Journal of Interactive Advertising, Volume 4, Number 1,
Singapore is often touted by herself and others as an Intelligent Island. It has among the world’s highest internet penetration rate and it created the world’s first broadband network, Singapore ONE (One Network for Everyone). It also promulgated a set of rules that censored internet content.
This paper examines the development of broadband adoption in Singapore and to draw lessons that may be applicable to similar developments elsewhere. The pioneering experience of Singapore is also useful in providing lessons on mistakes to avoid.
The paper begins by recounting the government’s goal of using information technology (IT) for economic development as far back as the early 1980s. This was done in the face of the first recession in 20 years as an independent country. Government departments were computerised; IT courses were offered at the tertiary level to provide trained personnel; laws, especially on copyright, were updated. These infrastructural elements are probably essential to any country intending to deploy IT widely.
Seeing some early success in deploying IT, the government in 1990 conducted a broad-based study into deploying IT in the economy. Called IT2000, the study involved all economic sectors and placed IT on the strategic plans of all businesses. A few years after the study, the internet came to Singapore via the universities. The Singapore government was cautious in the use of the internet in part because it carried content that could not be controlled or censored. It only introduced the internet to the public after neighbouring Malaysia had made it available.
However, in typical Singapore style, once it got going, it got roaring support from the government. One such major thrust was Singapore ONE, which was the world’s first nationwide broadband network. It was an attempt to create a nationwide test bed for broadband applications. That is, applications that would run best on broadband could be tested on the Singapore ONE network. But the network did not develop into the test bed hoped for from its June 1998 launch and it has now morphed into a broadband network.
Meanwhile, telecommunications services around the globe were liberalizing and it was increasingly clear that Singapore had to follow suit. Singapore introduced competition to its government-controlled PTT several years ahead of schedule. Today, more than 250,000 subscribers access public broadband through three major ISPs and a cable television network. Corporations have much more choices: under the Open Access Policy, international players may ride on the existent broadband infrastructure to provide broadband service.
The downside of government support is government intervention. Market players grouse of administrative burdens and rules that sometimes inhibit business plans. Many players feel that the rules need to be liberalized further or they would stunt the country’s plans to be a regional IT hub. Another area that needs change is the almost-exclusively economic focus of IT use to the neglect of a focus on social and cultural impact.
Singapore is often touted by herself and others as an Intelligent Island. It has among the world’s highest internet penetration rate, thanks in part to aggressive investments in infrastructure. It also created the world’s first nationwide broadband network, Singapore ONE (One Network for Everyone). But it was also the world’s first country to promulgate a set of rules aimed at censoring internet content (Ang and Nadarajan 1996).
This paper examines the development of broadband adoption in Singapore and draws lessons that may be applicable to similar developments elsewhere. The pioneering experience of Singapore should also be useful in guiding comparable efforts.
In this paper, broadband is defined to mean high-speed internet access of more than 256Kbps through ADSL (asynchronous digital subscriber line), cable modem, wireless access and LAN (local area network) lines. Dial-up modem and ISDN access are not defined as broadband access.
The diffusion of broadband in Singapore has to be seen against the backdrop of its overall economic development goal of being a first-world nation. By some measures, Singapore has reached that goal: the per capita GDP (gross domestic product) was about $25,000 US in 2001 (CIA World Factbook 2003), which ranks it among the richest countries in the world. However, Singapore has been buffeted by economic storms from 1997. To maintain its economic well-being, Singapore is looking at higher value-added industries and the information-communication technology (ICT) area is one of them (Ang and Lee 2001).
ICT has been part of Singapore’s plans for national development, and two phases of the plans have been completed, with Singapore now in the third phase. In the first phase, from 1980 to 1985, the Singapore government introduced a national computerization program to support economic restructuring, starting first with the civil service. The second phase, from 1986 to 1990, extended the program to include multiple agencies. The third and current phase aims to use ICT to support Singapore’s long-term vision to become a developed country (Loh, Ang, and Hukill 2000).
Singapore began the push into ICT in the late 1970s and early 1980s. The national computerization push was part of a macroeconomic high-tech strategy to overcome the constraint of a small labor force under full employment and the dependence on unskilled foreign labor. The national computerization effort was trailblazing: no country before had attempted to introduce computerization on such a massive scale (Loh, Ang, and Hukill 2000).
The government started with itself. It established a Civil Service Computerization Programme (CSCP) to computerize the Civil Service in 1979. The Programme aimed to use computers to deliver better public service. The distinctive feature of the Programme was that computing power was decentralized to the ministries and computers moved from being a back-room utility to the front-end of being an integral part of the whole functioning of the Civil Service. It is this feature of computerization in the Civil Service that would eventually allow for the integration of the Civil Service with Singapore economy and society in a national electronic network environment (Loh, Ang, and Hukill 2000).
In 1981, the government created a statutory board, the National Computer Board, to continue the Programme. The Board was also tasked with coordinating computer education and training to ensure a steady supply of trained personnel and making Singapore a software development centre. In connection with this, IT courses were offered at the tertiary level to provide the trained personnel, and laws, especially on copyright, were updated (Loh, Ang, and Hukill 2000).
Seeing some early success in deploying IT, in 1990 the government conducted a study into deploying IT more broadly in the economy. After extensive consultation with the private and public sectors, the result was the IT2000 Masterplan report, which is a vision of an "intelligent island" based on the extensive use of ICT. The vision was that every home, office, and school in Singapore would be wired to an advanced nationwide information and communication infrastructure not only for an economic end but also for a higher quality of life (National Computer Board 1992).
A few years after the IT2000 Masterplan report was completed, the internet came to Singapore via the universities. The Singapore government was cautious in the use of the internet in part because it carried content that could not be controlled or censored. It only introduced the internet to the public after neighboring Malaysia had made it available (Ang and Nadarajan 1996).
In typical Singapore style, however, once the government decided that the internet was worth getting into, it gave it roaring support. In 1996, Singapore announced that it would become the world’s first country to be wired so that every home could have a broadband connection. The network was called Singapore ONE, which stood for One Network for Everyone. It was launched as the next step towards the development of the information infrastructure.
Singapore ONE is a nationwide multimedia broadband infrastructure jointly spearheaded by the Telecommunication Authority of Singapore (TAS), the National Computer Board (NCB), the National Science & Technology Board (NSTB), the Economic Development Board (EDB), and the Singapore Broadcasting Authority (SBA). The composition of the agencies is significant in highlighting the intent of the government. The regulators are present: the TAS regulates the technical aspects of telecommunications; the SBA regulates broadcasting as well as internet content. The technology promoters are present: the NCB and NSTB promote ICT and between them conduct some research as well. The investment promoter is also present: the EDB promotes investment, particularly by foreign companies, in the Singapore economy.
These, however, were the early days of broadband and the Singapore government recognized that. The intention was to get as many as possible to the network by having compelling applications. So S-ONE began as a nationwide test bed for broadband applications. That is, applications that would run best on broadband could be tested on the S-ONE network. In theory, consumers would then sign up for broadband so that they could use the applications.
It was envisaged that S-ONE would cover the entire island of almost 1 million households within five years of the launch and attract some 400,000 subscribers by 2001. The island has indeed been wired, but as of January 2001, the number of subscribers was 84,700 (Aizu 2002). There are several reasons for this.
First, to be fair, S-ONE was a bold experiment using the "field of dreams" approach of building it and they will come. In Singapore’s case, such an approach has worked for such massive infrastructure undertakings as the airport and seaport, both of which are world-class entities in their own right. However, when it came to broadband, the players did not appear; the handful of test applications that emerged were few and far between.
Second, S-ONE may have been a victim of the success of the internet. The network uses an ATM (asynchronous transfer mode) backbone to provide ATM users with broadband access through a high-speed ADSL modem or through cable modem (Singapore ONE 1997). Broadband technology was not mature then in 1997 and using ATM was more costly and complicated than using internet protocol (IP).
In a well-documented study, Aizu (2002) suggests that there were other non-technical reasons, the key reason being the lack of competition in the broadband market. A consortium, 1-NET, was set up to own and operate S-ONE. The company began to offer commercial access to broadband in 1997. The shareholders of 1-NET were the incumbent PTT Singapore Telecom (which held 30% of 1-NET), the monopoly cable television provider Singapore CableVision (30%), the telecommunications regulator TAS (10%) and two internet service providers Pacific Internet and Cyberway (15% each). The ISPs had decided to come in late in the day because it was not clear if 1-NET, by providing broadband access, would be their competitor. The ISPs had therefore joined 1-NET as a defensive move. However, because all of the three major ISPs (including Singapore Telecom’s SingNet) were in the same consortium, this meant that in those early days, there was no competition in broadband access in Singapore.
There was also no "killer application" on S-ONE to compel subscription. In 2001, as the subscriber target was not met, 1-NET modified its business plan into a multi-service provider including the running of data centers for government sites.
Meanwhile, the incumbent PTT Singapore Telecom (SingTel) and the monopoly cable television service provider Singapore Cable Vision (SCV) began to provide broadband access. Both of these government-linked companies owned the physical infrastructure.
The duopoly of the two GLCs in the early Singapore broadband market and their monopoly hold on the network left little room for competition. This lack of competition is probably a significant factor in explaining why South Korea has beaten Singapore in achieving a higher broadband penetration rate. In South Korea, competition has driven broadband access prices to $10 U.S. a month, which ranks among the lowest rates in the world and has helped the country to have the world’s highest broadband penetration rate (Chotrani 2002). Price is important. In Singapore’s case, broadband adoption rose dramatically between 2001 and 2002 because the subscription rate dropped from S$80 a month in 2001 to S$48 a month a year later (Chellam 2003).
In July 2000, SingTel did open its ADSL (asynchronous digital subscriber line) network to competition, and in September 2000, the SingTel subsidiary SingNet launched its public broadband service. A month later, rival ISP Pacific Internet launched a competing service. By that time however, it was too late for SingTel: the government saw the impact of the lack of liberalization on the Singapore telecommunications market.
Around that time, the Singapore government announced that it would advance the introduction of full market competition in the telecommunication sector from April 1, 2002. The direct and indirect foreign equity limits for all public telecommunication services licenses would be lifted ("Singapore Rushes" 2000).
As part of the liberalization of the telecommunications market in April 2002, and to attract more international broadband players into Singapore, the Information-Comm Development Authorities (a new entity formed through the merger of the National Computer Board and the Telecommunications Authority of Singapore) introduced the Open Access Policy. This policy enabled other ISPs using SingTel’s ADSL network or SCV’s cable network to provide broadband service to customers. The government felt that this policy would help to promote competition in broadband Internet access services, thus affording consumers with wider choice of Internet service providers ("Government may open SingTel" 2000).
In practice, however, the market is still not fully liberalized, with price and quality of service regulations for the service providers. In fact, even when there are announcements of market liberalization, the process can be slow. For example, SCV’s cable network was not open to competitors for technical reasons. But when the technical reasons were overcome, it took SCV the better part of nine months to allow open access on its network (IDA 2002a).
The world’s leader in broadband penetration is South Korea (see Table 1 below). Aizu (2002) suggests that Korea’s world-leading broadband penetration may be attributable to, among other things, the Korean culture of being in a hurry (pari-pari), a hands-off policy by the government, competition in the telecommunications market, Korean entrepreneurs who embraced the internet, as well as a stock market boom. Of these, Aizu suggests that Korean entrepreneurs played the leading role. They capitalized on the open telecommunications market and to some extent, were compelled to take risks because the 1997 economic crisis Korea experienced meant that traditional companies could no longer be relied on for jobs.
Table 1: Top 15 Economies by Broadband Penetration, 2002
In Singapore’s case, government intervention does appear to play a part in the initially slow uptake of broadband. Operators complain of regulatory and administrative burdens, and these regulations also reduce the flexibility of operators to develop targeted service packages.
Be that as it may, the number of broadband service providers has grown from two to 12 as of 2002. Access cost has decreased by as much as five times with the number of users growing more than four times in a year from 300,000 in April 2001 to 1.24 million in April 2002 (IDA 2002b). However, it should be noted that by users, the IDA also counts office workers who access the internet through LAN lines. As at January 2003, Singapore had 129,000 ADSL subscribers and 102,000 cable modem subscribers (IDA 2002a). By way of contrast, there were some 600,000 dial-up subscribers in 2002 (Chellam 2003).
An interesting feature of broadband penetration is that it does not correlate strongly with GDP. As Table 1 above illustrates, the pattern is not linear. The richest countries, the United States and Japan, do not have the highest broadband penetration. Instead, it is the medium-sized to smaller countries that seem to lead the pack. Table 2 below, which lists the internet penetration of selected Asian countries, suggests the lack of a correlation between internet and broadband penetration. Altogether, this lack of correlation suggests that there are also non-economic factors at play.
Table 2: Internet Penetration for Asia (% Of Country’s Population), 2000-2002
Source: NUA Internet Surveys (www.nua.com)
Aizu’s (2002) analysis left out the significant issue of content. Singapore is an English-speaking country and depends mainly on foreign broadband content and applications. The Singapore government has various programs to encourage local narrow band content providers to upgrade to broadband. But in the final analysis, the local content providers face fierce competition from U.S. and other English-speaking rivals. Moreover, the country’s small size makes it difficult for local content providers to enjoy economies of scale.
In contrast, because South Korea is a non-English speaking country, Korean consumers rely more on local content. It has been observed that the reliance on local content reduces "local consumption of international bandwidth, which has made it cheaper for local ISPs to transmit data and in turn, has enabled them to pass on the cost savings to local users" (Chotrani 2002).
So what lessons can be learned about how to diffuse broadband? The approach by the Singapore government to intervene in a top-down manner has worked in many areas. It is probably this confidence that has led it to attempt to jumpstart broadband diffusion in a similarly top-down manner. But the approach has not worked as well for broadband. It should be noted that not working as well in the current context still places Singapore among the top 20 broadband nations in the world.
Perhaps the most important lesson is that competition is essential for the technology to diffuse widely. In the Singapore case, competition lowered the price enough for the public to use it. In South Korea, competition spurred entrepreneurial activity that in turn spurred greater broadband use. In Singapore’s case, broadband use jumped after the telecommunications market was liberalized to allow new entrants.
The case of broadband has highlighted some weaknesses in the Singapore approach to deploying ICT for national development. By most accounts, Singapore has got the "hard infrastructure" right. That is, the physical networks can be rapidly rolled out in the compact island. But it is the soft infrastructure that is proving more problematic. On the one hand, there are areas in the soft infrastructure side that Singapore has succeeded in training skilled personnel and having up-to-date policies.
The downside of government support is government intervention. Market players grouse of administrative burdens and rules that sometimes inhibit business plans. Many players feel that the rules need to be liberalized further or they would stunt the country’s plans to be a regional ICT hub. Another area that needs change is the almost-exclusive economic focus on ICT use to the neglect of a focus on social and cultural impact.
So even as broadband use will undoubtedly increase, there is work ahead.
Aizu, Izumi (2002), A Comparative Study of Broadband in Asia: Deployment and Policy version 2, Paper presented at the Asian Economic Integration – Current Status and Prospects- Symposium hosted by the Research Institute of Economy, Trade and Industry on April 22, 2002 (Emailed by author in May 2002), <http://www.rieti.go.jp/en/events/02042201/report_1.html>.
Ang, Peng Hwa and Brian Lee (2001), Singapore, In Cyber Path to Development: Issues and Challenges in South Asia, Sandy Rao and Bruce Klopfenstein, eds., New Delhi: Sage, 159-182.
Ang, Peng Hwa and Berlinda Nadarajan (1996), Censorship and the Internet: A Singapore Perspective, CACM, 39 (6), 72-78.
Chellam, Raju (2003), More reaching for broadband, Business Times, 21 April.
Chotrani, Raj (2002), The broadband challenge, Computerworld, June, 8 (31), 14-20.
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Government may open SingTel, SCV networks to competitors: Open access to broadband system being considered to drive down cost (2000), Business Times, 27 March.
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Peng Hwa Ang is Dean of the School of Communication & Information, Nanyang Technological University. A lawyer by training, he teaches media law and policy in both the undergraduate and graduate programmes of SCI. He spent his sabbatical as a Fulbright Visiting Scholar and fellow at the Harvard Information Infrastructure Project, Kennedy School of Government in 2000 and as a visiting fellow in 2001 at the Programme in Comparative Media Law, Centre for Socio-Legal Studies, Oxford University. He has published and presented his research on internet law and policy. He is currently a member of both the main board and advisory council of the Internet Content Rating Association (ICRA).
Qian Zhou is a doctoral student at the School of Communication & Information, Nanyang Technological University. She obtained her Bachelor’s degree from the School of Journalism, Fudan University and her Master’s degree in mass communication from the School of Communication & Information, Nanyang Technological University.
Yayun Jiang is a media analyst at AC Nielsen, Shanghai. She obtained her Bachelor’s degree from the School of Journalism, Fudan University and her Master’s degree in communication from the School of Communication & Information, Nanyang Technological University.
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