Singaporean state investment group Temasek Holdings, through which the government holds a majority stake in the country’s number one telco Singapore Telecommunications (SingTel), has sold SGD2.12 billion (USD1.25 billion) worth of shares in the telco. The move has cut the state’s holding from 67% to 64.98%. The decision to sell the bonds was made after the government announced plans to fully privatise the company when it struck a free trade agreement with the US last May; the agreement came into effect on 1 January 2004. The transaction was arranged by investment bank Merrill Lynch & Co, which is likely to sell a further SGD203.8 million worth of bonds in the near future.
SingTel continues to dominate Singapore’s local telephony sector – despite it being opened up to competition in April 2000 – controlling 99.5% of local infrastructure at the end of September 2003. Its competitors have had more success in the international call market, where main rival StarHub managed to gain a market share of around 15% in 2002, but SingTel remained relatively unmoved by the threat of competition. In July 2002, however, StarHub announced plans for a merger with another rival in the fixed line market, Singapore Cable Vision (SCV), and the two companies began offering joint services immediately under the StarHub Cable Vision brand.
SingTel and StarHub/SCV are the only two Public Telecommunications Licensees (PTLs) in the country, although there are also 35 facilities-based licensees and 620 services-based operators. At the end of September 2003 there were 1.904 million local telephony lines in service, around 1.898 million of which were controlled by SingTel. This figure is down on that recorded at the same time the previous year, a fall which the regulator has attributed to the increasing popularity of mobile services. Both SingTel and StarHub have accordingly been concentrating on their mobile networks regarding them as having more potential. The economic downturn of 2003 which followed the outbreak of the SARS virus in the first quarter of the year also had an effect on the shrinking fixed line market, with the public being reluctant to spend money on new services.