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Singaporeans have benefited from market liberalization in the
country's telecommunications industry. Prices for international calls
have fallen by 90 percent, while the international leased line rates
have been knocked down by up to 95 percent since the government
launched its full liberalization policy in 2000.
Competition does make a difference, and always points to the direction
of consumers.
"In the mobile market, with three players, no one is dominant. They
have roughly the same market share," the deputy chief executive and
director general for telecoms at the Infocomm Development Authority of
Singapore (IDA), Leong Keng Thai, told visiting Indonesian journalists
last Friday.
STT's Starhub and Malaysia Telecom's M1 had taken part of the mobile
market share previously controlled by SingTel. The IDA said it
initially imposed heavier regulations on SingTel to enable new players
to enter the market, which started with M1 in 1997.
The sector grew rapidly, booking S$45.4 billion in total revenue last
year, a 20 percent increase from the figure it recorded in 2005.
For that reason, when asked whether the cross-ownership of Temasek at
both Singtel and Singapore Technologies Media (STT), Singapore's top
telecom players, had hampered competition, Leong Keng said: "If they
were not that competitive, we wouldn't have felt the falling prices."
Good point. In Jakarta, however, the response to similar questions are
much different, with Indonesia's monopoly watchdog probing Temasek,
which indirectly owns stakes at Telkomsel and Indosat through SingTel
and STT, respectively.
Five years after STT, through Asia Mobile Holding, legally bought a
41.9 percent stake in Indosat from the Indonesian government, monopoly
watchdog the KPPU is launching an investigation into possible
violations of the 1999 Antimonoply Law for its cross-ownership at
Indonesia's two large mobile phone operators.
STT senior vice president for strategic relations and corporate
communications Kuan Kwee Jee has denied the allegations, pointing to
how STT and SingTel are competing against each other in Singapore's
telecom market.
She noted that Starhub had now surpassed M1, the second mobile licensee
after SingTel, which reflected how competition worked in the country.
STT said that Indosat was facing tough competition with Telkom,
Telkomsel, Excelcomindo and other operators and that it was upbeat the
allegation against Temasek would not be proven by the KPPU.
Indosat is the second largest mobile operator after Telkomsel in
Indonesia.
For STT, which said it faced tough competition in Singapore from
SingTel, under the supervision of the IDA, the KPPU allegation is
"annoying".
"We will not give up our investment in Indosat only because of false
statements and groundless allegations," Kuan Kwee Jee said.
Still, the Temasek-monopoly allegation, with all the media hype
surrounding it, is unlikely to fade away anytime soon.
Singaporeans may have enjoyed the fruits of competition, but
Indonesians, as told by the KPPU, surely have not. So, it's safe to
assume anything can still happen with Singapore's Temasek investment in
Indonesia's telecom industry.
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