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Singapore Broadband Market Research
One of the most competitive telecoms environments in the world.
By: Gordon Feller & Mary McNamara
Created: 07/09/2003
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Document:
Singapore is an important business and telecommunications services hub in the Asia-Pacific region. The island republic has one of the most modern telecoms infrastructures in the world: its nationwide broadband services connect schools, offices and homes.
Liberalization of the telecoms sector in 2000 has allowed Singapore to become one of the most competitive telecoms environments in the world.
Singapore’s very sophisticated consumer base is quick to adopt new information and communications technologies (ICT) products and services. The level of awareness, acceptance and adoption of ICT among Singapore’s general public and business community is among
the best in the world. Emerging ICT subsectors include wireless technologies, including general packet radio service (GPRS) and third-generation (3G), and wireless data applications, e-commerce and e-business. Ample opportunities exist for foreign companies to partner with local telecoms operators to provide
wireless technology and e-business solutions.
Singapore, a city-state located at the southern tip of the Malay Peninsula, consists of the island of Singapore and 54 adjacent islets covering an area of 626 square kilometres (slightly larger than Montreal). Described by many as the “intelligent island,” the
densely populated country—with 4 million inhabitants—has long been a regional hub for information and communications technologies.
Singapore is considered to have one of the most liberal trading environments in the world. The city-state also boasts a thriving economy and a highly advanced business infrastructure. Singapore has long viewed its knowledge and service industries as integral
to advancing its position globally, and has thus invested heavily in ICT development. Government support has been crucial in Singapore’s rapid adoption of new ICT products and services. Government authorities have put their own services on line, created abundant business incentives and steadily adapted laws
and regulations. The Singaporean market complements any regional strategy for those ICT operators that have a global or regional reach. As well, Singapore can serve as an important gateway to expand into the relatively untapped markets of Southeast Asia.
The Infocomm Development Authority (IDA) of Singapore issued their latest annual Infocomm Industry Survey in August 2001. The survey found that the total Singaporean ICT market, including domestic and export values of ICT products and services, was estimated
at $22.3 billion 1 in 2000 and is forecast to reach $29.8 billion in 2002—a 33.6% increase. The survey also found that the ICT industry contributed approximately 7% to the nation’s gross domestic product in 2000. Hardware and telecommunications comprise the bulk of the ICT market, with shares of 38% and 35%,
respectively (see Table 1).
Table 1. Total ICT Market Breakdown, 2000
ICT Subsector Market Share (%)
Hardware 38
Telecommunications 35
IT Services 14
Software 11
On-line Digital Media and Other 2
Total 100
(Source: The Infocomm Development Authority (IDA) of Singapore. Singapore Infocomm Industry Survey, 2001 Summary Report, 2001.)
The Infocomm Industry Survey also found that the domestic ICT market was estimated at $11.5 billion in 2000, an 8.5% increase over 1999. Revenue contributions in the domestic ICT market in 2000 are broken down in Table 2.
Table 2. Revenue Contributions in the Domestic
ICT Market, by Subsector, 2000
ICT Subsector Market Share (%)
Telecommunications 48
Hardware 20
IT Services 17
Software 12
On-line Digital Media and Other 1
Other 2
Total 100
(Source: IDA, 2001.)
Table 3. Singapore ICT Market, 1998-2002 ($ Billion)
1998 1999 2000 2002 Percentage Change 1998-2000
Domestic 9.3 10.6 11.5 14.3 25.9
Export 8.1 9.6 10.8 15.5 91.4
Total 17.4 20.2 22.3 29.8 71.3
(IDA. Singapore Infocomm Industry Survey, 2001 Summary Report, 2001.)
Regulatory Environment
Singapore has one of the best telecoms regulatory environments in the world. The Singaporean telecoms sector was fully liberalized in April 2000, two years ahead of schedule. Prior to the sector’s liberalization, Singapore Telecommunications (SingTel) was the
only operator in the country providing domestic and international telephony services. In March 2000, the government issued a total of 58 licences to local and international companies to offer a full range of telecoms services. Restrictions on direct and foreign ownership for the sector were also lifted at
this time.
Singapore has embraced open market policy as a means of accelerating development and increasing efficiency. Competition in the telecoms sector has enhanced the range of services available in the market and has made prices more competitive.
The IDA, an agency under the Ministry of Information, Communications and the Arts, is responsible for the regulation, development and promotion of the telecoms industry in Singapore. The IDA was created in 1999 as a result of a merger between the
Telecommunications Authority of Singapore and the National Computer Board. The IDA is also responsible for fostering the liberalization of the sector. Since deregulation in 2000, the IDA has issued 140 licenses.
Singapore was among the first Asian countries to connect to the Internet and by early 2001, the country had the highest Internet penetration rate in the Asia-Pacific region. In June 2001, 1.9 million of Singapore residents were Internet dial-up subscribers,
representing an Internet penetration rate of almost 48%.
Table 4. Singapore Internet Market, June 2001
Dial-up Subscribers (number) 1 913 400
Internet Dial-up Penetration (percentage) 47.6%
Leased Circuit Subscribers (number) 3 900
(Source: IDA, August 2001.)
Three out of every five homes in Singapore had at least one computer and half of all households had access to the Internet in 2000. A study released by Angus Reid in 2000 ranked Singapore tenth in the world in terms of Internet usage.
Internet awareness in Singapore is almost 100%. The Internet is publicly accessible everywhere in Singapore, including schools, community centres and Internet cafes. A total of 57% of Singapore’s Internet users are males aged between 20 and 29. Singaporeans
over the age of 50 make up 5% of Internet users. Internet usage is lower among those who do not have a good command of the English language.
Singapore’s Internet service provider (ISP) market was opened to full competition in October 1998. Prior to liberalization, SingTel, Cyberway and Pacific Internet were the only ISPs operating in the market. In September 2000, there were 28 licensed ISPs in
Singapore. Licenses are valid for three years and renewable for another three. ISPs must receive IDA approval for pricing and meet certain minimum quality of service levels including 99% network availability and 95% dial-up availability. ISPs must also process dial-up applications with three days and leased
lines within a week.
In 2000, SCV launched Max Online, an Internet TV service whereby their subscribers could access the Internet and send e-mails via their TV sets with their cable service. At the end of 2001, MaxOnline had more than 80 000 subscribers. SingTel offers a similar
service called iTV through its broadband ASDL network. iTV trials began in the last quarter of 2001 and was offered to some 300 resident homes for a trial period of six to eight months.
Broadband
Singapore has an island-wide broadband infrastructure with multiple access options including asymmetric digital subscriber line (ADSL), cable and integrated services digital network (ISDN). Almost 100% of homes and businesses in Singapore have access to
broadband infrastructure. In February 2001, there were an estimated 275 000 broadband users, up from 100 000 in 1999. The number of Singaporean broadband subscribers is forecast to reach 1.3 million by 2005.
Table 5. Internet Access by Technology, 2001
Technology Usage (Percentage)
Fixed-line Modem 91.4
Mobile Phone Modem 0.2
Cable Connection 6.6
ADSL Line 0.5
ISDN Line 0.3
Others 0.1
(Source: Paul Budde Communications. Singapore–Internet, High-Speed Networks and E-Services, April 2002.)
Singapore One, the country’s nationwide high-speed Internet broadband network, is the first of its kind in the world. The network, launched in 1997, is available to 99% of local homes, offices and schools with connectivity to interactive multimedia
applications and broadband service. Singapore One offers high-resolution video images and stereo sound. Services are delivered via an asynchronous transfer mode (ATM) backbone called I-Net that mirrors the fixed-line network to two different local access infrastructures using ADSL and cable modem technology.
The cost of Singapore One is five times as much as a dial-up Internet connection.
SCV launched its cable modem service in early 2000 for high-speed Internet access and non-stop, on-line connection via personal computer or television set. SCV’s cable infrastructure uses Singapore One’s network. SVC’s island-wide broadband cable network is a
potential alternative to the pre-existing local loop and the only system that can compare to SingTel’s local loop. As of April 2001, SCV had spent $929.2 million on its broadband network. In 2001, SCV had 78 000 cable modem subscribers.
Singapore was the first country in the world to launch digital subscriber line (DSL) services. SingTel launched Magix, its ADSL interactive on-line service in December 1997. Magix offers SingTel customers the Internet at 200 times the speed of dial-up access
and several other features including news-on-demand, movies, video games and videoconferencing. SingNet and Pacific Internet have also launched high-speed Internet services using ADSL technology.
IDA Broadband Survey
According to the IDA’s Survey on Broadband Usage in Singapore published in 2002, approximately 34% or 950 000 of Singapore residents over the age of 10 were broadband users in 2001.
According to the IDA broadband survey, ADSL is the most popular type of connection and is used by 40% of Singapore’s broadband users, followed by local area network (LAN), with 32% and cable modem with 29% (see Table 6). The majority of survey respondents
engaged in a total of 10 hours or less of broadband access per week, or slightly over one hour per day. The survey also found that the most frequently used broadband applications were e-mail (96%) and information retrieval and searches (86%). Instant messaging, music downloads, on-line games and movies are
gaining popularity in the market. In 2001, 14% of broadband users made on-line banking transactions and 12% shopped on-line.
Table 6. Access Connection Modes Used by Broadband Users, 2001
Broadband Access Connection Mode and Percentage of Total Broadband Users
ADSL 40
LAN 32
Cable Modem 29
ISDN 6
Leased Line/ATM Link 3
Wireless LAN 3
Total 113*
* Some broadband users access more than one connection mode; therefore, the numbers to not add up to 100%.
(Source: IDA. Survey on Broadband Usage in Singapore, 2001, 2002.)
E-commerce
Singapore has emerged as an e-commerce leader in the Asia-Pacific region. E-commerce has been vigorously promoted by the government since 1996. A series of programs and initiatives have been launched by the government to ensure its success. Singapore’s
e-commerce landscape is vibrant. An estimated 20% of Singapore’s small and medium-sized enterprises and an estimated 10% of Singapore’s 200 top companies engage in e-commerce as a business tool. Factors hindering the growth of e-commerce in Singapore include low confidence in on-line financial transactions
and the high cost of setting up an e-commerce-enabled site.
Singapore is ranked first globally for online theater and movie ticket purchases. One-third of the country’s Internet users purchased tickets on-line in the first quarter of 2002. Business-to-business e-commerce (B2B) is the predominant type of e-commerce in
Singapore. B2B in Singapore often involves multinational companies that have selected the city-state as their regional headquarters or logistical centre. Singapore is also home to the three leading B2B e-procurement and marketplace technology players: Ariba, i2 and CommerceOne.
IDA Quarterly E-Commerce Survey Findings
The IDA releases a quarterly e-commerce survey, which polls 2000 companies and has an estimated margin of error of approximately 5%. The IDA found that Singaporean companies generated 18% of their total sales from B2B e-commerce and 16% of their total sales
from business-to-consumer (B2C) e-commerce in the second and third quarters of 2001. These rates are higher than those in other Asia-Pacific e-commerce-enabled countries, specifically Australia, Hong Kong, Taiwan and South Korea. The IDA estimated that the total e-commerce market in Singapore was valued at
almost $100 billion in 2001, based on numbers tallied in the first three quarters of the year. According to the survey, B2B e-commerce sales revenues in Singapore totaled $96.4 billion in 2001, compared to $79.2 billion in 2000 and $44.4 billion in 1999.
Wholesale and retail accounted for 38.9% of B2B transactions while finance and banking accounted for 34.7%. The wholesale and retail sector had the highest growth rate in the B2B sector, with a 68% growth rate in the first three quarters of 2001. However, the
manufacturing sector experienced a 45% drop due to Singapore’s recession that year and its impact on the electronics sector, which is the country’s leading manufacturer and key to its economy.
According to the IDA, B2C sales in Singapore were valued at an estimated $2.2 billion in 2001, more than double the estimated sales of $1 billion in 2000 - which itself was a fivefold increase over 1999.
E-Business
Singapore has been identified as an e-business market leader alongside other countries including Canada, the United States, the United Kingdom, Australia and Hong Kong. Singapore is positioning itself to be a trusted e-business hub in the Asia-Pacific region.
Singapore is currently the region’s e-business hub for Dell, Compaq and Hewlett Packard — three of the world’s top hardware manufacturers. In terms of telecommunications connectivity, aside from its nationwide broadband network infrastructure, Singapore has 21 Tbps of installed international capacity,
sufficient for every e-business need.
E-business trends in Singapore are especially relevant to medium and large companies that are beginning to realize the value of offering their services on line. Several of Singapore’s large companies have developed e-business plans to lower their operation
costs and to offer better customer service to their clients. Singapore Airlines has recently launched an e-business strategy that includes e-ticketing and messages to alert customers of flight times via e-mail or short messaging service (SMS).
When e-business strategies were first introduced to the Singapore market, many companies rushed to establish Internet models. Since the dot.com meltdown, Singapore companies have taken a more cautious approach on e-business implementation. Most of Singapore’s
companies with e-business strategies focus on the following three key elements:
1. the use of e-commerce to complement their services rather than replace their existing infrastructure;
2. the implementation of e-business strategies to improve customer service and lower cost of operation; and
3. the use of back end integration to ensure successful implementation. In the current, fast-changing economic environment, businesses are increasingly working at keeping up with their investment in e-business infrastructure and back-end integration to remain competitive.
E-business Services
The e-business services market in Singapore is gaining momentum. Several international firms players including Scient, Microsoft, Siemens, Icon Medialab, Netdecisions, Mercatela, Web Connection and Netcel360; and local players including Aretae Interactive,
Adroit Innovation and Xchange21 are employing e-business strategies in Singapore.
Singapore’s Internet data centre market is beginning to emerge and is expected to reach $283.5 million in 2005. Internet data centres are becoming increasingly popular because of the range of services they provide including hosting and co-location services and
core infrastructure management for corporate customers on an outsource and managed service model. The top players in this market are SingTel, Digital Centrix and 1-Net and a most recent new entrant of Keppel Digihub.
E-business Infrastructure
E-business infrastructure deals with the products and services needed to create an Internet protocol (IP)-based backbone. The subsector involves network and hosting services, Web management, transactions processing and end-user networking.
Key Factors Shaping Market Growth
Factors contributing to the growth of ICT in Singapore include a high literacy rate, high Internet penetration, a vibrant economy, high purchasing power parity, a well-developed telecommunications infrastructure, a strong labour force and active government
support.
The local telecommunications industry has been deregulated and the country’s geographic location, combined with its cosmopolitan population, makes Singapore ideal for introducing new technologies. The government’s aggressive promotion of ICT in the work place,
school and home, coupled with the increasing use of computers and the Internet, are key drivers for sustained growth in the demand for ICT products and services.
Singapore has a pool of 100 000 ICT professionals. This pool is expected to grow to 250 000 by 2010. Singapore will train and attract more than 5 400 ICT specialists in the next 3 years, with specialized skills in networking, Internet technologies, signal
processing and wireless communications.
Government Initiatives
The Singapore government has created opportunities for industry collaboration through initiatives that promote Singapore as a living lab for technological developments and that build a conducive environment for ICT partnerships.
The Singapore government is turning the country into a wireless technology test-bed and a launching pad for wireless development in Asia and the rest of the world. The IDA’s Wired With Wireless Programme is aimed at promoting growth in the wireless sector and
the development of exportable products and services for Singapore-based companies. One of the Program’s features is the Overseas Business Centre Initiative, which seeks to address the technology development and market access needs of the Singapore wireless industry by providing a platform for collaboration
between local and foreign ICT players. The IDA has identified m-commerce as one of the key areas under the Wired with Wireless Programme. Other key areas of the Program include location-based services, mobile workforce management, wireless payment solutions, wireless tourism applications and wireless
multimedia.
The IDA and the Singapore Productivity and Standards Board have put in place the e-Business Industry Development Scheme (eBIDS). This $25 million incentive program aims to promote and accelerate the increase in on-line adoption by companies, e-commerce
transactions and total e-commerce value for Singapore. eBIDS targets companies that already have e-commerce capabilities but wish to expand their e-business strategy. The IDA will fund companies proportionately, based on the total e-commerce revenue generated, up to a maximum of S$500 000 ($428 900). The
funding is tied to the actual on-line transaction value brought about by the proposed project, and is limited to one e-business project per year per company.
In 2001, the government increased funding for its Pilot and Trial Hotspots (PATH) scheme from $6.9 million to $41.1 million. PATH aims to support the development of wireless technologies and applications in the country. Over the next two years, the expanded
PATH will also support pilots and trials in the broadband industry and emerging software technologies and services.
The government also launched the e-Business Savviness Programme in 2001. Under this program, owners of small and medium-sized enterprises and non-ICT professionals may receive funding of up to 50% of IDA-approved course fees (capped at $1700) for each training
program they complete. Courses approved by the IDA include e-business management programs offered by the National University of Singapore and the Singapore Chinese Chamber Institute of Business. The IDA has earmarked $3.4 million for this program through 2006 and hopes expects it will attract 4000
applicants. To further foster entrepreneurship and innovation in Singapore, the Economic Development Board launched the Startup Enterprise Development Scheme, or SEEDS, in October 2001. SEEDS is a $44.2 million equity co-financing scheme which aims to help launch 200 start-ups in its first phase. As of April
2002, a total of $4.5 million had been invested in 20 start-ups. Of these companies, 10 have foreign investors or founders, hailing from the United States, Ireland, Japan, China, Taiwan, Korea and Australia.
Opportunities
According to the IDA, the top five growth areas in Singapore’s ICT sector in 2001 were e-commerce/e-business, Web/Internet design and development, IT outsourcing, mobile and wireless communications, and customer relationship management.
The IDA has identified storage, security, CRM and Internet-related software as the best software prospects in Singapore. As Singapore’s business community and government continue to implement e-business strategies, there will be an increasing demand for
e-commerce software, hardware and services including SCM, ERP and CRM.
Opportunities exist for foreign-based companies to form partnerships with local firms as well as offer intermediary services as e-commerce develops in the country.
While the current market for wireless devices and technologies may appear to be saturated, Singapore still has significant room for growth in terms of new emerging technologies like GPRS and 3G. The convergence of voice, data and multimedia power on mobile devices is set to unleash
dramatic new avenues for revenue, propelled by increasing access speeds. Ample opportunities exist for foreign companies to partner with local mobile operators and enterprises looking for partnerships to develop innovative and creative data content for GPRS networks and, eventually, 3G networks. The large
increase in the number of mobile devices in the market in the coming years creates a large market for content and multimedia applications, as well as wireless communications via Bluetooth and WLAN technologies.
Actual and Planned Projects
Despite the global economic downturn, the telecom industry continues to see an increase in the number of international Facilities-Based Operators (FBOs) and Service-Based operators (SBOs) in Singapore. There are now over 30 FBOs and over 290 SBOs licensees as
of January 2002. The projected capital investment from FBOs and SBOs for the next 2-3 years is estimated at $2.3 billion. Of this $1.1 billion will come from FBOs, while the remainder will originate from SBOs licensees. The projected capital investment from FBOs over the next 5-6 years is even higher,
estimated at about $1.6 billion.
By June 2002, StarHub and SCV merged into one company, with SCV being a wholly owned unit of StarHub. The merged company’s shareholders are Singapore Technologies Telemedia, NTT Communications Corporation (Japan), Media Corporation of Singapore, British
Telecommunications and Singapore Press Holdings. The merger created a national communications, broadband Internet and cable TV provider that will pose a definite threat to SingTel, the current market leader.
COMPETITIVE ENVIRONMENT
Local Capabilities
Exports accounted for over 48% of total ICT revenues in 2000. Hardware comprised the bulk of exports, at 57% (see Table 7).
Table 7. ICT Exports, by Subsector, 2000
ICT Subsector and Percentage of Exports
Hardware 57
Telecommunications 21
Software 10
IT Services 11
Other 1
Total 100
(Source: IDA, 2001.)
Deregulation of the market poses a threat to SingTel and StarHub, which have invested billions of dollars into their networks.
International Competition
Singapore imports most of its ICT products and services. The Singapore government is keen to attract prominent foreign high-technology firms to the market, and offers them start-up tax-relief periods, low corporate taxes, grants for research and development
and manufacturing, and staff-training funds as incentives. Many multinationals are attracted to Singapore as a manufacturing base, as well as it being an ideal location for establishing marketing, distribution and servicing centres to serve the Asia-Pacific region. In fact, over 100 multinational ICT
companies, including IBM, Compaq, Microsoft and Hewlett-Packard, have chosen to make Singapore their base for activities such as manufacturing, software development, research and development, and distribution.
Foreign Direct Investment
The Singaporean ICT market is fully deregulated and all restrictions on direct and indirect foreign ownership of local telecoms firms were lifted in March 2000. The ceiling for foreign ownership prior to liberalization was 49%.
Since deregulation, the IDA has aggressively encouraged global ICT firms to open regional and global offices in Singapore. Singapore’s Operating Headquarters Program welcomes foreign companies into the country by giving them incentives—including reduced
taxes—to establish a regional headquarters in the country.
The IDA currently imposes a maximum direct foreign equity limit of 49% on all major public telecoms service licences. The maximum indirect foreign equity limit on the local partner is also 49%. Therefore, at present, the effective maximum foreign equity limit
on these licencees is 74%. The only exceptions are the Internet access service providers and Internet exchange service providers, for which the foreign equity limit was lifted in 1999.
In 1999, the Singaporean government passed the Competition Code, removing foreign equity limits on telecoms infrastructure.
MARKET SEGMENTS
Described by many as the “intelligent island,” the densely populated country—with 4 million inhabitants—has long been a regional hub for information and communications technologies (ICT). Singapore’s information technology (IT) market has the highest growth in
the Asia-Pacific region and is expected to experience a 13.2% annual growth rate from 2000 to 2005. Government support has been crucial in Singapore’s rapid adoption of new technology products and services. Government authorities have put their own services on line, created abundant business incentives and
steadily adapted laws and regulations.
Increasing fears of hacking and other unauthorized intrusions has led to a boom in demand for Internet security software, anti-virus software and mobile security software in Singapore and globally. The Asia-Pacific region is the fastest-growing region for
security software, with revenues growing an estimated 32% annually between 2000 and 2005.
Current prominent e-business security threats in Singapore include theft and damage to electronic data, sabotage of industrial computer systems, offences against intellectual property, access violations and business interruption and service denial caused by
viruses. These threats are expected to be more rampant as more businesses and individuals establish an on-line presence and as technology becomes more sophisticated. Furthermore, in 2002, there were an increased number of high profile incidents involving on-line banking theft.
The Ministry of Law reports that computer crimes rose from one case in 1993 to 127 cases in the first six months of 2000. Common crimes include the cloning of mobile devices and hacking.
Singapore’s network and data security market grew an estimated 6.1% in 2001- 2002. Security products and services will be considered the most pressing IT initiative in need of funding in 2003.
Singapore has been identified as an e-business market leader alongside other countries including Canada, the United States, the United Kingdom, Australia and Hong Kong. Singapore is positioning itself to be a trusted e-business hub in the Asia-Pacific region.
Singapore’s e-commerce landscape is vibrant. An estimated 20% of Singapore’s small and medium-sized enterprises and an estimated 10% of Singapore’s 200 top companies use e-commerce as a business tool. One of the major factors hindering the growth of e-commerce
in Singapore is low confidence in on-line financial transactions.
For e-commerce to prosper, it is fundamental to create an environment of trust, predictability and certainty that protects consumers against fraud and abuse. To quell consumers' fears about data privacy and security assurance, which inhibit on-line
transactions, the Infocomm Development Authority of Singapore (IDA) is spearheading a number of e-commerce security initiatives that will help boost on-line security, including cryptography, smart cards, biometrics, digital rights management, digital certificates and the underlying PKI infrastructure.
The Singapore government is considering new technologies such as biometrics to enhance airport security.
At 10%, Singapore has the highest uptake of biometrics and smart card use in the Asia-Pacific region. Potential factors hindering the use of biometrics in Singapore include privacy issues and resistance from consumers.
Singapore’s VPN market was valued at $11.5 million 1 in 2001; it is expected to reach $111.5 million in 2004 and $201.5 million in 2008. VPN services are offered by SingTel and StarHub, as well as global players including Equant, WorldCom and Global One. VPN
services in Singapore are used primarily in the banking and finance sectors but are expected to expand into manufacturing, construction, retail and distribution.
Government Involvement
Singapore's IT industry and financial institutions have worked in partnership with the government to develop legislation and infrastructure services such as trust and security systems, directory services, on-line-payment systems and other intermediary
e-commerce services.
The Singapore government has responded to the rise in cybercrimes by implementing legislation that is backed up by strict enforcement and severe penalties imposed by the justice system. The central law dealing with cybercrimes is the Computer Misuse Act. Under
the Act, police have extensive power of investigation and may recommend harsh penalties, including hefty fines and years of imprisonment.
The Electronic Transactions Act (ETA) was enacted in 1998 to provide the legal framework for e-commerce transactions including the recognition of e-signatures through the use of digital certificates. The IDA has licensed ID.Safe and Netrust as official
certification authorities. It is estimated that as of mid-2002, 4000 digital certificates were issued. Digital certificates issued to private and individual consumers by these authorities have been audited and comply with stringent standards, are trustworthy and legally binding under the ETA.
In 2001, the government formed the National Trust Council, an industry-led organization that is responsible for creating a secure e-business environment. In the same year, the industry launched TrustSg Web Mark, a symbol that is displayed on all web sites of
companies that have met certain national standards and codes of practice.
Security concerns regarding financial transactions over a wireless network have been an obstacle for mobile-commerce (m-commerce) development in Singapore. With the support of the IDA, several security solution vendors have been working with the country’s
mobile operators and payment platform providers on trial solutions. The advent of GPRS and third-generation services is expected to renew interest in m-commerce.
In October 2002, The Public Key Infrastructure (PKI) Forum Singapore in collaboration with a government linked company, CrimsonLogic launched the PKI Tehnology Centre to promote the development and adoption of PKI among potential users in Singapore. The centre
offers a ready PKI trial environment for businesses and is open at no cost to any company or enterprise who wants to test bed a PKI solution before commercial deployment.
OPPORTUNITIES
The Singapore government’s objective is to transform the country into a global ICT hub with a thriving Internet economy by the year 2010. Pursuit of this objective is a key driver in the demand for technology products and services. The government’s active
promotion of technology in the private sector, academia and the home, the rising use of computers and the Internet, the popularity of e-commerce, the unprecedented number of Internet-based viruses and heightened awareness for security will stimulate the demand for computer security software in Singapore.
There are lucrative opportunities for several security software genres including firewalls, VPNs and anti-virus solutions. Emerging markets, including WLAN, biometrics and data management software, also present good opportunities. Other areas of opportunity
include identification and authentication, intrusion detection and vulnerability assessment, secure content management and integrity software.
To ensure business continuity in the event of a cyber attack, disaster recovery (DR), DR planning, data recovery and backup solutions and services are also becoming an important element of IT planning in many medium and large size organizations. In addition,
the Singapore government has recently announced its plan to position the country to be a DR hub, the scope of business opportunities for DR and storage solutions are therefore not limited to the local demand for security systems.
Advancing beyond the security intrusion detection and monitoring solutions, a new opportunity lies in IT security management solutions emerging from the need to transform raw security data into information that can be used to quickly diagnose and correct
security problems.
The recent establishment of the first PKI Technology Centre in Singapore is expected to accelerate the development and adoption of PKI by commercial establishments and consumers.
Despite security concerns, Singaporean companies are increasingly computerizing and establishing an on-line presence. Fear of security breaches and the potentially disastrous consequences will motivate firms to purchase security solutions.
As Singapore’s business community and government continue to implement e-business strategies, there will be an increasing demand for advanced security technologies.
Several government agencies, including the Ministry of Trade, the Ministry of Defence (MINDEF), the Ministry of Trade and Industry and the Monetary Authority of Singapore, are notably concerned about unauthorized access to sensitive information. Such agencies
would be interested in advanced security technologies including access control and security software. MINDEF recently installed a fingerprint recognition system to prevent unauthorized access to an underground ammunition bunker. Biometrics systems are expected to be the MINDEF’s preferred access control
method.
The forthcoming construction of a third terminal at Singapore’s Changi Airport will present potentially lucrative opportunities for advanced security technologies. Tenders for security hardware and software including access control systems and biometrics are
expected to be announced by early 2003. Tender notices will be posted on the Government Electronic Business System (GeBIZ)’s website at http://www.gebiz.gov.sg.
Recent acts of terrorism around the world have influenced major corporations and government organizations to purchase access-control systems. Many companies, particularly multinationals with regional headquarters in Singapore, are installing VPNs as a means to
deter unauthorized access to their IT infrastructure. Demand for VPNs are expected to increase through 2008.
A recent survey revealed that Singapore-based companies consider IT security to be a high priority. As a result, they are highly likely to consider using external services through 2005.
KEY PLAYERS
Singapore imports most of its technology products and services. The Singapore government is keen to attract prominent foreign high-tech firms to the market, and offers them start-up tax-relief periods, low corporate taxes, grants for research and development
and manufacturing, and staff-training funds as incentives. Many multinationals are attracted to Singapore as an ideal location for establishing manufacturing, marketing, distribution and servicing centres to serve the Asia-Pacific region. In fact, over 100 multinational ICT companies, including IBM, Compaq,
Microsoft and Hewlett-Packard, have chosen Singapore as their base for activities such as manufacturing, software development, research and development, and distribution.
Local firms have been successful in developing their capabilities in software development and integrating it into total security systems. Sensecurity, a local Internet and network security software company, received a $773 200 grant from Infocomm Investments
(a subsidiary of the IDA) to further develop its products. Other prominent local advanced security technology firms includeTrustAsia and e-Cop. net.
Singapore depends heavily on imports for its software requirements. Software firms from the Unites States have a major share of the security software market. Other prominent security software companies are from Israel and Taiwan.
The most prominent companies in the security software market include CheckPoint from Israel and Symantec, Trend Micro, Computer Associates, RSA, IBM and Internet Security Systems from the United States.
Singapore is striving to be the world leader in e-government and has developed an integrated and cohesive approach to the computerization of the public service. By 2002, the Singapore government aims to make virtually all of its more than 1000 services
available on-line. A total of $1.3 billion has been earmarked to achieve e-government success in the country.
The Singapore Economic Development Board has identified security software as having good growth potential as an area of competence for local firms.
The Singapore advanced security technologies market is currently dominated by U.S., Israeli and Taiwanese vendors. However, opportunities exist for other suppliers with niche technologies in the following areas:
• Biometrics systems;
• Privacy Protection Technologies, especially as it relates to e-Government implementation;
• Security solutions for industry verticals such as the financial sector (especially internet banking); and
• Location based and asset tracking technologies which enhance citizen security such as monitoring of school children, dangerous cargoes and emergency calls are niche areas with real potential.
END USERS
Singaporeans in general have a rapid uptake of technologies—regardless of their income level. Indeed, personal computer (PC) and mobile phone ownership and Internet access are no longer luxury items but common resources.
Singapore’s very sophisticated consumer base is quick to adopt new technologies products and services. The level of awareness, acceptance and adoption of technology among Singapore’s general public and business community is among the best in the world. The
country’s PC use and Internet access penetration rates are on par with other developed countries, including Canada and the United States.
Internet awareness in Singapore is almost 100%. According to the Survey on Infocomm Usage in Households, 2000, 60% of Singaporean homes had a computer in 2000, 50% of which had an Internet connection. The survey also showed that 23% of homes with PCs had more
than one. As well, the Internet is accessible to the public everywhere in Singapore, such as at schools, community centres and Internet cafes. A total of 57% of Singapore’s Internet users are male, aged between 20 and 29. Singaporeans over the age of 50 make up 5% of Internet users. Internet usage is lower
among those who do not have a good command of the English language.
Brand recognition, price and quality are the most important factors in determining a Singaporean buyer’s preference for advanced security technologies.
In a recent International Data Corporation survey of Singaporean IT managers, 25% of respondents indicated that they were seriously evaluating biometrics and smart cards for their enterprise over the next two years. The survey revealed that telecommunications
and finance firms are the Singaporean industries most likely to adopt biometrics.
Singapore’s government adopts the fundamental principles of fairness, openness and competitiveness for its government procurement policies. Tenders are usually awarded to the bid that brings best value for money for the public sector. Tender notices are posted
on the Government Electronic Business System (GeBIZ)’s Web site, http://www.gebiz.gov.sg. GeBIZ also contains information on tender schedules of offers received and tenders awarded.
Foreign companies will find it advantageous to work with a local partner or a foreign company who is well established locally in pursuing IT projects in Singapore. Most IT security project managers prefer to deal with companies who are able to advise and offer
an end-to-end solution for their security requirement. Strong local after sales support is often a pre-requisite for a vendor to be qualified for IT security projects. Defense related projects which require access to confidential database information are usually awarded to government linked companies.
Foreign companies interested in such projects are advised to collaborate with these companies in offering their solutions.
As in many other parts of Asia, guanxi (roughly translated as “contacts”) are considered a vital element of successful marketing in Singapore. The right guanxi can facilitate networking with key participants in the market and can help foreign firms familiarize
themselves with local business customs. Guanxi can also ensure that sufficient after-sales service is provided to end users.
It is strongly advisable to convert prices into local currency when promoting products and services in Singapore. All documentation, including operation manuals and other usage instructions, should be presented in English.
KEY FACTORS TO CONSIDER
Singapore maintains one of the most open economies in the world. The city-state is essentially a “free port,” with most sectors remaining exempt from tariff and non-tariff trade barriers. There are no customs duties on technology products imported into
Singapore. However, imports are subject to a 3% goods and services tax.
There are no import taxes or duties on security equipment in Singapore.
Domestic laws protecting intellectual property against piracy and copyright infringement are adequately enforced and adhered to in Singapore. Intellectual property is protected through copyright legislation enacted in 1987, the 1991 Trademark Law, the 1994 Patent Law and the Trade
Related Intellectual Property standards. Singapore is also a signatory to the Paris Convention for the Protection of Industrial Property, the Patent Co-operation Treaty, the Budapest Treaty and the World Intellectual Property Organization.
====
Singaporean Government Contacts
Agency for Science, Technology and Research
The Alpha, 10-01/03
10 Science Park Rd.
Singapore, Singapore 117684
Tel.: (65) 6779-7066
Fax: (65) 6779-8061
Internet: http://www.ncb.gov.sg
International Enterprise of Singapore
Bugis Junction Tower
230 Victoria St.
Singapore, Singapore 188024
Tel.: (65) 6337-6628
Fax: (65) 6337-6898
Internet: http://www.tdb.gov.sg
Ministry of Information, Communications and the Arts
140 Hill St.
MITA Building, #02-02
Singapore, Singapore 179369
Tel.: (65) 6270-7988
Fax: (65) 6837-9480
Internet: http://www.mita.gov.sg
Ministry of Defence (MINDEF)
Gombak Drive
Singapore, Singapore 669645
Tel.: (65) 6760-8844
Fax: (65) 6764-6119
E-mail: mfu@starnet.gov.sg
Internet: http://www.mindef.gov.sg
Economic Development Board
Raffles City Tower, 24-00
250 North Bridge Rd.
Singapore, Singapore 179101
Contact: Boon Heon Tan, Health Industry Officer
Tel.: (65) 6336-2288
Fax: (65) 6336-6077
Internet: http://www.sedb.com
Infocomm Development Authority of Singapore (IDA)
8 Temasek Blvd.
Suntec Tower Three
Singapore, Singapore 038988
Tel.: (65) 6211-0888
Fax: (65) 6211-2222
E-mail: info@ida.gov.sg
Internet: http://www.ida.gov.sg
Information Technology Institute
11 Science Park Dr.
Singapore Science Park II
Singapore, Singapore 118253
Tel.: (65) 6778-9374
Fax: (65) 6777-3043
Registry of Trademarks and Patents
Plaza by the Park, 04-01
51 Bras Basah Rd.
Singapore, Singapore 189554
Tel.: (65) 6330-2720
Fax: (65) 6339-0252
Internet: http://www.gov.sg/molaw/ipos/index.html
Ministry of Foreign Affairs
Raffles City Tower, 07-00
250 North Bridge Rd.
Singapore, Singapore 179101
Tel.: (65) 6336-1177
Fax: (65) 6339-4330
Internet: http://www.mfa.gov.sg
Ministry of Trade and Industry
100 High Street #09-01 The Treasury
Singapore, Singapore 179434
Internet: http://www.mti.gov.sg
National Computer Board
NCB Building
71 Science Park Dr.
Singapore, Singapore 118253
Tel.: (65) 6778-2211
Fax: (65) 6779-5340
Singaporean Industry Contacts
Association of the Telecommunications Industry in Singapore
Suntec Tower One 7
12-12, Temasek Blvd.
Singapore, Singapore 038987
Tel.: (65) 6883-0200
Fax: (65) 6883-0210
Internet: http://www.atis.org.sg
Singapore Computer Society
53/53A Neil Rd.
Singapore, Singapore 088891
Tel.: (65) 6226-2567
Fax: (65) 6226-2569
E-mail: scs.secretariat@scs.org.sg
Internet: http://www.scs.org.sg
Information Technology Management Association (ITMA)
c/o Accenture Pte Ltd
No. 2 King's Dr.
Singapore, Singapore 266369
Tel.: (65) 6410-8923
Fax: (65) 6410-8088
E-mail: lai.yong.chee@accenture.com
Internet: http://www.itma.org.sg
Singapore Information Technology Federation (SITF)
55/55A Neil Rd.
Singapore, Singapore 088892
Tel.: (65) 6325-9700
Fax: (65) 6325-4993
E-mail: info@sitf.org.sg
Internet: http://www.sitf.org.sg
Readers who use this information for investment purposes do so at their own risk!
Opinions expressed are just that and not based on insider information or information
otherwise obtained illegally.
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