Singapore Government Press Release

Media Division, Ministry of Information and The Arts

36th Storey, PSA Building, 460 Alexandra Road, Singapore 119963.

Tel: 3757794/5

___________________________________________________

As part of its efforts to further liberalise the telecommunication industry in Singapore, the Telecommunication Authority of Singapore (TAS) conducted a tender exercise in Aug 97 to license up to two more Public Basic Telephone Service (PBTS) operators. A separate tender was also called in Oct 97 to license up to two more Public Cellular Mobile Telephone Service (PCMTS) operators.

A Tender Evaluation Committee (TEC) comprising members from the TAS Board of Directors and representatives from the Ministries of Communications, Finance and Trade and Industry, was convened to evaluate the two tenders based on a set of criteria that was specified in the tender document. (Annex 1 and Annex 2). The TEC has completed its evaluation of the tender bids and has made its recommendations to the Government. The Government has accepted their recommendations. I am pleased to announce the successful tenderers for the two licences (Annex 3). They will have a 2-year lead time to rollout their network and deploy the facilities before launching commercial services from 1 April 2000.

At the close of the tender on 31 Dec 97, three consortia had submitted bids for the PBTS tender, namely; StarHub (STT, SingPower, BT and NTT), DirectLine (Sembawang Corportion, SMRT and Worldcom) and TelcomOne (Keppel Telecoms, SPH, C&W and HKTel). StarHub was ranked ahead of the other two consortia TelcomOne and Directline, primarily due to its aggressive rollout plans for an extensive fibre network to homes, offices and other buildings by year 2002. StarHub also offered a comprehensive range of services at competitive prices and higher quality of service standards.

TAS had earlier stated that the decision to award one or two licences would depend on the quality and attractiveness of the tenderers’ submissions. The actual number of licences to be awarded was not pre-determined. It was left to the market. The tenderers were specifically asked to provide their business cases under a one-licence as well as a two-licence scenario. Based on the tenderers’ projected business cases, the Government was of the view that the poor internal rate of return and net present value under a two-licence scenario would adversely affect the viability of the new operators. Our primary focus in this current tender is to select the best facilities-based operator(s) who is willing to put in place the infrastructure and networks that can meet the present as well as future needs and demands of industry and users. This will pave the way for effective value-added services-based competition after year 2002. The Government has therefore decided to award only one additional PBTS licence and this license will be issued to StarHub.

For the PCMTS tender which also closed on 31 Dec 97, two submissions were received from StarHub and P2P (NatSteel, Teledata and GTE). Both P2P and StarHub presented themselves as strong competitors, and each proposed a comprehensive suite of customer-oriented services supported by an extensive feature-rich network. It was also evident from both tenderers’ market assessment that the mobile-phone market could support four highly competitive and innovative PCMTS operators. Given the continued strong demand for wireless communications and considering market experiences and developments in other countries, the Government has decided to award two more PCMTS licences. Both StarHub and P2P will be licensed.

We have seen the benefits of competition and the dynamic market forces at play with the introduction of one additional mobile phone provider and three additional paging operators in Apr 97. Both mobile phone and paging operators have competed aggressively to win customers and capture market share. The objective of further liberalising our telecommunication industry is to enable Singapore to fully reap the benefits of sustainable and effective competition. Ultimately, the consumers will enjoy the greatest benefits - a wide range of high quality services at competitive prices.

With the addition of one more PBTS and two PCMTS operators come 1 April 2000, I believe that the Singapore telecommunication market will continue to enjoy strong and healthy growth. Consumers can expect greater market competition, service innovation, price competitiveness and better quality of service standards. I am confident that the new PBTS and PCMTS entrants will contribute greatly to the advancement and development of Singapore’s information-communications infrastructure and services and benefit end-users and the economy.

1. Annex 1

Prof Wee Chow Hou TAS Board Member

Mr Colm Martin McCarthy TAS Board Member

Mr Stephen Yeo TAS Board Member

Mr Leong Keng Thai DG, TAS

Mr Loh Khum Yean Ministry of Trade & Industry

Mr Pek Beng Choon Ministry of Finance

Mr Tan Keng Hiang Ministry of Communications

1. Annex 2

1. Page 1 of 2

1. Annex 2

1. Page 2 of 2

1. Annex 3

StarHub ST Telecommunications Pte Ltd

P2P Communications Natsteel

Teledata

GTE Corp

StarHub Singapore Power Ltd

ST Telecommunications Pte Ltd

- end -