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IDC
Predicts Growth for Singapore Telecom Services
The telecom services industry is expected to hit US$3.8b by the
end of 2002 and projected to exceed the US$4b mark in 2003 despite
downward pricing pressure with the high availability of bandwidth
in the marketplace.
In the traditional data network services market (including leased
circuit, frame relay, ATM, x.25 and ISDN), the leased circuit continues
to dominate in revenue terms followed by frame relay and ATM.
This market is projected to hit more than US$700m by the end of
2002, an expected year-on-year growth of 10%. Due to the large presence
of foreign and multinational corporations based in Singapore, the
revenue generated from international connectivity is higher than
branch-to-branch/remote access connectivity within the country.
The broadband market is highly price sensitive due to the flood
of IP service providers in 1999 offering free or dirt cheap Internet/IP
related services.
The total number of broadband access service subscribers is expected
to hit 270,000 by end of 2002 as against 1.8m dial-up access subscribers.
Cable modem is the dominant service in Singapore with an expected
140,000 subscribers (largely residential) by the end of this year.
ADSL is a close number two with a projected subscriber base of
130,000 by end of 2002.
Due to the late aggressive push of both cable modem and ADSL services
in Singapore, the uptake for metro Ethernet services is currently
very minimal, despite the high suitability of this technology for
Singapore. This service is currently available for corporate subscribers
only, competing with traditional leased circuit, managed network
data and IP-VPN services.
The market for IP-VPN services has experienced tremendous growth
over the last 12 months but none of the Asia/Pacific countries has
shown falling adoption levels of traditional data services.
IP-VPN services have thus been viewed as offering new revenue potential.
Nevertheless, the uptake has started to cannibalize the sustained
growth of these traditional services. Enterprises are first deploying
IP-VPN services for backup, remote access or site-to-site (for the
first time by SMEs) connectivity.
This market is expected to generate close to US$120m revenue from
IP-VPN connections, out of which international traffic is projected
to hit close to 80%. This will result in a forecasted year-on-year
growth rate of 87% over 2001.
"Given the maturity of the Singapore wireless market, currently
at a penetration of more than 80% (including prepaid and postpaid
subscribers), it is not expected to show substantial growth in subscriber
terms", said Sandra Ng, Vice President, Communications and
Peripherals. "Thus, the operators are very focused on increasing
ARPU (average revenue per subscriber/user) to generate revenue growth
moving forward. High literacy rates and spending power, coupled
with a high mobile phone churn rate appear to be the right ingredients
for mobile data to succeed in Singapore. All three operators will
be looking towards a twofold strategy of driving value-added services
and enhancing push-based services to increase APRU", she added.
The Singapore market is forecasted to grow by 10% or less (year-on-year)
in the next 2 years given the gradual economic recovery expected
and continuous downward pressure on pricing for many of the services.
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Products & Services 
