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 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. “Company Profile,” Singtel, accessed 11 December 2011.
2. “One Hundred Years of Telephone Service in Singapore,” Straits Times, 1 April 1979, 25. (From NewspaperSG)
3. “How It All Began,” Keylines 6 (June 1990) (Call no. RSING 384.095957 K)
4. “One Hundred Years of Telephone Service in Singapore.”
5. “One Hundred Years of Telephone Service in Singapore.”
6. “Cheaper, Compact Cordless Phone Out by Year End,” Straits Times, 9 June 1990, 3; Sivam Subramanian, “Telecom To Spend $830m on Digital Phone Network,” Straits Times, 11 October 1989, 40. (From NewspaperSG)
7. “Corporatisation of Singapore Telecom: In Preparation for Privatization,” Hello (June 1993). (Call no. RSING 384.029 H)
8. Grace Chng, “Telecoms Plans One-Stop Service for Customers,” Straits Times, 1 February 1989, 16. (From NewspaperSG)
9. Conrad Raj, “S’pore Telecom May Privatise in 2 to 3 Years,” Straits Times, 10 November 1989, 1; Kenneth James, “Telecoms Reaps Record $620m in Net Revenue,” Straits Times, 29 August 1989, 39. (From NewspaperSG)
10. Tan Sai Siong, “Some Lessons To Be Learned From Telecom Share Issue,” Straits Times, 6 November 1993, 33. (From NewspaperSG)
11. “S’pore Telecom Debut Ushers in New Era for Stock Exchange,” Straits Times, 2 November 1993, 39. (From NewspaperSG)
12. Genevieve Cua, “$2.02b Paid for ST2 Take Up of 809m Shares,” Business Times, 17 September 1996, 1. (From NewspaperSG)
13. “1990/1991: A Year of Achievement for Singapore Telecom,” Hello (September 1991): 9. (Call no. RSING 384.02 9 H)
14. “We Chalk Up Another Good Year,” Hello (May 1994): 2. (Call no. RSING 384.029 H)
15. Tammy Tan, “Govt Ending SingTel’s Monopoly in Year 2000,” Straits Times, 12 May 1996, 1. (From NewspaperSG)
16. Tammy Tan, “ST Telemedia Feels Heat of ”Favourite” Tag for Phone License,” Straits Times, 29 July 1997, 47. (From NewspaperSG)
17. Toh Han Shih, “New Weapon for SingTel, M1,” Business Times, 19 June 1997, 3. (From NewspaperSG)
18. Teh Hooi Ling “SingTel Warning Even As Its Profits Rise 3.7%,” Business Times, 5 June 1999, 1. (From NewspaperSG)
19. Lim Seng Jin, “Nine More Channels – by Phone,” Straits Times, 11 March 1996, 4. (From NewspaperSG)
20. Teh, “SingTel Warning Even As Its Profits Rise 3.7%.”
21. The Hooi Ling, “SingTel Satellite Launched Successfully,” Business Times, 27 August 1998, 3. (From NewspaperSG)
22. “Telecoms Sets Sights on International Projects,” Straits Times, 26 April 1988, 14. (From NewspaperSG)
23. “Singapore Telecom Invests $73M More To Boost Customer Services,” Straits Times, 29 November 1989, 48; “Singapore Telecom Set for Global Challenge,” Straits Times 13 October 1993, 2. (From NewspaperSG)
24. “Singapore Telecom Set for Global Challenge”; Al Labita, “S’pore Telecom Buys Into Manila’s Globe Telecom,” Business Times, 24 March 1993, 13. (From NewspaperSG)
25. Genevieve Cua, “SPH Acquires 1.35% Indirect Stake in Belgacom for $93m,” Business Times, 4 April 1996, 1; Tammy Tan, “Belgacom Forecasts $548m Profit,” Straits Times, 25 April 1996, 52. (From NewspaperSG)
26. Tammy Tan, “SingTel To Focus on Faster-Growing Asia-Pacific in New Overseas Strategy,” Straits Times, 20 January 1997, 35. (From NewspaperSG)
27. “Singtel’s Thai Buy Puts Cash Hoard To Good Use,” Straits Times, 8 January 1999, 79; Denesh Divyanathan, “SingTel's AIS Stake Worth $l.lb,” Straits Times, 30 August 2001, 11. (From NewspaperSG)
28. “SingTel To Pay Close to $1b for Time’s Phone Network,” Straits Times, 7 April 2000, 71; The Hooi Ling, “Tough Road Ahead for SingTel,” Business Times, 18 February 2000, 39. (From NewspaperSG)
29. Jennifer Lien, “SingTel Not Given Reason for Talks’ Failure: Hsien Yang,” Business Times, 13 May 2000, 1. (From NewspaperSG)
30. Catherine Ong and Andrew Wee, “SingTel and Virgin in US$1b Asian Mobile Phone Venture,” Business Times, 20 May 2000, 1. (From NewspaperSG)
31. Teh Hooi Ling, “SingTel Clinches S$690m Stake in Indian Operator,” Business Times, 8 August 2000, 1. (From NewspaperSG)
32. The Hooi Ling and Angela Tan, “SingTel Shares Hammered Down to Record Low of $1.88,” Business Times, 28 March 2001, 1; Hock Lock Siew and Angela Tan, “You Can’t Win Them All,” Business Times, 26 February 2003, 9 (From NewspaperSG); Singtel, Annual Report 2001/2002 (Singapore: Singapore Telecommunications Limited, 2002), 2, 7.
33. “Singtel’s Foothold,” Today, 2 November 2001, 16; “Singtel Buys 45% of Bangladesh Telecom,” Today, 3 June 2005, 42; Grace Ng, “SingTel Buys 30% Stake in Pakistan Telco for $1.2b,” Straits Times, 29 June 2007, 64. (From NewspaperSG) 
34. Hock Lock Siew and Lee Han Shih, “Metcalfe’s Law Works Its Magic on SingTel,” Business Times, 16 March 2001, 7. (From NewspaperSG)
35. Jaime Koh, “SingTel Earns $760m in Q3,” Today, 4 February 2005, 44. (From NewspaperSG)
36. Singtel, Annual Report 2004/2005 (Singapore: Singapore Telecommunications Limited, 2005), 25.
37. Wong Wei Kong, “Still Very Much the Talk of the Town,” Business Times, 5 August 2005, 44. (From NewspaperSG)
38. “Singtel Launches Advertising Services Arm,” Singtel, accessed 27 April 2017; Singtel Digital Media Launches Lifestyle Web Portal – inSing.com.,” Singtel, accessed 27 April 2017; “Singtel Blazes Ahead in the Multimedia Arena With AMPedTM, An Unsurpassed Music Experience,” Singtel, accessed 27 April 2017.
39. Ian De Cotta, “Oh, It’s Solely Mio for EPL,” Today, 2 October 2009, 1. (From NewspaperSG)
40. “Singtel Group’s Results for the Second Quarter and Half Year Ended 30 September 2008, Singtel, accessed 25 April 2017; “2010/2017 Annual Report” Earnings Review,” Singtel, accessed 27 April 2017.
41. De Cotta, “Oh, It’s Solely Mio for EPL.” 
42. Teo Kuan Yee, “First in Innovation,” Straits Times, 15 December 2010, 10. (From NewspaperSG)
43. Victoria Ho, “SingTel Group’s Mobile Customer Base Hits 383m,” Business Times, 10 February 2011, 5. (From NewspaperSG)
44. “SingTel Launches @SingTel v2.0, Remote Diagnostics and Ku-Band Availability for the Maritime Community,” ENP Newswire (28 October 2010). (From Factiva via NLB’s eResources website)



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.