INTRODUCING COMPETITIONS IN SINGAPORE'S TELECOMMUNICATIONS MARKET : MOBILE PHONE AND PAGING SERVICES

Abstract

The introduction of competition achieved by liberalizing and deregulating the telecommunications services market has become a worldwide phenomenon. Being in the world where technological changes and advancements are taking place rapidly and continuously, Singapore has to keep pace with the global trend to enhance her economic status. Thus, since the late 1980s, the Telecommunications Authority of Singapore (TAS) has adopted a progressive approach towards liberalizing this industry. As part of its approach to introduce full competition at a phased and sustainable pace, the mobile communications services market entered a new era when this market was opened to competition on 1 April 1997. This academic exercise aims to examine the issues related to the introduction of competition in Singapore's mobile phone and paging services markets. Firstly, this exercise discusses several unique features of the government's decision to liberalize and deregulate the telecommunications industry in Singapore. It is found that unlike other countries, its decision to privatize this market was intended to widen the scope of the local stock market. Although this move would eventually pave the way for the emergence of full competition, the issues related to efficiency, financial stability and profitable were not its main concern. However, TAS realized that the only way to keep up with the cutting edge of the technology in this dynamic world was to introduce competition. The study also examines the regulatory framework formulated by TAS in guiding the transition from a monopolistic to a highly competitive market. As this market is gradually liberalized, the basic role of TAS has changed from a sole service provider to a crucial and pivotal role as regulator, facilitator, promoter and arbitrator so as to maximize the benefits of competition. Last but not least, this exercise also attempts to study the competitive strategies undertaken by the various operators m the mobile phone and paging services markets. It is found that the emergence of competition (i.e. the transition from a monopolistic to an oligopolistic market) would drive down the usage rates and increase the penetration rates in these markets. Although it was inevitable that competition would place downward pressure on prices, a full-scale price war might not have occurred in these markets. Furthermore, these operators were expected to provide more innovative and valued added services. In fact, the players did not merely compete on price alone, they also adopted a blend of non-competitive strategies such as the provision of quality services, and the enhancement of technological development and promotion tools to enlarge their market shares. Overall, TAS has taken the right path in restructuring the telecommunications industry to boost Singapore's position as an international business hub. It has introduced competition in a phased and sustainable pace to keep up with the advancements of technology and innovative services at the most competitive prices. In addition, TAS has to set and maintain a clear and stable regulatory framework to ensure a smooth transition towards full competition in the year 2000. Likewise, the service operators are expected to be more innovative in the provisions of the valued added services in an attempt to differentiate their products and create a niche in the market.