SINGAPORE TELECOM (Cost of telephone calls and implementation of technology)

Mr Chng Hee Kok asked the Minister for Communications if he will state whether the cost of telephone calls and the implementation of technology are adversely affected by the monopolies granted to Singapore Telecom.

The Minister for Communications (Mr Mah Bow Tan): Mr Speaker, Sir, Singapore needs a comprehensive, competitive and efficient telecommunication system if we want to be an attractive financial and business centre. We cannot afford to have telecommunication services in Singapore costing more than other financial centres. Nor should the range and the quality of these services be inferior to what is available elsewhere. Even though Singapore Telecom has been granted exclusive rights to operate basic, domestic and international telecommunication services, its pricing of these services is subject to the control of the Telecommunication Authority of Singapore. TAS has a price control framework which ensures that Singapore Telecom's charges for basic telecommunication services are among the lowest compared with national telecommunication operators in major business and financial centres as well as the NIEs. TAS will review the price control framework regularly to keep pace with world trends and to ensure that Singapore retains its competitive edge as a business hub.

There is no evidence to suggest that exclusive rights given to Singapore Telecom had impeded the implementation of advanced technology. Telecommunication is a technology-driven industry. New technology has spawned new services which transcend national boundaries with the world as the market place. We can neither go against, alter nor shut out global competition. Singapore Telecom recognises that to stay ahead in business and to compete globally they will have to continually invest and implement new technology.

Singapore Telecom is also responding to competition through better service and more aggressive pricing. That is why Singapore Telecom has progressively reduced its charges, including its recent substantial IDD rate reductions. It has introduced services like Singnet even though offering Singaporeans access to Internet will potentially erode Singapore Telecom's IDD revenue. I am confident that Singapore Telecom will continue to take bold steps to revise its rates and to upgrade its services in line with changing market conditions.

Mr Chng Hee Kok (Tampines GRC): In view of the Minister's reply, will he instruct the Telecommunication Authority of Singapore to be more flexible or lenient in its interpretation of the monopoly granted to Singapore Telecom? This is in view of the wider picture that Singapore must maintain a technological lead in this particular area.

Mr Mah Bow Tan: That is exactly what I have asked TAS to do. I have given instructions to the Telecommunication Authority of Singapore that in those areas where exclusive rights are now given to Singapore Telecom the Act should be interpreted in as wide and generous a manner as possible so as to ensure that there is as much room and flexibility as possible for other operators to work. The net result of all this is that there should be better service to Singaporeans.

Mr Chia Shi Teck: Sir, a recent report by EIU stated that Singapore is more costly than Hong Kong in terms of telecommunication costs. Given the monopoly to Singapore Telecom, would the Minister direct that they must be the cheapest as far as this region is concerned, because they have the advantage of the monopoly?

Mr Mah Bow Tan: There is a basket of services which TAS uses to compare Singapore Telecom's rates with those of other countries, in particular, as I mentioned just now, those of the major financial centres and the NIEs. It is not possible to be the cheapest in all categories for various reasons, for example, exchange rate fluctuations. Nevertheless, the objective of this is that we must be among the lowest for a broad range of services within this basket. I think that is currently being achieved by Singapore Telecom. If they are not, they will be asked to make changes quite quickly.

Mr Chia Shi Teck: I suppose the basket must be for those countries that we are competing with. Hong Kong, being our biggest competitor, we must at all times target our rates to be lower than them.

Mr Mah Bow Tan: When I used the word "basket", I am referring to the services which we compare with. Obviously, Hong Kong is one of the major countries with which we compare. The NIEs and the other financial centres, including London and New York, are also within this comparison table.