if nec-
2.1.3.3Tariffs essary. In addition, unbundling of net-
work facilities is also required. IDA has
IDA is responsible for approving tel- issued a Code of Practice to assist with
ecommunication tariffs. There have interconnection issues.
been few changes to national fixed
telephone prices, whose structure is 2.1.3.5Universal service
quite straightforward. There are no
national long distance tariffs, as calls According to the Info-communications
placed and destined within Singapore Development Authority Act of Singa-
7Singapore Case Study
Table 2.2: Licenses
Status at November 2000
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Source: ITU adapted from IDA.
pore Act 1999, IDA is responsible for ice. Exact figures on household tel-
ensuring that telecommunication ephone penetration are not compiled,
services are reasonably accessible to probably because it is assumed that
all people in Singapore, and are sup- almost every family has a phone. A
plied as efficiently and economically statistical calculation based on the
as practicable. It has a number of number of residential telephone lines
tools at its disposal for ensuring this, results in a ratio of over 100 per cent.
such as the right to impose price con- This is due to the growing portion of
trols or obligate public telecommuni- homes with second fixed lines (some
cation licensees to provide basic twenty per cent at March 2000). Mo-
services to anyone in Singapore who bile is also helping to enhance access
requests it. Singapore has achieved a to telephone services. At the end of
high level of universal telephone serv- 1998, over half of Singapores house-
82. Information and Communication Technology markets
holds had a mobile phone. There is a 2.1.4 Network
complete nationwide mobile coverage.
That fact, coupled with the availabil- Singapore has a well-developed domes-
ity of prepaid cards, means that there tic communication network with 27 tele-
is no infrastructure limitation to uni- phone exchanges. The fixed network
versal telecommunication access. has been fully digitalized since 1994.
Figure 2.2: Telephone subscribers
Fixed and mobile telephone subscribers (000s), Singapore
2’500 70%
V
60%
2’000
50%
3
HQ
V 1’500 40%
HW
U
H
E
L
30% UD
U
F
V
1’000 WLR
E
X
20% Q
6 500
10%
0 0%
Mar-98 Mar-99 Mar-00 Jul-00
Fixed lines 1’685 1’778 1’877 1’905
Mobile subscribers 849 1’095 1’631 1’970
Fixed penetration 54.3% 56.2% 58.3% 58.4%
Mobile penetration 27.3% 34.6% 50.7% 60.4%
Source: ITU adapted from IDA.
Figure 2.3: SingTel revenue
SingTel's revenue, 1996-2000, US$ million and distribution of revenue, year ending March 2000
6LQJ7HOWHOHFRPUHYHQXH86PLOOLRQ Posts IT
$3’500 50% 7% 7%
International as % of total
$3’000 Data Equipment
40% Mobile 16% 4%
$2’500
17%
$2’000 30% Other
8% Directory
$1’500 20% National
Internat’l 2%
$1’000 12%
33% Others
10% 7HOHSKRQH
$500 2%
$0 0%
1996 1997 1998 1999 2000 6LQJ7HOUHYHQXHGLVWULEXWLRQ\HDUHQGLQJ
Note: Years ending 31 March. Share of international revenue is based on total revenue.
Source: ITU adapted from SingTel data.
9Singapore Case Study
The Singapore One Network for Every- connect eight Asian economies and be
one (ONE) backbone uses ATM technol- the highest capacity submarine cable
ogy over fibre optic cable at speeds of in the region. The country has three
up to 622 Mbps. The island has five dig- Intelsat satellite earth stations. In ad-
ital mobile cellular networks (two dition, the country launched its own
GSM 900, two GSM 1800 and one satellite, ST-1, in August 1998. Its foot-
CDMA). A significant milestone occurred print covers most of Asia and is one of
in July 2000 when the number of mo- the most powerful in the region.
bile cellular subscribers exceeded fixed
telephone lines. International telecommunication traffic
has always been important for the is-
2.1.5 International service land-state with a trade-oriented
economy. Although revenues from in-
Singapore has over 14000 telephone ternational telephone traffic provide the
circuits with international terrestrial largest proportion of SingTels revenue,
links to Malaysia and submarine cable this share has declined to 34 per cent
and satellite links to the rest of the in 1999 from over 50 per cent in 1993.
world. Investments in regional subma- Yet overall profitability has not been
rine fibre cable systems include SEA- affected due to growing revenue from
ME-WE 3, China-US and Japan-US. other sources such as data and Internet
SingTel and nine other regional telecom services. There were 885 million min-
operators are building a new 2.5 terabits utes of outgoing international telephone
per second optic fibre submarine cable traffic (excluding Malaysia) in the year
to be completed in 2002. When finished, ending 31 March 2000, up six per cent
the Asia-Pacific Cable Network 2 will over the previous period.
Box 2.1: Mobile Internet
The islands three mobile operators have been ac- speed of 38.4 kbps. StarHub launched a GPRS
tively promoting mobile data and Internet access. trial at the end of October 2000.
All provide Short Messaging Service (SMS)a sort
of precursor to mobile Internetincluding sup- The take-up of mobile Internet in Singapore thus
port for Chinese if users have the appropriate far appears to be lukewarm compared to Japans
handset. M1 claims that its users send one mil- popular i-mode service. Hard data about the number
lion SMS messages a day.4 Mobile Internet based of users is difficult to come by. StarHub claimed
on the Wireless Access Protocol (WAP) was initi- more than 10000 WAP users at end Septem-
ated in the first half of 2000. M1 launched its Mi ber 2000 while SingTel Mobile stated it had
World service in February, SingTels e-ideas serv- 20000 Mobile Office customers in early Septem-
ice was commercially introduced in March and ber. There are no published figures for M1 regard-
StarHubs iPower was available from April. The ing mobile Internet customers. IDAs figure for
operators have been busy developing and sign- mobile data services subscriberswhich captures
ing up content providers for their mobile portals. customers of Public Mobile Data licensees but does
Applications include online banking, stock inquir- not include WAP userswas 11700 at September
ies, and news and sports results. 2000. Extrapolating from the available data, there
were less than 50000 mobile Internet users in Sep-
The mobile operators have begun developing tember 2000 or about two per cent of the total
faster mobile Internet services to boost GSMs mobile subscriber base. Resistance to mobile
normal speed of 9.6 kbps. M1s WAP service uti- Internet is related to pricing and handset availabil-
lizes a special platform that provides 14.4 kbps ity. All operators have waived WAP registration and
allowing it to boast of Singapores fastest serv- subscription fees. Usage is charged on a basis of
ice. In December 2000, M1 claimed to be the first ten Singapore cents (5.8 US cents) per minute.
to have launched General Packet Radio Service
(GPRS) roaming. It builds on the worlds first WAP In October 2000, IDA announced the procedure for
roaming service with Hongkong (started in July awarding third generation (3G) mobile licenses.5
2000); roaming subscribers can access the Mi Unexpectedly, it has decided to use an auction sys-
World portal at 36 kbps from Hongkong. Calls are tem to award four licenses. The rationale was that
routed over an IP network to get around interna- an auction is the most objective way of awarding
tional long distance rates. SingTel launched a fast the licenses. The floor price at which the auction
wireless service in September using High Speed will begin has been set at S$ 150 (US$ 86.5) mil-
Circuit Switched Data (HSCSD). This provides a lion. The auction will be held in April 2001.
102. Information and Communication Technology markets
2.2 Information Technology 44 per cent, the second highest in the
Sector Asia-Pacific region (after Australia).
Singapores household computer pen-
Singapore has a vibrant IT sector. The etration stood at 59 per cent in 1999,
electronics industry, including compu- up almost 20 per cent over the previ-
ter equipment manufacturing, is large ous year and translating into the sec-
and the country is a large export base ond highest in the Asia-Pacific region
for major multinational companies after Japan.
such as IBM, Hitachi and Sun. Indeed,
exports of Office Machines (which in- 2.2.2 The Internet market
clude data processing equipment) was
some S$ 41 billion (US$ 23.7 billion) Singapore was one of the first coun-
in 1999, more than a third of the coun- tries in Asia to get an Internet con-
trys total exports. There are around nection. This was the culmination of
93000 people employed in the ICT many years of connectivity experience
sector in the country, growing at 10- with academic networks preceding the
12 per cent a year. Professional and Internet. The pioneering network ini-
industry associations include the Sin- tiatives of the National University of
gapore Computer Society Singapore (NUS) were critical, attest-
and Singapore In- ing to the importance of the academic
formation Technology Federation sector in developing a sustainable
. Internet environment.7 Networking
activities date back to the early 1980s
2.2.1 Computer market when Singaporeans obtained new-to-
market personal computers and set up
There is a large selection of computer Bulletin Board Systems (BBS).8 Some
equipment available in Singapore with of these BBS had daily dial-up con-
many retail outlets. There are even nections to the international FIDOnet
two shopping malls mostly devoted to for exchanging emails and files with
computer products. Prices are reason- users in other countries. In 1987, the
able with a Compaq iPAQ Desktop NUS joined BITNET with the first email
(Pentium III, 500 MHz processor) cost- received from the City University of
ing S$ 1588 (US$ 915) in July 2000, New York in January over a 4800 bps
around US$ 40 less than if purchased link. This was the first Asian link out-
over Compaqs US web site. side of Japan to the BITNET and is
cited as a milestone in Singapores
According to IDC, some 427000 per- early Internet lead over other coun-
sonal computers were sold in Singa- tries. Another first took place in Au-
pore in 1999, an increase of almost gust 1990 when a 64kpbs Internet link
30 per cent over the previous year.6 was established between NUS and
It is estimated that there are around Princeton University in the United
1.7 million PCs in use on the island, States. This was the first Internet site
resulting in a penetration rate of in Singapore and the Southeast Asian
Table 2.3: Singapore PC Market
PC sold (000s) 370 332 427
Estimated PC base (000s) 1’244 1’450 1’703
PCs per 100 people 33.3% 37.5% 43.7%
Percent households with PC 35.8% 41.0% 58.9%
Note: Estimated base derived from sales data.
Source: ITU adapted from IDC, IDA and national statistics.
11Singapore Case Study
region. Full Internet connectivity for years after that. The license fee is one
NUS was officially launched in April per cent of annual gross turnover. In
1991. Other regional firsts for NUS addition, ISPs are automatically
include the first Gopher server in 1992 granted a class license by SBA, which
and the first World Wide Web server covers content issues; they are sup-
in 1993. posed to register with SBA within 14
days after commencing service.
In 1992, TechNet was established to
provide Internet connectivity for the IDA has been publishing Internet dial-
islands R&D community, extending up subscriber figures since January
access beyond NUS. Technet was later 1997. At June 2000, IDA reported 1.8
commercialized and became Singa- million dial-up subscribers, resulting
pores second ISP known as Pacific in a penetration rate of 54.2 per cent.
Internet. SingTel launched public The number of subscribers rose sub-
Internet services in July 1994 through stantially from December 1999 to
its SingNet subsidiary. These two ISPs March 2000, since the launching of
were joined by the then Cyberway, free ISP service by StarHub in Decem-
which launched service in March 1996. ber 1999. This was followed by
These three were the only companies SingNet which provides each of its
allowed to provide Internet service telephone subscribers with a free
until October 1998 when the ISP mar- Internet account via its mysingtel por-
ket was opened. By June 2000, there tal. In addition SingNet has waived
were 18 licensed ISPs in Singapore dial-up telephone usage charges for
(see Table 2.4) although the original its Internet clients that subscribe to a
three retain the bulk of the consumer monthly package. Growth has been
dial-up market with most of the new- flat since March 2000, with the
comers either serving niche corporate number of Internet subscribers
markets9 or not yet in operation. roughly equivalent to the number of
telephone lines.
ISPs are granted a license by IDA. The
license is valid for a period of three As a result of free access, figures for
years, renewable for another three Internet subscribers are a bit mislead-
Figure 2.4. Internet subscribers in Singapore
Estimated number of Internet users, 1996-1999
,QWHUQHWVXEVFULEHUV V ,QWHUQHWXVHUV V 43.4%
2’000 60% x % Per cent of population 36.1% 55.2%
1’800 x % Per cent of population 15+ 46.0%
1’600 50% 1’743
Per cent of population
1’400 24.4% 1’451
40%
1’200 19.6% 31.4%
14.2% 25.3%
1’000 30%
18.1% 951
800 765
600 20%
570
400 10%
200
0 0% Nielsen IDA (6/99) SCV NetValue Nielsen
Jan-97 Dec-97Dec-98Dec-99 Jan-00 Jun-00 (6/00) (12/99) (9/00) (6/00)
Note: Left chart: Free Internet access was introduced in December 1999. Right chart: Figure in paren-
thesis refers to date of survey. The smaller Nielsen figure refers to home users accessing Internet in the
last month. IDA refers to their household IT survey. SCV refers to Singapore Cable Vision survey provided
to author. NetValue data is derived from percentage of 15+ Internet users. The larger Nielsen figure
refers to the total Internet universe.
Source: ITU adapted from IDA, Nielsen, SCV and NetValue data.
122. Information and Communication Technology markets
Table 2.4: ISPs in Singapore
Licensed ISPs, June 2000
,63 :HEVLWH
1HW6LQJDSRUH KWWS ZZZQHWFRPVJ
2 AT&T Worldwide Telecommunications Services
3 Cable & Wireless Network Services (Singapore)
&LUFOH'RW&RP 6
&RQFHUW*OREDO1HWZRUN 6
'DWDRQH $VLD KWWS ZZZGDWDRQHFRP
(TXDQW6LQJDSRUH
*OREDO2QH&RPPXQLFDWLRQV
/*$7HOHFRP
/RUDO&\EHUVWDU,QWHUQDWLRQDO,QF
3DFLILF,QWHUQHW KWWS ZZZSDFIXVLRQFRPVJ
6LQJDSRUH7HOHFRPPXQLFDWLRQ KWWS P\VLQJQHWFRPVJ
6WDU+XE,QWHUQHW KWWS ZZZVWDUKXEQHWVJ
6WWFRP KWWS ZZZVWWFRPVJ
6ZLIWHFK$XWRPDWLRQ KWWS ZZZVZLIWHFKQHWVJ
70,7HOHPHGLD,QWHUQDWLRQDO+RQN.RQJ
881(76LQJDSRUH KWWS ZZZXXQHWVJ
:LQVWDU&RPPXQLFDWLRQV6LQJDSRUH
Note: These are licensed ISPs and not necessarily in operation.
Source: ITU adapted from IDA.
ing. Singapore is one of the rare coun- ONE.13 The network is based on Asyn-
tries where the number of regular chronous Transfer Mode (ATM) switch-
Internet users is less than the number ing technology with fibre optic
of subscribers. A number of recent transmission speeds at up to
surveys provide differing figures on 622 Mbps.
Internet use on the island (see Fig-
ure 2.4). A 1999 survey provided by Broadband local access is available
SCV based on a sample of 4200 peo- through two services. The first is ca-
ple states that roughly one third ble modem access provided by Sin-
(32.4%) of the population used the gapore Cable Vision. The second is
Internet. A March 2000 survey put the SingNets ADSL Magix service. Over
active Internet universe at 99 per cent of the islands households
404000 users (10 per cent of popu- are passed by broadband infrastruc-
lation).10 Yet another study, released ture and there were 250000 users in
in September 2000, stated that Sin- September 2000.14
gapore had the highest Internet pen-
etration in Asia with 46 per cent of Singapores international Internet con-
the population older than 15 access- nectivity is, on a per capita basis, one
ing the Internet in the past month.11 of the highest in the world thanks to
SingTels Internet Exchange (STIX).15
Singapores high level of Internet de- It is connected to over 30 countries
velopment is reflected by its active with some 800 Mbps of bandwidth.
promotion of high speed Internet ac-
cess through the nationwide 2.3 Mass media
broadband Singapore ONE network.
Singapore ONE is a government-led There is a high level of technology
initiative to develop broadband infra- adoption by Singapores mass media.
structure and services.12 1-Net pro- This includes not only the Internet but
vides the infrastructure for Singapore also other advanced broadcasting
13Singapore Case Study
technology such as Digital Audio aided by the perception that Singa-
Broadcasting (DAB) and Digital Televi- pores media is more objectivepar-
sion (DTV). Virtually all of Singapores ticularly for Chinese language
newspapers and radio and television reportingthan other regional media.
stations have web sites. Many have Despite the variety of newspapers and
gone further by building portals, de- broadcast stations, they are all owned
veloping content or providing audio by two companies. The country has
and video streaming. Singapores rela- recently partly liberalized the media
tively small market size encourages sector by notably allowing the lead-
media companies to develop Internet ing printed media company to get into
properties with regional pull. This is broadcasting and vice versa.
Box 2.2: From printed newspapers to online ones
AsiaOne , a Singapore Press with more than 200 cyber stores) and voice serv-
Holdings (SPH) dot-com spin-off, illustrates how ices. A successful business model has been to
Singaporean media companies are embracing the bring news online before it comes out in print.
Internet. It originated within SPH as a multimedia AsiaOne also provides free email accounts and
division and was listed in June 2000 when 13 per sends out breaking news to subscribers. These
cent of its shares were sold to the public. AsiaOne methods keep users sticky to the site. AsiaOne
hosts the online version of SPHs seven newspaper has also reached out to mobile users through a
editions. It also has content on various subjects WAP service that provides news headlines and
such as women, health, careers, travel, food, auc- restaurant listings.
tions, investment, and IT.. Other services include
call centre support for horoscopes, sports results, AsiaOne has a daily average Page View of three
and polling over the telephone. and ranks second in terms of time spent on
Singaporean sites with an average 28 minutes per
The main source of AsiaOnes revenue is online session. AsiaOne also operates Zaobao Online, the
advertising. It believes this will grow due to in- Internet version of Singapores leading Chinese
creasing Internet usage and liberalization of the newspaper. Zaobao is a Chinese language portal
Singaporean media market, which will attract that packages the news content of Lianhe Zaobao
more advertizers. Other sources of AsiaOne rev- and overseas Chinese newspapers with a host of
enue include e-commerce transaction services web features and services aimed at Chinese-speak-
(being one of the largest online shopping malls ing audiences around the world.
Box Table 2.2: Singapores top web sites
Ranked by time spent per person, July 2000
Property Unique audience Reach % Time per person
1. MSN 238,014 43.38 0: 42: 33
2. AsiaOne 80,652 14.70 0: 28: 50
3. Yahoo! 278,629 50.78 0: 26: 26
4. Pacific Internet 158,823 28.94 0: 12: 51
5. Singapore Telecom 217,377 39.62 0: 11: 57
6. Lycos 131,304 23.93 0: 09: 02
7. Excite@Home 66,351 12.09 0: 08: 31
8. AOL Websites 146,486 26.70 0: 07: 07
9. AltaVista 81,404 14.84 0: 06: 56
10. Microsoft 107,175 19.53 0: 04: 23
Note: The data only cover home Internet users.
Source: Nielsen//NetRatings.
142. Information and Communication Technology markets
2.3.1 Print are TCS5, TCS8, Suria, Central,
There are eleven local daily papers Sportscity, and Channel NewsAsia.
six English, three Chinese and one Singapores largest terrestrial broad-
each in Malay and Tamil. There are caster, Television Corporations of Sin-
also about 190 foreign newspapers gapore (TCS), now known as
and more than 5000 foreign maga- MediaCorp TV, owns and manages the
zines available in Singapore. Daily cir- entertainment channels, Channel 5,
culation for the local papers is over Channel 8, Sportscity, and the Malay
one million with the English language entertainment and information chan-
papers accounting for more than half. nel, Suria, as well as the one special-
Seven of the papers are on the web, ized in programs for and on children,
made easier by the fact that they are Indian- and arts communities, Cen-
all published by Singapore Press Hold- tral. Channel 5 and 8 offer viewers
ings (SPH) (see Box 2.2).16 round-the-clock quality English and
Mandarin mass entertainment and in-
2.3.2 Broadcasting formation programs respectively.
Sportscity offers sports fans sporting
Singapore has a diverse broadcast
action from around the world.
scene, despite the fact that it has tra-
MediaCrop News owns and manages
ditionally been government-owned. In
Channel NewsAsia (CAN). CAN pro-
1994, the Singapore Broadcasting
vides timely news and information on
Corporation was corporatized as the
global developments with a unique
Singapore International Media Group
Asian perspective. In September 2000
(SIM) whose subsidiaries include all
MediaCorp News launched its second
the leading broadcasters: Radio Cor-
feed, Channel NewsAsia (Interna-
poration of Singapore (known as
tional), to cater to viewers outside
MediaCorp Radio), Television Corpo-
Singapore. MediaCorp TV also owns
ration of Singapore and Singapore
TVMobile, Singapores first outdoor
Television Twelve. SIM underwent a
digital television channel, and
restructuring in 1999 and has been
MDigital, which promises viewers the
renamed Media Corporation of Singa-
interactive television experience of the
pore.
future.18 In July 2000, the government
announced that is was prepared to
2.3.2.1Radio
grant SPH licenses to run up to two
There are 18 FM radio stations on the free-to-air TV and two radio channels.
island of which twelve belong to Ra- Shortly after, SPH MediaWorks was
dio Corporation of Singapore (RCS).17 formed and announced that it would
RCS, now known as MediaCorp Radio, start its commercial TV channels, TV
broadcasts in four languages, reach- Works and Channel U, by May 2001.
ing about 2.5 million listeners a week.
All RCSs stations are on Internet via Singapore has a license fee system
its main web page (http:// whereby all television set owners are
radio.mediacorpsingapore.com/). required to pay an annual charge. Li-
cense fees generated S$ 92 million
The Internet has provided a way for (US$ 53 million) for SBA during its
new stations to overcome scarce FM 1999/2000 fiscal year, accounting for
frequency by developing web sites 88 per cent of revenue. Ironically, de-
with audio broadcasts. For example, spite a ban against chewing gum and
UTV Entertainment has webcasts with six video and around 20 per cent of Singapores
two audio-on-demand channels over households are evading license fees.
the broadband Singapore One net- Though television penetration is felt
work. MediaCorp Radio also operates to be near universal, SBA had issued
20 NetRadio channels at http:// around 759000 licenses at Decem-
radioeastwest.com. ber 2000, accounting for about 90 per
cent of the households in the country.
2.3.2.2Television
There are currently six free-to-air tel- Singapore Cable Vision (SCV) was li-
evision stations on the island. They censed in June 1995 as the monopoly
15Singapore Case Study
Table 2.5 Mass media indicators
,QGLFDWRU 9DOXH 6RXUFH
Daily newspaper circulation 1,068,942 1999. Statistics Singapore.
Per 1’000 inhabitants 275
Television licenses 715’000 At 31/3/99. SBA
Households with license 80% 891’000 households per SBA at 31/3/99
Cable TV subscribers 207’000 1999. Statistics Singapore
Source: ITU adapted from Sources shown.
provider of cable television services depending on the package chosen.
on the island.19 It was required to ca- There were some 255000 Cable TV
ble all homes on the island by Janu- subscribers by December 2000 or
ary 1, 2000. The S$ 600 million around one quarter of all homes.
(US$ 346) hybrid fibre-coaxial net-
work was completed three months After three years of trial, SCV com-
early in September 1999.20 By March mercially launched its cable modem
1999, more than 820000 homes, or service in December 1999. There were
92 per cent of all Singaporean house- some 37000 cable modem subscrib-
holds had been cabled. SCV has a ers in December 2000. The connec-
number of subscription packages. The tion charge is S$ 51.50 (US$ 30) and
entry package, the Basic Tier, costs the monthly fee is S$ 76 (US$ 44). It
S$ 33.94 (US$ 20) per month and in- is S$ 66 (US$ 38) for existing cable
cludes free channels like the six local TV subscribers.
terrestrial stations, two Malaysian
ones and SCVs Preview Channel. Up There is currently a ban on Direct-To-
to 40 additional channels are available Home (DTH) satellite reception.
162. Information and Communication Technology markets
1
The compensation is based on the estimated loss of earnings from competition. SingTel was compensated
S$ 859 (US$ 495) million and StarHub S$ 1082 million (US$ 623000) for moving forward the date of full
competition from 1 April 2002 to 1 April 2000. See IDA. IDA Announces Compensation to SingTel and
StarHub. IDA Media Release. 11 September 2000.
2
Temasek also owns a Special Share which ensures that no major changes can be made to SingTel without its
prior written approval. Temaseks web site is http://www.temasekholdings.com.sg
3
IDAs licensing and regulatory powers are granted under the 1999 Telecommunications Act.
4
M1. M1 SMS to rival networks now free. Press Release. 26 June 2000.
5
IDA. IDA Announces 3G Licensing Framework. Press Release. 20 October 2000.
6
IDC. Asian PC Market Surges to Over 14.1 Million Units in 1999, Says IDC. Press Release.
14 February 2000. http://www.idc.com.sg/Press/releases/PR-AP-PC_99.htm.
7
Overcoming a sense of isolation has been put forth as a prime reason for the keen interest of Singapores
academic community to establish international computer connections.
8
Much of the history of the Internet in Singapore in this section is based on Bernard Tan. Origins of the
Internet in Singapore (Part 1). envision (Singapore Broadcasting Authority). January-March 2000 as well as
a forthcoming draft of Part 2 provided to us by Dr. Tan.
9
For example a number of the newly licensed ISPs such as Equant are global ISPs; their Singaporean
operations are targetted at their global customers (many of which have their regional headquarters in
Singapore). Others, such as DataOne, target the business community by providing value-added services in
addition to plain ISP.
10
See Nielsen/NetRatings. Nielsen//NetRatings Announces First-Ever Multi-Country Internet Audience
Measurement Results. Press Release. 4 May 2000.
11 NetValue. Asian Internet Users Come Out of the Closet. Press Release. 4 September 2000.
www.netvalue.com/corp/presse/cp0013.htm
12
http://www.s-one.gov.sg/mainmenu.html.
13
1-Nets web site is: http://www.1-net.com.sg/index.cfm. A network diagram is available at
http://www.1-net.com.sg/images/aboutus/s-one/Network.gif and a schematic of the types of services is
available at http://www.1-net.com.sg/images/aboutus/s-one/s1apps.gif. In September 2000, IDA announced
that 1-Nets shareholders would sell their holdings to MediaCorp. See IDA. Industry Players Divest 1-Net
shares to Mediacorp. Media Release. 27 September 2000.
14
IDA. Singapore One Reaches a Quarter of a Million Users. Media Release. 18 September 2000.
15
http://www.ix.singtel.com/services4.html.
16
http://www.sph.com.sg.
17
The AM radio frequency is not used.
18
MediaCorp TVs web site addresss is http://tv.mediacorpsingapore.com.
19
SCVs owners are Media Corporation of Singapore (41.3%), ST Telecommunications (32%), and Singapore
Press Holdings (26.7%) and its web site is (www.scv.com.sg).
20
Technically, all residential estates have access to cable television. This includes all Housing Development
Board homes which make up 85 per cent of all homes in Singapore. See Vivien Chiong. Broadband your
future. Envision (Publication of Singapore Broadcasting Authority). October-December 1999.
17Singapore Case Study
3. Internet policy
3.1 Role of incumbent ISPs.4 Another reason is that though
telecom operator SingTel has made the lions share of
investment in national and interna-
SingTel, the incumbent telecom opera- tional Internet connectivity, it has thus
tor, is deeply involved in the Internet. far peered with other national ISPs.
1
Activities range from Internet serv-
ice provision to one of the most ex- 3.2 Pricing
tensive international Internet
backbones in the world. 2 SingNet, There are a range of Internet dial-up
SingTels Internet subsidiary was the plans in Singapore. They revolve
countrys first commercial ISP, launch- around three models:
ing service in July 1994. This early
start has given it an advantage as to- · Free Internet access but sub-
day it has the largest base of paying scriber pays for telephone usage
dial-up subscribers. Another advan- charges - S$ 0.84 (US$ 0.48) per
tage is SingTels fixed telephone net- hour peak, that is 8am to 6pm
work; in December 1999 it announced weekdays - and S$ 0.42
that it would provide free Internet and (US$ 0.24) per hour off peak;
e-mail accounts to all telephone sub-
scribers.3 SingTel benefits from dial- · Monthly Internet access fee for
up Internet traffic since users have to a certain number of hours of use
pay local telephone charges. It has an with no telephone usage charges;
agreement with StarHub to share tel- and
ephone usage charges for the latters
free Internet access service. There is · Monthly Internet access fee plus
remarkably little rancour among other telephone usage charges.
ISPs despite SingTels advantages.
One reason is that SingTel has agreed The free Internet plan generally works
to provide unbundled access to other out the cheapest so it is unclear why
anyone would opt for a
paid subscription unless
Figure 3.1: Who is the cheapest? they are really heavy
users.5 A price compari-
Dial-up Internet access charges including telephone son among Asia-Pacific
usage charges, selected countries, June 2000, US$ countries for 30 hours
per month of Internet
35 ,QWHUQHWDFFHVVFKDUJHVKRXUV86-XQH access is shown in Fig-
ure 3.1. At 30 hours of
30 use, Singapore has the
25 lowest dial-up charges
compared to selected
20 7HOHSKRQH
ISPs in the Asia-Pacific
15 ,63 region (Figure 3.1).6
10 Broadband access serv-
5 ices available in Singapore
include conventional
0 leased lines, Integrated
Australia Indonesia Malaysia N. Zealand Singapore
Services Digital Network
(ISDN), Asymmetric
Source: ITU adapted from Sources shown. Digital Subscriber Line
(ADSL), and cable mo-
183. Internet policy
Table 3.1: Internet access prices
Dial-up Internet access charges for 30 hours of use per month, Singapore, June 2000,
Singapore Dollars, not including tax
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SKRQH
)UHHRIISHDN
)UHHDYHUDJH
6LQJ1HW 3ODQ,,
)UHHSHDN
3DFLILF (DV\$FFHVV
3OXV
3DFLILF 8QOLPLWHG
6WDU+XE 8QOLPLWHG
6LQJ1HW 3ODQ,
3DFLILF (DV\$FFHVV
6LQJ1HW 3ODQ/LWH6XUI
3DFLILF 6XUI16DYH
Note: 1/ Connection fee for signing up with the service. 2/ Monthly fee for subscription-based packages. 3/ The
number of free hours included for subscription-based packages. 4/ Amount to pay for exceeding free hours.
5/
The monthly ISP fee plus extra hour fee if applicable. 6/ Telephone usage charges where applicable (S$ 0.84
(US$ 0.48)) per hour peak - 8am to 6pm weekdays - and S$ 0.42 (US$ 0.24) per hour off peak). For
subscription-based packages, an average of S$ 0.63 (US$ 0.36) per hour has been used. 7/ StarHub and
SingTel offer free Internet access (telephone charges are applicable). The joining fee for StarHub is S$ 29.95
(US$ 17). 8/ Free Internet access based on off-peak telephone usage. 9/ Free Internet access based on aver-
age of peak and off-peak (15 hours each) telephone usage. 10/ Free Internet access based on peak-rate
telephone usage. 11/ Unlimited usage.
Source: ITU adapted from ISP data.
dem. ADSL and cable modem are be- plan is more appropriate for those
ing promoted as consumer broadband engaged in general web surfing.
access services in Singapore. They are SingNet is also exploring unlimited
cheaper than conventional offerings access to local sites arguing that an
such as leased lines or ISDN but on a unrestricted flat rate package is not
strict per price comparison, more ex- feasible due to the high cost of inter-
pensive than dial-up Internet access. national Internet connectivity.
Cable modem access is a better value
(e.g., unlimited use) and more com- In November 2000, IDA announced
parable to international pricing than that in February 2001 it would auc-
ADSL (see Table 3.2). 7 In November tion five lots of spectrum for Fixed
2000 SingNet introduced flat rate, Wireless Broadband (FWB) as yet an-
volume-based packages for ADSL. other alternative to high speed
These packages allow unlimited use Internet access. Most FWB technology
up to between 250 1000 Megabytes. is based on Local Multi-point Distri-
After those limits have been passed, bution Services (LMDS) that theoreti-
users are charged S$ 2.95 (US$ 1.7) cally can provide speeds of up to
per ten Megabytes. SingNet states 155 Mbps. In January 2001, IDA an-
that the time-based package is more nounced a delay in the auction until
suitable for those downloading multi- after May based on input from poten-
media files while the volume-based tial bidders who stated they needed
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