Singapore Telecommunications (SingTel)



Singapore Telecommunications (Singtel) is a telecommunications group offering a wide range of services such as mobile, data and internet services, as well as info-communications technology and pay-television. One of the largest public-listed companies in Singapore by market capitalisation, Singtel has significant stakes in telecommunications companies in India, Indonesia, Australia, the Philippines, Pakistan, Bangladesh and Thailand.1

Early history
The telephone was first introduced in Singapore in 1879 when a 50-line exchange was set up by Bennett Pell, the local manager of the Eastern Extension Telegraph Company. Singapore was reported to be the first city in the East to have a telephone system.2


In July 1882, Singapore’s phone network was operated by the Oriental Telephone and Electric Company (OTEC). The company constructed its first Public Telephone Exchange with facilities for 60 telephone lines linking business houses like Behn Meyer & Co, Chartered Bank and The Singapore Stock Exchange. In 1907, OTEC was replaced by a new Central Telephone Exchange in Hill Street. The telephone service in Singapore was automated in April 1930. On 1 December 1937, the telephone service went international and inaugurated the first call connected between London and Singapore.3 In 1955, the network was taken over by the British colonial government, which established the Singapore Telephone Board (STB).4

STB merged with the Telecommunication Authority of Singapore in 1974 to form Telecoms.5 This entity then merged with the Postal Service Department in 1982. Singapore installed its one millionth phone line by 1990, and in 1994 became one of the first countries in the world to have a completely digital telephone network. A nation-wide broadband Integrated Services Digital Network (ISDN) was also put in place in the early 1990s.6

Corporatisation and public listing
From the mid-1980s, the Singapore government had considered privatising  Telecoms and listing it on the stock exchange.7 In 1989, as part of a three-year corporatisation programme, Telecoms was restructured and renamed Singapore Telecom (Singtel). The organisation was revamped to be more commercially focused and customer service oriented, with a number of strategic business units set up.8 For the financial year ending 31 March 1989, Telecoms was the most profitable statutory board with total net income of S$620 million. The corporatisation programme culminated in the establishment of Singapore Telecom Pte Ltd in 1992.9


In October 1993, Singtel announced its initial public offering (IPO). Through state investment company Temasek Holdings, the government initially offered 1.1 billion shares for sale to Singaporeans, with a series of discounts and loyalty bonuses. This was subscribed by 4.1 times, and Temasek added another 587 million shares to help meet the overwhelming demand. After the float, the government still held around 89 percent of Singtel through Temasek.10

On 1 November 1993, Singtel debuted on the Stock Exchange of Singapore, with more than 1.4 million Singaporeans, along with foreign and local institutions, acquiring shares in the company. With a share capital of 15.25 billion shares and a market capitalisation of S$60 billion at the time, Singtel became the largest company listed on the stock exchange.11 Further tranches of Singtel shares were released for public sale in subsequent years, including 804 million shares in 1996.12

Having become one of Singapore’s largest companies, Singtel embarked on investing in network infrastructure and new technologies. In late 1993, the company announced that it would pump S$3.7 billion into systems and facilities, such as an optical fibre network, digitisation of the telephone network and digital submarine cable links, over the next five years13 In 1993/1994, Singapore Telecom Group invested S$661 million on upgrading, including S$317.2 million on transmission equipment and S$57 million on buildings.14

Market competition and new markets

In 1996, the government informed Singtel that it would end the company’s monopoly in the telecommunications market with effect from 1 April 2000. Singtel’s license to be the sole provider in Singapore’s mobile services market had been scheduled to end in 1997, while its monopoly on fixed line, international direct dialling (IDD) and other services was to end in 2007. The company received S$1.5 billion in compensation from the government for the early implementation of full market liberalisation.15


Singtel prepared for competition with more aggressive marketing strategies.  In bidding for the basic telephone licence in 1997, Starhub and Singapore Technologies Telemedia were cited as the “hot favourite” by analysts.16 To get ahead of the competition, Singtel deployed “data warehouse”, a database that analysed customers profile and enabled better reach with innovative product and services. However, Singtel’s rival M1 deployed the same strategy.17

Singtel also began offering commercial internet services through SingNet in 1994. From 1,500 users at the end of 1994, SingNet’s subscriber base had grown to 100,000 by mid-1996.18 That year, Singtel made a foray into content provision and broadcasting, offering video on demand channels through both its telephone system and co-axial cable network.19 This grew into Singtel Magix, a broadband multimedia system with 12,000 subscribers by 1999.20

In August 1998, Singtel launched its first satellite – the S$425.3-million ST-1– in a joint venture with Taiwan’s Chunghwa Telecom. The satellite, which was designed to support both broadcasting and telecommunications services, became operational three months later in November. Singtel had envisaged that the use of the satellite would help to lower the costs for services such as direct-to-home television and cable TV.21

Growth, acquisitions and overseas investments
While it was still known as Telecoms, Singtel had recognised that it would have to look outside Singapore for long-term growth. In the 1980s, it set up Singapore Telecoms International (STI), a subsidiary that would provide consultancy and operations services overseas.22 Singtel also partnered other telecommunications companies such as AT&T, an American telecommunications company, and British Telecom in the areas of marketing and service alliances.23


In the 1990s, Singtel’s international strategy was geared towards equity investments and joint ventures. By 1993, STI had invested S$470 million in mobile services and cable television services in 23 joint ventures and investments in countries such as Sri Lanka, Australia, Norway and the United States, including shares acquired in Globe Telecom in the Philippines.24

In April 1996, ADSB Telecommunications – a consortium company comprising Singtel, Ameritech and Tele Danmark – acquired a 49.9 percent stake in Belgian telecommunications operator, Belgacom. Singtel’s share in the consortium was 27 percent, a stake worth more than US$675 million.25 From 1997, Singtel decided to shift its focus from the European region to the Asia-Pacific region. The deal with Belgacom was Singtel’s last in Europe.26 In 1999, Singtel purchased a stake in Thai mobile company, Advanced Info Service, in order to gain a foothold in Thailand’s telecommunications market.27

From 2000, Singtel concentrated on acquiring stakes in various telecommunications companies in developing economies, and these investments drove the company’s growth during the decade. Looking to expand via acquisitions and mergers, Singtel explored potential bids for  Malaysian cellular phone company, Binariang, and Taiwanese company, Chunghwa Telecom, and engaged in unsuccessful merger talks with Hong Kong’s Cable & Wireless HKT.28

In May 2000, Singtel failed in a bid to purchase a stake in Malaysia’s Time Engineering and Time.com.29 Soon after, Singtel concluded a S$1.73-billion joint venture with Virgin Management to set up Virgin Mobile (Asia), an equally-owned mobile service company.30 In August 2000, Singtel clinched a 30 percent (S$690 million) stake in India’s Bharti Group.31

In March 2001, Singtel announced its offer to buy over Australia’s Cable & Wireless Optus. The S$13.6-billion deal was a success and Singtel was floated on the Australian Stock Exchange in September 2001. Cable & Wireless Optus was renamed Singtel Optus.32 Other acquisitions included stakes in Indonesia’s Telkomsel in 2001, Pacific Bangladesh Telecom in 2005, and Pakistan’s Warid Telecom in 2007.33

In 2001, the government announced that it would give up its veto on Singtel’s board, and was ready to divest some of its 78 percent stake in the company.34 By December 2004, overseas operations and investments accounted for 75 percent of total revenue. The various acquisitions resulted in revenue of S$3.23 billion despite an 11 percent fall in earnings.35 For the financial year ending March 2005, Singtel had operations and investments in more than 20 countries and territories.36

Multimedia strategy
To concentrate on its core business, Singtel sold 69 percent of Singapore Post and divested Yellow Pages in 2003.37 In the years that followed, media content provision became Singtel’s core business. A content and media services group was created for the television, advertising and digital content markets, including the launch of an advertising services arm, a web portal inSing.com, and AMPed, a music download service for mobile subscribers.38


A major part of its content strategy was mioTV, a pay-television service that secured exclusive rights to broadcast English Premier League football in Singapore. Snatching the deal from rival Starhub in 2009 was a coup that reportedly cost Singtel close to S$400 million.39 This boosted mioTV’s subscriber base from 87,000 in September 2008 to 292,000 by March 2011.40 Besides the direct revenues from subscribers, Singtel’s media offerings and mioTV also resulted in revenue streams from advertising.41

By 2010, around 25 percent of SingTel’s Singapore revenue came from non-carriage services. Besides media content provision, Singtel also ventured into info-communications services, such as cloud computing, with plans to become an Asia-Pacific market leader in this sector.42

In 2011, Singtel reported that its mobile subscriber base, including those of international operators in which it held significant stakes, had grown to 383 million users. Overseas investments continued to make up more than 70 percent of the group’s earnings.43 In Singapore, Singtel remained the leading operator in Singapore with 3.2 million users and a 46.4 percent market share. For the year ending March 2010, its net profit was S$3.91 billion.44



Author

Alvin Chua




References
1. Singtel. (n.d.). Company profile. Retrieved 2016, December 11 from SingTel website: https://www.singtel.com/about-Us/company-profile.html
2. One hundred years of telephone service in Singapore. (1979, April 1). The Straits Times, p. 25. Retrieved from NewspaperSG.
3. How it all began. (1990, June). Keylines, 6. (Call no.: RSING 384.095957 K)
4. One hundred years of telephone service in Singapore. (1979, April 1). The Straits Times, p. 25. Retrieved from NewspaperSG.
5. One hundred years of telephone service in Singapore. (1979, April 1). The Straits Times, p. 25. Retrieved from NewspaperSG.
6. Cheaper, compact cordless phone out by year end. (1990, June 9). The Straits Times, p. 3; Subramanian, S. (1989, October 11). Telecom to spend $830m on digital phone network. The Straits Times, p. 40. Retrieved from NewspaperSG.
7. Corporatisation of Singapore Telecom: In preparation for privatization. (1993, June). Hello. (Call no.: RSING 384.029 H)
8. Chng, G. (1989, February 1). Telecoms plans one-stop service for customers. The Straits Times, p. 16. Retrieved from NewspaperSG.
9. Raj, C. (1989, November 10). S’pore Telecom may privatise in 2 to 3 yearsThe Straits Times, p. 1; James, K. (1989, August 29).Telecoms reaps record $620m in net revenue. The Straits Times, p. 39. Retrieved from NewspaperSG.
10. Tan, S. S. (1993, November 6). Some lessons to be learned from Telecom share issue. The Straits Times, p. 33. Retrieved from NewspaperSG.
11. S’pore Telecom debut ushers in new era for stock exchange. (1993, November 2). The Straits Times, p. 39. Retrieved from NewspaperSG.
12. Cua, G. (1996, September 17). $2.02b paid for ST2 take up of 809m shares. The Business Times, p. 1. Retrieved from NewspaperSG.
13. 1990/1991: A year of achievement for Singapore Telecom. (1991, September). Hello, p. 9. (Call no.: RSING 384.02 9 H)
14. We chalk up another good year. (1994, May).  Hello, p. 2. (Call no.: RSING 384.029 H)
15. Tan, T. (1996, May 12). Govt ending SingTel’s monopoly in year 2000The Straits Times, p. 1. Retrieved from NewspaperSG.
16. Tan, T. (1997, July 29). ST Telemedia feels heat of ”favourite” tag for phone license. The Straits Times, p. 47. Retrieved from NewspaperSG
17. Toh, H. S. (1997, June 19). New weapon for SingTel, M1. The Business Times, p. 3. Retrieved from NewspaperSG.
18. Teh, H. L. (1999, June 5). SingTel warning even as its profits rise 3.7%. The Business Times, p. 1. Retrieved from NewspaperSG.
19. Lim, S. J. (1996, March 11). Nine more channels – by phone. (1996, March 11). The Straits Times, p. 4. Retrieved from NewspaperSG.
20. Teh, H. L. (1999, June 5). SingTel warning even as its profits rise 3.7%. The Business Times, p. 1. Retrieved from NewspaperSG.
21. Teh, H. L. (1998, August 27). SingTel satellite launched successfully. The Business Times, p. 3. Retrieved from NewspaperSG.
22. Telecoms sets sights on international projects. (1988, April 26). The Straits Times, p. 14. Retrieved from NewspaperSG.
23. Singapore Telecom invests $73m more to boost customer services. (1989, November 29). The Straits Times, p. 48; Singapore Telecom set for global challenge. (1993, October 13). The Straits Times p. 2. Retrieved from NewspaperSG.
24. Singapore Telecom set for global challenge. (1993, October 13). The Straits Times p. 2; Labita, A. (1993, March 24). S’pore Telecom buys into Manila’s Globe Telecom. The Business Times, p. 13. Retrieved from NewspaperSG.
25. Cua, G. (1996, April 4). SPH acquires 1.35% indirect stake in Belgacom for $93m. The Business Times, p. 1; Tan, T. (1996, April 25). Belgacom forecasts $548m profit. The Straits Times, p. 52.  Retrieved from NewspaperSG.
26. Tan, T. (1997, January 20). SingTel to focus on faster-growing Asia-Pacific in new overseas strategy. The Straits Times, p. 35. Retrieved from NewspaperSG.
27. Singtel’s Thai buy puts cash hoard to good use. (1999, January 8). The Straits Times, p. 79, Divyanathan, D. (2001, August 30). SingTel's AIS stake worth $l.lb. The Straits Times, p. 11. Retrieved from NewspaperSG.
28. SingTel to pay close to $1b for Time’s phone network. (2000, April 7). The Straits Times, p. 71; Teh, H. L. (2000, February 18). Tough road ahead for SingTel. The Business Times, p. 39. Retrieved from NewspaperSG.
29. Lien, J. (2000, May 13). SingTel not given reason for talks’ failure: Hsien YangThe Business Times, p. 1. Retrieved from NewspaperSG.
30. Ong, C., & Wee, A. (2000, May 20). SingTel and Virgin in US$1b Asian mobile phone venture. The Business Times, p. 1. Retrieved from NewspaperSG.
31. Teh, H. L. (2000, August 8). SingTel clinches S$690m stake in Indian operator. The Business Times, p. 1. Retrieved from NewspaperSG.
32. Teh, H. L., & Tan, A. (2001, March 28). SingTel shares hammered down to record low of $1.88. The Business Times, p. 1; Hock, L. S., & Tan, S. (2003, February 26). You can’t win them all. The Business Times, p. 9. Retrieved from NewspaperSG. Singtel. (2002). Annual report 2001/2002 (pp. 2, 7). Retrieved from Singtel website: http://info.singtel.com/sites/default/files/invrel_areports/FFR%20-%20part1a.pdf
33. Singtel’s foothold. (2001, November 2). Today, p. 16; Singtel buys 45% of Bangladesh Telecom. (2005, June 3). Today, p. 42; Ng, G. (2007, June 29). SingTel buys 30% stake in Pakistan telco for $1.2b. The Straits Times, p. 64. Retrieved from NewspaperSG.  
34. Hock, L. S. (2001, March 16). Metcalfe’s law works its magic on SingTel. The Business Times, p. 7. Retrieved from NewspaperSG.
35. Koh, J. (2005, February 4). SingTel earns $760m in Q3. Today, p. 44. Retrieved from NewspaperSG.
36. Singtel. (2005). Annual report 2004/2005: Operating and financial review (p. 25). Retrieved from Singtel website: http://info.singtel.com/sites/default/files/invrel_areports/attachment_hub_DA5383C9-6A39-4E53-8164-B62D4C0B6A73_oprandfinreview.pdf
37. Wong, W. K. (2005, August 5). Still very much the talk of the town. The Business Times, p. 44. Retrieed from NewspaperSG.
38. Singtel. (2009, May 7). Singtel launches advertising services arm. Retrieved 2017, April 27 from Singtel website:  https://www.singtel.com/about-us/news-releases/singtel-launches-advertising-services-arm; Singtel. (2009, May 13). Singtel Digital Media launches lifestyle web portal – inSing.com. Retrieved 2017, April 27 from Singtel website: http://info.singtel.com/node/2889; Singtel (2009, June 14). Singtel blazes ahead in the multimedia arena with AMPedTM, an unsurpassed music experience. Retrieved 2017, April 27 from Singtel website: http://info.singtel.com/node/2901
39. De Cotta, I. (2009, October 2). Oh, it’s solely mio for EPL. Today, p. 1. Retrieved from NewspaperSG.
40. SingTel. (2008, November 12). Singtel Group’s results for the second quarter and half year ended 30 September 2008. Retrieved 2017, April 25 from https://www.singtel.com/about-us/news-releases/singtel-groups-results-second-quarter-and-half-year-ended-30-september-2008; Singtel. (n.d.). 2010/2011 annual report: Earnings review. Retrieved 2017, April 25 from http://info.singtel.com/annualreport/2010-2011/biz_sg_mda.html
41. De Cotta, I. (2009, October 2). Oh, it’s solely mio for EPL. Today, p. 1. Retrieved from NewspaperSG.
42. Teo, K. Y. (2010, December 15). First in innovation. The Straits Times, p. 10. Retrieved from NewspaperSG.
43. Ho, V. (2011, February 10). SingTel group’s mobile customer base hits 383m. The Business Times, p. 5. Retrieved from NewspaperSG.
44. SingTel launches @SingTel v2.0, remote diagnostics and Ku-band availability for the maritime community. (2010, October 28). ENP Newswire. Retrieved from Factiva via NLB’s eResources website: http://eresources.nlb.gov.sg/



The
information in this article is valid as at 2011 and correct as far as we are able to ascertain from our sources. It is not intended to be an exhaustive or complete history of the subject. Please contact the Library for further reading materials on the topic.

 

Subject
Corporations--Singapore
Organisations>>Companies
Telecommunication--Singapore
Organisations
Business, finance and industry>>Industry>>Communication and media>>Telecommunications
Commerce and Industry>>Communications
Business enterprises
Communications