TELECOMMUNICATION AUTHORITY OF SINGAPORE BILL

Order for Second Reading read.

The Minister for Communications (Mr Mah Bow Tan): Sir, I beg to move, "That the Bill be now read a Second time."

Sir, Government first announced its intention to privatise some of its statutory boards in 1987. Since then, many careful steps have been taken to bring about the privatisation of the first statutory board under this programme, namely the Telecommunication Authority of Singapore (TAS). In 1988, TAS commissioned an accounting firm to study the feasibility of privatisation. The findings indicated that it was feasible and that there were clear advantages for doing so. In 1989, the Government gave its in-principle approval to TAS to proceed with its privatisation plans. Members of this House will recall that this issue was also debated in the Committee of Supply in 1990. Today, we are ready to take another step, a major step, towards reaching our goal. The Bill before this House seeks to reconstitute the TAS and to allow the privatisation of its commercial divisions, which currently operate under the name of Singapore Telecom.

First of all, allow me to explain once again the reasons for privatising TAS.

Many people would agree that Singapore Telecom is a highly efficient and well-run organisation. This is borne out by independent surveys which are conducted locally as well as internationally. Singapore Telecom has provided Singapore with a world-class telecommunication infrastructure, at rates which are among the lowest in the world. It is financially well managed and it contributes handsomely to Consolidated Revenue. In fact, it has none of the characteristics which have prompted other telecommunication authorities to privatise. So the question inevitably arises, why are we doing it?

Sir, there are two main reasons. The first is to allow Singapore Telecom greater flexibility to operate as well as to compete globally. The telecommunication industry today is truly a global industry. Driven by technology, and fuelled by economic development worldwide, it is changing and changing rapidly. New challenges and new opportunities present themselves and Singapore Telecom must be in a position to meet the challenges and to seize the opportunities.

For example, Singapore Telecom current ly derives a major proportion of its turnover from its International Telephone Service. Although this is still growing, the growth from this service has slowed down considerably. In 1988/89, this accounted for around 28% of growth. In l990/91, the growth has come down to around 10%. International telephone tariffs are being driven down by competition. Telephone companies, whether they are in North America, Europe, Australia, New Zealand, or even those nearer home, are all going global. Singapore Telecom must be given this flexibility to move fast to meet these challenges.

At the same time, the liberalisation of the telecommunication industry worldwide has presented new investment opportunities. But the window for these opportunities is limited and the players are many. A privatised Singapore Telecom will have the nimbleness to move quickly to seize these opportunities.

Sir, the second important reason for privatising Singapore Telecom is to provide an opportunity for Singaporeans to own quality stocks in a good local company. Singapore Telecom is a national asset. It is an organisation that has been built up over the years by many Singaporeans. Its success is also Singapore's success. Privatising Singapore Telecom is a way for Government to transfer part ownership of Telecom to the people. It allows Singaporeans to own part of this national asset and to share in its growth and its success in the future.

It will be a quality stock, bar none. It has a track record that is the envy of many. Its income and operating surplus grew by 11% per year and 28% per year respectively over the last five years. The listing and flotation of Singapore Telecom on the local stock exchange will provide an opportunity for many Singaporeans to participate in the progress of a well-run local company.

Sir, I would like now to address two important concerns that the public have expressed concerning this privatisation exercise.

The first concern is a lingering apprehension that privatisation will mean higher rates, and the second is a concern that the exercise will in the end benefit foreigners at the expense of Singaporeans.

Let me address the first concern. The Bill before us provides for the current TAS to continue as a reconstituted statutory board with enhanced regulatory powers and functions.

TAS, the statutory board, will license Singapore Telecom, the company, to operate and provide telecommunication and postal services. It will impose certain conditions. Firstly, there will be a Universal Service Obligation. What this means is, for example, that Singapore Telecom must continue to provide basic telephone services to anyone in Singapore who requests for such services, either in their homes or in their offices. Secondly, Telecom will be obliged to charge reasonable rates and provide a level of service that will be spelt out by TAS, the regulator.

There is really no need to fear that domestic telephone rates, for example, will suddenly go up as a result of privatisation. This does not mean, however, that the rates will never go up. But if and when they do, they must, and they will, be properly justified.

TAS, in its capacity as a regulator, will function somewhat like the Public Transport Council. It will ensure an orderly development of the future telecommunication industry in Singapore.

In the medium term, TAS together with my Ministry will work out a policy which will aim at increasing consumer choice and stimulating both greater efficiency in the use of resources as well as encouraging growth and innovations. Government will take steps to further liberalise the telecommunication sector in Singapore. Today, for example, the Customer Premises Equipment, things like telephone sets, pagers, fax machines, private automatic branch exchange (PABX), and so on, are already fully liberalised. More liberalisation will be introduced in stages in selective areas, for example, in the area of Value-Added Networks (VANs).

In introducing competition in the telecommunication industry, Government will ensure that the interests of the public are protected. Decisions on this will only be taken after careful consideration. Better consumer choice will be weighed against the added cost arising from possible duplication of services and facilities. The small size of Singapore's domestic market and the need to optimise the use of valuable resources, land is one such valuable resource, and in the case of telecommunication, radio frequency spectrum, for example, could be considered as another valuable resource, are factors that must be taken into account. Also, Singapore Telecom will be given sufficient time to adjust to more competition in the domestic market. In the provision of basic telephone services, competition must take place on a fair basis. In other words, competitors must take the good with the bad. These are the broad principles. My Ministry will announce the details in due course.

Sir, the second public concern is really whether by privatising Singapore Telecom, Government will be benefitting foreigners more than Singaporeans. Here, I would like to repeat the Prime Minister's assurance that when Singapore Telecom is privatised, all Singaporeans will be given an opportunity to share in the success of the company. As I have mentioned, Singapore Telecom is a national asset. This is a tangible way to reward our citizens who have contributed to the wealth of our nation.

It is Government's intention that when we sell the shares of Singapore Telecom, Singaporeans who are CPF account holders, will be allocated shares at an attractive price. My Ministry is working with the CPF Board to study how we can make it possible for as many Singaporeans as possible to own shares in the company. It will be a blue chip stock, a growth stock that is worth holding on to. So Government will encourage Singaporeans to hold on to these shares for a longer period. Suitable incentives will be incorporated in the scheme for this purpose.

Telecom shares will also be sold to foreign investors. This is important. If we want Singapore Telecom to be a global player in the telecommunication industry, we must allow for foreign ownership. It will enable other telecommunication companies to have a stake in Singapore Telecom and, vice-versa, for Singapore Telecom to strike up strategic alliances with them. However, priority in the allocation will be given to Singaporeans. As Singapore Telecom is the first statutory board to be floated, the details are being studied carefully and will be announced when they are ready. It is unlikely that the flotation will take place this year.

Sir, I now come to the main provisions of the Bill.

The Bill provides for the reconstitution of TAS as a statutory board. It also provides for the transfer of certain property, rights, liabilities as well as officers or employees of TAS to the respective successor companies which are nominated by the Minister. It makes financial arrangements for these companies as well as provides for the sale of their shares.

The TAS shall perform functions and exercise powers as conferred by or under this Bill. Specifically, I will list only the major functions. Firstly, to ensure that there are provided throughout Singapore good and sufficient domestic and international telecommunications and postal services, at rates which are consistent with efficient service. Secondly, to exercise licensing and regulatory functions. Thirdly, to act internationally as the national body which represents Singapore and at the same time to advise Government in respect of telecommunications and postal matters. And fourthly, to maintain effective competition between telecommunication operators.

The Bill will enable TAS to grant licences to operators. These operators will be designated as Public Telecommunication (PTL) as well as Public Postal Licensees (PPL) for the operation of telecommunications and postal services respectively. The first PTL will be Singapore Telecom and the first PPL will be Singapore Post. Singapore Telecom will be held by a Government holding company and Singapore Post will be corporatised as a subsidiary of Singapore Telecom.

All the assets, including working capital and manpower resources, that are required for commercial operations will be transferred to Singapore Telecom (ST) and Singapore Post (SP) respectively, on a date to be appointed.

Upon corporatisation, most of the staff will be transferred to Singapore Telecom and Singapore Post. They will be transferred on terms which are no less favourable than those enjoyed by them prior to their transfer. The rest will be retained in the reconstituted TAS to handle regulatory and licensing functions. The principle here is that the staff should remain wherever they are today, performing largely the same duties prior to corporatisation. I can assure this House that there will be no retrenchment of staff in connection with this privatisation exercise.

This Bill provides for the corporatisation of Singapore Telecom and Singapore Post in the first instance. They will operate as wholly Government-owned companies for a certain period of time. The Government will only privatise Singapore Telecom, in other words, sell its shares to the public, some time later. The Bill makes provision for this to take place as and when we are ready to do so. My Ministry would like the corporatised ST and SP to a have period in which to settle down to their new roles as private companies. This will also enable my Ministry to study further the details of the flotation.

Sir, this Bill represents the result of more than 12 months of intensive work by officers of Government Ministries and TAS. They have come up with the framework which incorporates the necessary powers and mechanisms for the effective functioning of a corporatised Singapore Telecom and Singapore Post, with sufficient safeguards to protect the interest of the public and the nation.

Sir, I beg to move.

Question proposed.

Mr Heng Chiang Meng: Mr Speaker, Sir, the Bill was first read on 27th February this year when it was presented to Parliament. Since then, we have the Budget statement, followed by a short break. We then have the debate on the Budget followed by the Committee of Supply, which just ended early this afternoon. And now we have the Second Reading of this Bill. Sir, this type of scheduling simply gives no time to Members of this House to give this important Bill its due attention. I do not really think it is fair for the Government to present a Bill in this manner, considering that most of us -- in fact, the Backbenchers are all part-timers -- have no professional staff to help us in our work. Whereas Ministers have Ministries and I think sufficient staff to help them. Furthermore, as the Minister has said, Singapore Telecom will not be privatised this year, and so I do not understand the rush for the Second Reading, and subsequently the Third Reading of the Bill.

Sir, having said this, I must also add that I fully support the rationale for this Bill. The Bill provides for the corporatisation of two commercial operating or business units of the existing Singapore Telecom (TAS), the telecommunication services and the postal services.

Sir, the Minister gives two objectives or two reasons why this is being done. I must say that the first is really very true. Today, telecommunication services are a global business. It is a growth industry, what one would call a "sunrise" industry. In this particular set-up, it is important that Singapore Telecom should be given the opportunity and the flexibility and liberty to respond rapidly to changing market conditions in this business, both internally, since we are a financial centre as well as an international telecommunication centre, and also for it to expand overseas.

Sir, in this regard, the money needed for the development of this business, especially in research and development, in innovation, in new products and services, will be large, and the subsequent public listing of Singapore Telecom will help it to raise funds when necessary.

In this regard, before I go on to the point on Singaporeans having the opportunity to invest in this blue chip company, I must say that I would like to add a third reason for this, and that is, this Bill will leave the new revamped Telecommunication Authority of Singapore (TAS) as a regulatory body. And it will let the other persons or groups, both Government-owned and non-Government-owned, to perform the direct task of providing the necessary telecommunication services and quasi-postal services. Those are being provided, for example, by Federal Express and DHL, to the public. Here, I think you will remove a major bone of contention, because they are private sector companies dealing in telecommunication equipment.

One major complaint, Sir, from them is the position that the present TAS finds itself in because of conflicting interests. Because they are both presently a provider of services, which means basically in the commercial area as an operator and, at the same time, a regulator. So very often when telecommunication equipment are not approved by the TAS for sale in Singapore, there is always the question mark raised whether these equipment are not suitable for Singapore or whether they present some form of competition to the equipment being marketed by Singapore Telecom.

With the commercial services being ceded to now a privatised or corporatised company, I think we are going to have a slightly better, or what one would call, a more level playing field. If the cards are played correctly, I am very sure that in the not too far distant future, we will see Singapore Telecom becoming another SIA, being one of the best in the world.

Sir, having said that it is good for the new revamped Telecom to be a regulatory body, I find it somewhat strange that the Bill also retains certain provisions which give the new TAS the right to be an operator at some future date (in fact, immediately after the Bill has become an Act). This is found in clause 6(1)(a) where it says that the provision of services "whether by itself or by any other person authorised by a licence granted under this Act". The question of course is, why? Is the Minister of the view that one fine day in the future, the new TAS will need to become an operator again? Why can't the new TAS be similar to, say, the Monetary Authority of Singapore where it is purely a regulatory authority, and to leave the business operations to the market, because it is a regulator? The new TAS can still work its will through the operators in the market.

My apprehension in this area is that some time in the future the new TAS may have an ambitious and aggressive CEO who might want to increase revenues, expand his empire, and since the Act provides for it, it will be very natural for him or her to go into the business of providing services and becoming an operator again. And then, Sir, we are back to square one. I hope that the Minister will explain the reasons for this provision and give an assurance to this House that it is not the intention of the new TAS to be an operator in the future.

Sir, as the Minister has said, the more important reason for corporatisation is to prepare the company for public listing. In this respect, I have, in the past, expressed in this House and outside my feelings on this subject. And I am very glad that the Minister has taken the trouble to explain to this House that there will be assistance given to Singaporeans to invest directly in Singapore Telecom when it goes public.

Sir, we must not lose sight that the shares of Singapore Telecom are actually national assets and therefore belong to the people of Singapore. And it is important to encourage a direct investment by all Singaporeans in this blue chip company. There is a public role, and like the bus companies, Singapore Telecom, although privatised, will still have to perform a large public role. And here, therefore, the more the direct investment Singaporeans take in this company, the better. However, direct investment in this company means that they must hold on to these shares. Because once sold, the direct investment link is broken. If we want to maintain the direct link as long as possible, we have to establish a system to encourage holding of the shares. For this, I will leave it to the Minister's officials to come up with something, but I am willing to help if called upon.

So far, I have spoken only on the telecommunication services. What about the postal services? Sir, unlike the telecommunication services, the postal services are not a growth industry. It is, in fact, a very mature industry and the reasons for corporatising our postal services are not as clear-cut as those for telecommunication services. If we look very briefly at the history of postal services, it was first performed by a Government Department and then by a statutory board, and now we want to corporatise it. Is there a need to corporatise postal services? Could the Minister please clarify on this issue?

Sir, there are two more other areas of concern that I would like to bring up. One is that licences, according to the Bill, granted to companies to operate telecommunication or postal services will contain certain conditions as they should be. Of course, these conditions are not spelt out in the Bill. But I would like the Minister to assure the House that the conditions would be such that the Government has, at all times, formal control over the operations and pricing of these services to be provided by private companies. Sir, it is important that because of their public service role this control should be imposed and firmly in place. The Government has control to ensure that the public service role will not be neglected.

My second area is that Singapore has benefitted tremendously from the past 20-odd years from a very flexible and liberal approach towards new ideas and innovations in both telecommunication and postal services. In my former job in the banking sector, I had many times come into touch with the people in Singapore Telecom. Because the nature of the international financial businesses involves a lot of fund transfers where Telecom is very much involved. It also involves speed in sending articles, documents, papers across the oceans, and, again, they are also involved. The attitude of accepting new ideas and innovations to be used in Singapore has, in fact, initially created loss of revenue for Telecom but, fortunately, the farsighted management could see beyond these initial losses and have resulted in very much bigger and better gains for Singapore. Of course, the result is the Singapore Telecom that we know of today.

Sir, I would like an assurance from the Minister that since the new TAS will be a regulator and not an operator, it will continue with this approach and that this will remain the hallmark of the Authority that we are going to set up.

Dr Wang Kai Yuen (Bukit Timah): Mr Speaker, Sir, this Bill paves the way for the privatisation of Singapore Telecom. To most Singaporeans they are not so much concerned as to whether Singapore Telecom is privatised, corporatised, or restructured. They are more interested in what the restructuring or the privatisation means to them.

As far as the marketplace for telecommunication services is concerned, the situation before and after the enactment of this Bill remains the same, that is, primarily a monopolistic marketplace. As such, it is useful for the Minister to go back to the fundamental objectives of the privatisation exercise. He mentioned two of the primary objectives. They are good reasons but those are the reasons of Singapore Telecom. I am disappointed with him that he did not place services to the consumers as one of the major objectives of the privatisation exercise as well, because from past experiences, particularly from the experiences of corporatisation of Government hospitals, many Singaporeans have come up with this perception that privatisation means higher costs. So, it seems to me that it will be an opportunity lost not to introduce competition into the communication marketplace during this process of privatisation.

Monopoly in the early days of telecommunication services was justifiable on the grounds of substantial capital investment in the cabling plants for subscribers. In those days, when the key consideration was to provide universal service, service to everyone, monopoly was a good vehicle to increase the penetration of service. However, today, when the penetration has reached saturation level, the emphasis should be on service to customers, service to consumers. And there is no better way to introduce better service to consumers than competition.

The Minister, in his speech yesterday, when he dealt with the evolution of bus services in Singapore, elaborated on how and why TIBS was established after SBS, as a monopoly, failed to provide satisfactory service to commuters. He has stated unequivocally that with two companies competing, the service level has improved while the cost to the commuters has been kept low. I could have lifted his speech, replacing "SBS" wherever it occurs with "Singapore Telecom" and "TIBS" with another telephone company to argue persuasively for introducing another player into the telephone service industry.

Coming to the postal services in Singapore, unlike telephone services, in fact, the postal services face competition in its industry. There are many courier services, including DHL, UPS, which provide fast and efficient overnight mails to overseas countries. So the analogy, in this case, on telephone service is easy to perceive. Local mail is like a domestic telephone network and overseas mail is like international telephone services with different agents providing different levels of services to different customers according to their needs. Despite this competition, the postal services in Singapore are doing very well and are also making money. So I do not think that there is actually any fundamental objection to introducing competition in a largely monopolistic marketplace.

It is unfortunate or, maybe, fortunate that in the telecommunication services in Singapore, we have an absolute monopoly. Not only that, Singapore Telecom has its fingers in all areas of telecommunication services, including mobile phones, zone phones, public office automation service, Teleview, and so on. Even in broadcasting and television which I note is specifically excluded from the purview of Singapore Telecom in this Bill, Singapore Telecom is currently involved in a joint study on cable television together with SBC. To me, this reflects a predatory tendency in the culture of Singapore Telecom which could be further unleashed as an unrestrained private company.

In this respect, Sir, it is useful to note that in Hongkong, which used to have a monopoly company in cables and wireless for the cable-based telephone service, there are three companies providing mobile telephone services to the benefit of the consumers in Hongkong. BG George Yeo, in his speech supporting the privatisation of SBC, pointed out that satellite dishes for television broadcasting are getting very small. I can say that the same can be said regarding telecommunication services and equipment. Already suitcase-size mobile phones and communicating via satellite are a reality. So using BG Yeo's argument, how long can the marketplace be controlled in view of telecommunication and technological changes?

Sir, I note that the Minister has already agreed that, in future, competing telecommunication service companies can be allowed. I would urge him to consider introducing such competition early to the benefit of all Singaporeans. In terms of checks and balances between the regulating authority and the operating company after the enactment of this Bill, I would like to ask the Minister why we did not adopt the model of the Public Transport Council (PTC) in regulating the marketplace. The situation in the telecommunication arena after this Bill is enacted is quite similar to the public transportation industry prior to the establishment of PTC with ROV being the regulator, and SBS and TIBS being the operating companies. The establishment of the PTC means that there must be benefits to be derived with the establishment of such an authority. So we must have learnt some lessons from the operation of the PTC. To me, for instance, the PTC has allowed more citizen participation by giving the common citizens an access to the decision-making process. I think the lesson we learnt there can also be applied in this case. And if we do so by establishing a public committee to review and to regulate the telephone service, we are just moving the industry in line with the practices in other developed countries.

I would like to ask the Minister to look into the possibility of setting up another PTC, in this case, the Public Telecommunication Council, to better regulate the marketplace.

Encik Othman bin Haron Eusofe (Marine Parade GRC): Sir, I support the Bill.

Sir, this is the first major statutory board that will be corporatised or privatised. Public sector employees will then become employees of private companies. We, from the unions, would like to learn from Telecom's experience so that we will know what to do and what we must avoid.

Sir, the Minister has assured that there will be no retrenchment. I am happy to hear that and I am sure the employees of TAS will also be happy to hear this news. Clauses 36 and 48 of the Bill, as the Minister has stated just now, have provided for the transfer of the employees to the two successor companies "on terms no less favourable than those enjoyed by him immediately prior to his transfer". Notwithstanding this, there are still concerns among the employees of TAS that, in the course of the transfer, they may not be getting a fair deal. I would like to get an assurance from the Minister that he will look into how the transfer is done. I would also like to seek his clarification whether the terms or contracts of service for employees to be transferred to these companies have already been worked out, and, if they have not, when these are expected to be worked out.

Furthermore, whether the employees would have the choice as to which company they want to be transferred to. I believe that some employees from the telecommunication services were transferred to the postal services. They were sent there to help out in the postal services. They want to know whether they have the option to transfer back to the telecommunication successor company.

Sir, there are also pensionable officers in TAS. They would like to know how their pensions will be safeguarded. I am told that in the postal services, there are pensionable postal officers. And if they are to go to the postal successor company, they may have to be converted to non-pensionable officers and would have to contribute to the CPF. Some of them have said that on conversion, they will really be taking a reduction in their take-home pay, because they would then have to convert to the higher rate of CPF contribution. I am not sure whether Telecom has looked into this. Sir, these are some of the concerns of the employees. I hope that the Minister will look into them and help to alleviate their anxieties. I think each and every case must be examined with great care and sensitivity.

Sir, I am sure that the two successor companies will be effectively managed, but to be able to operate successfully, they must have able and competent staff who are properly motivated to give of their best. They must be happy working in the new environment. Otherwise, productivity will be affected and this will result in higher cost of operations and this can have an impact on telecommunication and postal rates.

Sir, on this note, I support the Bill.

Mr Mah Bow Tan: Mr Speaker, Sir, first of all, let me thank all the Members who, I believe, have no major objections to the Bill. In fact, they wholeheartedly support the objectives of the Bill. I am particularly pleased that Mr Heng has also voiced his support for the Bill, although he has a slight reservation in so far as the timing of this Second Reading is concerned.

Sir, I do not believe that there is any reason for him to feel aggrieved. There has been no undue haste in the timing of the Second Reading. It was the first available sitting of the House which you asked, Sir, after the presentation of the Bill on 27th February, during which time some three weeks have elapsed and I think those Members who are interested would have had sufficient time to look at it. But more than that is the fact that this is not a new issue. We have debated this matter in this House at least once before, if not more. The consultants have studied this issue since 1991 and over the last year, I think we have had many opportunities to discuss various aspects of the Bill.

The Bill before this House is an amendment to an existing Act. The main provisions that are being amended relate to the reconstitution of TAS into a statutory board. So the major provisions of the Act are still left intact. The point I wish to make really is that there is no compelling reason for us to either move this Second Reading with undue haste, nor is there any compelling reason to wait. Singapore Telecom needs time to operate as a private company before flotation, and TAS, the regulator, also needs time to settle down. So I think the sooner we present this Bill, debate it, and if the House passes it, then the earlier we can move on to the next phase of the exercise which is the final flotation of ST.

Sir, Mr Heng also asked why there are provisions in the Bill for TAS to continue to provide services. The reason is actually quite simple and it is not meant for TAS to expand its empire. It is really a residual power. Basically, what it means is that if the licensee either fails or is unable to discharge his obligations, as spelt out in the licence, then the Telecommunication Authority of Singapore will have this power to step in and take over the services. So it is actually only a residual power.

The other condition under which this can be exercised is really in case of an emergency, and I think these are adequately spelt out in the Bill. Sir, I hope he is satisfied with this reaction and does not attribute it to any untoward motives on the part of the Telecommunication Authority.

Sir, Mr Heng has also expressed some concern about the need to corporatise the postal part of TAS. He argues that the postal authorities are basically domestic oriented and there is really no need for them to be corporatised. I just want to point out that what I said with regard to the Telecommunication Authority applies equally to the postal authorities, although perhaps not to the same degree. In other words, the need for the postal authorities to innovate and compete to provide new kinds of services in competition with other private commercial organisations applies also in the case of the postal authorities.

Postal services have also changed. Today, with electronics and the computer, the nature of postal services is going to change, even more rapidly. So corporatisation of the postal authorities would also allow them to take advantage of these changes and to compete in the same arena, like the courier companies and so on.

We are not alone, of course, in corporatising or eventually privatising the postal authorities. Other countries have done this, although the track record so far shows that it is done with varying degrees of success. The New Zealanders have done it and the Malaysians have also done it.

Finally, Sir, I think Mr Heng made a plea for the condition of the licence to be such that Government will have control over prices and services. I can give him this assurance. It is provided in the Bill. The regulatory authority, when it issues the licence, will issue it with a set of conditions and obligations which it will require the licensee to fulfil. So the public service role will not be neglected.

Sir, I was very pleased to hear Mr Heng's quite unsolicited compliments with regard to his dealings with the TAS's staff. I do not see any need for him to feel apprehensive about the attitude of the staff after corporatisation. And indeed, as I have tried to explain, the purpose behind this exercise really is to allow them to be even more innovative, to be even more daring in their approach and, as a result, TAS will have two roles, the regulatory role which it will have to exercise conscientiously, but it will also have a developmental role. In this developmental role, its job is to make sure that it will continue to push for more innovations. So the Member can rest assured on this point.

Sir, I turn now to the points that were raised by Dr Wang Kai Yuen. Basically, Dr Wang argues for more competition and, as I have explained in my speech, this will be so. There will be more competition, but I must stress that the competition will be in places and at a speed which the market will allow. Where it benefits consumers, we will certainly go all out to introduce more competition, as we have already done. Even before privatisation, there has been a concerted move towards introducing more competition. But this move will accelerate and with the splitting of TAS into two, Singapore Telecom will be told that it will have to compete and will have to compete in areas where currently it enjoys a monopoly. But in which area specifically, we are now working out, and the Telecommunication Authority and the Ministry will be issuing some guidelines in due course. But the basic guideline is that it must be to the benefit of the consumer.

As to when we are going to introduce this competition, I think we will have to phase it in, depending on which area. We will probably allow competition in areas where there is greater benefit to the consumers without any adverse effect to the overall regulated structure of the industry in Singapore. But where the area requires greater capital investment, I presume the Member will agree with me that we will have to be a bit more cautious in that area.

Finally, I turn to Encik Othman Haron Eusofe's question regarding the welfare of the staff. I am not in a position to answer completely all his questions, but I will endeavour probably to take the main points. The first point really is to assure him and his union members that the welfare of the staff will be taken care of in this privatisation exercise. The assurance that I gave in this House about retrenchment is an assurance which the management of the Authority as well as the Company has given me and I am passing this on. I believe that this assurance has been well received by the employees.

In so far as transfer of employees to companies is concerned, I think the important point really is that this transfer will be done at terms which are no less favourable. I think the operative words are "at terms no less favourable". Whether the terms have been worked out or not, I am not in a position to say. If they have not been worked out, I am sure that they will be adequately protected by this guarantee. Collective agreements can be worked out even after the transfers have been carried out. I do not think there is any problem with this.

He has also asked whether there is going to be any choice for employees to transfer from one company to another. I would leave this to the management of the companies to decide, but I would say offhand that where an employee has already been working and performing well, it would be preferable to leave him or her where he or she is currently working. But these are matters which I shall leave to the company to sort out.

In so far as pensionable officers are concerned and those who are converting to CPF, I think this problem has arisen because it is now going to be a private company, and it is not usual for private companies to have officers who are pensionable. They may have to convert to CPF, but again I go back and remind Members about this phrase "no less favourable terms". This is something that will have to be worked out between the union and the management concerned. I really want to allay the fears of staff of the current TAS that all necessary steps have been taken by the management and by the Authority to make sure that their welfare is taken care of. In this respect, the management has also taken great pains to keep the union involved and informed every step of the way, even way back when the first concept of privatisation was mooted. I believe that there has been a very good rapport between the union and the management of Singapore Telecom. They kept each other informed all the way, and there has been a continuous dialogue. This is one of the reasons why the labour-management relations in the company have been very well maintained and preserved. I do not see any difficulty in this area. The particular details that the Member wishes answers to, I would be most happy to answer him or to pass on his requests to the management concerned.

Sir, I believe I have answered most of the Members' comments.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. -- [Mr Mah Bow Tan].

Bill considered in Committee.

[Mr Speaker in the Chair]

Clauses 1 to 132 inclusive ordered to stand part of the Bill.

First to Third Schedules ordered to stand part of the Bill.

Fourth Schedule --

Mr Mah Bow Tan: Sir, I beg to move,

In page 84, after line 18, to insert:- "Amendment 6. Section 2 of the Statutory Boards to Statutory (Taxable Services) Act is amended by Boards (Taxable inserting, immediately after the definition Services) Act. of "services", the following definition: Cap. 318. " "statutory board" includes a public telecommunication licensee referred to in the Telecommunication Authority of Singapore Act 1992.".".

Sir, this amendment is a consequential amendment. It is to enable Singapore Telecom, notwithstanding that it is a private company, to continue to collect revenue, taxes, on behalf of Government, which may be imposed from time to time.

Amendment agreed to.

Fourth Schedule, as amended, ordered to stand part of the Bill.

Consequential amendment made:

To renumber existing paragraph 6 as paragraph 7.

Bill reported with an amendment; read a Third time and passed.