BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Telecomunications sector of Singapore

Fittingly, the performance and the apparent strategy of incumbent SingTel sum up Singapore’s telecoms industry rather well. Dominant in the country’s stagnant fixed-line sector with a 97% market share, the operator is attempting to offset declining fixed voice revenues with increasing broadband revenues, an ever growing prepaid mobile and 3G customer base and a foothold in the country’s lucrative pay-TV market. Aware of the limitations of growth in such a small domestic market, integral to SingTel’s strategy remains its operations in India, Indonesia, Thailand and the Philippines, where it continues to prosper. Indeed, the operator does not want to stop here, and with the potential subscriber growth becoming limited in South East Asia also, it is monitoring prospects in Central Asia and Africa.

Unsurprisingly, our projections for fixed-line services make dismal reading. Penetration is likely to fall below the 40% level in 2010. The decline will be slow and drawn out, as illustrated by SingTel’s 7% y-oy fall in fixed revenues for its most recently reported quarter (September 2006). The mobile sector is a different matter, and despite reaching saturation levels is proving remarkably resilient. 3G mobile telephony is growing in popularity and is behind much of the subscriber growth, as is the increase of the prepaid market, across all three mobile operators. BMI projects that there will be over 5mn subscribers in 2008, with penetration peaking at around 117% in 2009. By the end of 2011, we estimate a total of 5.35mn mobile customers in Singapore. Encouraging this growth also is the stiff competition in Singapore’s market, with StarHub pushing SingTel closely, whilst M1’s 3G network is proving remarkably popular.

Broadband continues to be a key growth driver in Singapore’s telecoms sector. Again, this sector is dominated by SingTel with a 54% market share, but StarHub’s own subscriber base is growing, and at the last count was around 43%. We expect a total of 1.3mn broadband subscribers by 2011 with an average annual growth rate of 15% over the next five years. Helping push this growth will be M1, which launched its broadband service in December 2006.

Singapore continues to be an investor friendly market, with little political or economic risk and good potential as a manufacturing base. In fifth position in BMI’s Business Environment Rankings, Singapore’s telecoms market is mature and well developed. Yes, the size of the market does limit growth potential, but it still attracts inward investment, as witnessed by Qtel’s recent US$635mn investment in ST Telemedia unit Asia Mobile Holdings (AMH). It appears that Qatar’s state incumbent will use Singapore as its hub before looking to invest elsewhere in South East Asia. However, it will also have a stake in StarHub, Singapore’s only fully integrated telecoms company. Interestingly, it is to the likes of StarHub that SingTel must look to in diversifying its product range as it continues to offset disappointing fixed revenues and faces up to mobile saturation.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - Business Environment

Asia

Table: Singapore Business Environment SWOT

Chapter 3 - Industry Forecast Scenario

Fixed-Line

Table – Singapore Telecoms Sector – Fixed-line – Historical Data & Forecasts

Mobile

Table – Singapore Telecoms Sector – Mobiles – Historical Data & Forecasts

Internet

Table: Singapore Telecoms Sector – Internet – Historical Data & Forecasts

Chapter 4 - Macroeconomic Forecast Scenario

Slowing, But Still Strong

Table: GDP, Population & Output

Chapter 5 - Country Snapshot: Singapore Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Chapter 6 - Competitive Landscape

Market Structure

Competitor Analysis

Table: Key Players – Singapore Telecoms Sector

Table: Selected Operators Financial Indicators

Key Players

Fixed-Line

Table: Regional Fixed-Line Penetration Overview

Mobile

Table: Regional Mobile Penetration Overview

Internet

Table: Regional Internet Penetration Overview

Market Data Analysis

Fixed-Line

Table: Singapore Local Access Market (June 2006)

Broadband

Table: Singapore Broadband Market (June 2006)

Mobile

Table: Singapore Wireless Market (June 06)

Table: Singapore Mobile ARPU, H1 2006 (Post-paid/Prepaid)

3G

Table: Estimate Singapore 3G Market (June 2006)

Industry Developments

Chapter 7 - Company Profiles

Regional Case Study – Motorola

Table: Motorola Net Sales by Region (US$mn)

Table: Motorola Market Sales by Locality of End Customer

Table: Leading Mobile Phone Handset Sales (mn) – Q306

Singapore Telecommunications (SingTel)

SingTel Mobile

MobileOne (M1)

StarHub

Ericsson

Chapter 8 - BMI Forecast Modelling

How we generate our industry forecasts

Telecommunications Industry

Sources

Chapter 9 - Appendix: Regional Demographic Data

Table- Manufacturing Wages (ave per annum), US$

Table - Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Asia Telecommunications Reports: Sample of Companies Ranked

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Commentary on key operators highlighting ownership structures, latest available revenue figures, market share analysis and ARPU counts. BMI forecasts for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt. Company SWOTS Covering all leading telecommunications operators and manufacturers operating in each market, including competitive intelligence on geographic presence and competitive positioning against local companies; local market share; leading products, services and technologies; foreign direct investments, projects, merger and acquisition strategies.

Network of Asian Telecommunications Sources

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BMI's Asian Telecommunications Reports are based on an extensive network of multilateral organisations, government departments, telecommunications industry associations, chambers of commerce and company reports. Information sources include: