TELEPHONE SERVICE (Impact and cost to residential customers)

Dr Wang Kai Yuen asked the Minister for Communications and Information what will be the impact on telephone service and the cost of that service to residential customers over the next 5 years as a result of the recent reorganization of the Tele-communication Authority of Singapore.

The Minister for Communications and Information (Dr Yeo Ning Hong): Sir, the objective of restructuring Telecoms is to further improve its efficiency and its productivity, and to make the organization more responsive to the needs of its customers. Currently, Telecoms provides a service that is comparable to the best in the world by way of pricing, range of products and services and the sophistication of those products and services. For example, with pricing. In calls to countries all over the world, it is cheaper in a very large number of cases to make the call from Singapore to the other country than to have the call made the other way round. Sir, with your permission, I will ask the Clerk to circulate a short list (Cols. 715 - 716) of some of the rates that Singapore Telecoms charges and compare them with the rates for incoming calls. [Copies of Table circulated to Members.] Sir, the list shows that in a large number of cases, the rates charged by Singapore are much lower. In some cases, Telecoms' rates can be as low as half the rate for the incoming calls. list - SINGAPORE IDD RATES VS. CORRESPONDING INCOMING RATES (Cols. 715 - 716)

Telecoms' pricing philosophy is simple - to provide the best possible service at the lowest possible cost, subject to full recovery of the services provided. With increased efficiency and productivity resulting from this restructuring, we can keep the operation costs down and savings made can then be passed on to the consumers, as had been done over the last 10 years.

Dr Wang Kai Yuen (Bukit Timah): Sir, is the residential service to the consumers currently being subsidized? Would the reorganization not give Singapore Telecom an exact measure of that subsidy, if it exists?

Dr Yeo Ning Hong: Sir, it is not possible to say whether the local services are being subsidized by the international services, because of the overlap in the use of the infrastructure provided. For example, the same network of lines between homes in Singapore is also used for calls from those homes to countries overseas. So it is not possible under our present practice to have a clear partition of all cost factors. These costs are partitioned in a manner that is generally acceptable internationally.