Singapore

Telecoms and technology report

(Forecast closing date: September 20th 2011)
Total IT spend, international comparison
(US$ bn)
2006 a
4.9
463.5
115.6
48.7
74.5

Singapore
US
Japan
China
Germany

2007 a
5.7
505.6
118.3
60.6
84.3

2008 a
6.4
524.8
133.9
70.9
91.7

2009 b
6.2
505.8
131.1
80.6
81.4

2010 b
8.1
530.7
142.8
97.9
81.9

2011 c
10.1
558.2
154.4
117.8
81.7

2012 c
10.6
588.2
154.9
138.7
81.6

2013 c
11.0
618.8
157.1
169.5
83.0

2014 c
11.4
647.8
156.6
201.5
85.2

2015 c
11.8
678.2
156.1
239.5
87.3

a Actual. b Economist Intelligence Unit estimates. c Economist Intelligence Unit forecasts.

Sources: IDC; Economist Intelligence Unit.

Overview

Singapore has attained the status of a market leader in the telecommunications industry through the development of a high-quality and
progressive regulatory environment that has produced a highly competitive
market. The city state was placed eighth out of 70 countries in the Economist
Intelligence Units digital economy rankings in 2010.
Despite its small size, Singapore is also a leader in the information technology
(IT) sector. According to the Economic Development Board (EDB), around twothirds of the top 100 IT firms in the world have a presence in the island state.
The former telecoms monopoly, Singapore Telecommunications (SingTel),
continues to play a major role in the sector and is still majority owned by one
of Singapore's sovereign wealth funds, Temasek Holdings. But liberalisation
has led to the entry of a host of operators and has created a competitive
market.
Total IT (hardware and services) spending in Singapore as a percentage of
GDP is high compared with other countries in Asiaa situation that partly
reflects the governments policy of promoting the use of IT and subsidising
prices.
Technology adoption (penetration of mobile, fixed, Internet and broadband)
(no. of subscribers per 100 people)
Mobile-phones

Fixed telephone lines

Internet

Broadband

180
160
140
120
100
80
60
40
20
0

2001

02

03

04

05

06

07

08

09

10

11

12

13

14

15

Sources: Pyramid Research; International Telecommunication Union.

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Singapore

Income and demographics

Nominal GDP (US$ bn)
Population (m)
GDP per head (US$ at PPP)
Private consumption per head (US$)
No. of households ('000)
No. of households with annual earnings
above US$5,000 ('000)
No. of households with annual earnings
above US$10,000 ('000)
No. of households with annual earnings
above US$50,000 ('000)
No. of households with net wealth over
US$1m ('000)

2006 a 2007 a 2008 a 2009 a 2010 a 2011 b 2012 b 2013 b 2014 b 2015 b
145.3 c 177.3 c 189.4 c 183.3 c 222.7 c 270.9
289.9
306.6
323.8
349.9
4.4 c
4.6 c
4.8 c
5.0 c
5.1 c
5.2
5.4
5.5
5.7
5.8
38,726 41,578 40,897 39,812 45,263 47,221 48,933 51,185 53,761 56,575
12,655 c 14,181 c 15,544 c 14,760 c 16,638 20,118 21,647 22,448 23,390 24,552
1,039 c 1,052 c 1,065 c 1,076
1,080
1,090
1,111
1,123
1,135
1,168
1,039

1,052

1,065

1,076

1,080

1,090

1,111

1,123

1,135

1,168

1,009

1,052

1,065

1,076

1,080

1,090

1,111

1,123

1,135

1,168

568

647

703

663

739

841

891

919

947

988

164

215

131

220

263

310

327

342

356

377

a Economist Intelligence Unit estimates. b Economist Intelligence Unit forecasts. c Actual.

Source: Economist Intelligence Unit.

Telecoms

Fixed
The market for fixed-line telephones is saturated, with the penetration rate
at the end of 2010 standing at an estimated 39% (equivalent to more than
100% of households). Mobile subscriptions exceeded fixed-line connections
on a per-person basis in 2000, and the gap has widened since then. The
penetration rate for fixed-line services will continue to drop in the forecast
period, falling to 32% in 2015.
Accelerated liberalisation of the telecoms industry has led to competition in
almost every segment. The industry ranges from niche players to complete
service providers.
According to a government body set up to formulate policy and regulate the
IT and telecoms industry, the Infocomm Development Authority (IDA), there
are only two fixed-lined operators, StarHub and SingTel, but there are 40
firms that provide Voice over Internet Protocol (VoIP, which is used by
consumers who are willing to accept slightly lower quality in exchange for
cheaper calls), and 436 so-called voice service providers, which offer Internetbased voice and data services and international calling-card services.

Telecoms penetration
Telephone main lines ('000)
Telephone main lines (per 100 people)
Mobile subscriptions ('000)
Mobile subscriptions (per 100 people)

2006 a
1,851
42.1
4,639
105.4

2007 a
1,859
40.5
5,619
122.5

2008 a
1,857
38.4
6,336
130.9

2009 b
1,896
38.0
6,857
137.6

2010 b
1,984
39.1
7,373
145.2

2011 c
2,015
38.7
7,863
151.2

2012 c
2,012
37.4
8,325
154.8

2013 c
1,962
35.5
8,726
158.0

2014 c
1,924
34.0
9,083
160.3

2015 c
1,879
32.4
9,454
163.1

a Actual. b Economist Intelligence Unit estimates. c Economist Intelligence Unit forecasts.

Sources: Pyramid Research; Economist Intelligence Unit.

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Singapore

Telecoms expenditure
Telecoms investment (% of GDP)
Fixed telecoms revenue (US$ m)
Mobile telecoms revenue (US$ m)

2006 a 2007 a 2008 a 2009 b 2010 b 2011 c 2012 c 2013 c 2014 c 2015 c
0.4
0.4
0.4
0.4
0.4
0.3
0.3
0.3
0.3
0.3
1,203.9 1,313.3 1,337.4 1,328.4 1,487.9 1,698.9 1,727.5 1,697.4 1,660.8 1,650.8
1,834.0 2,412.7 2,564.9 2,629.4 3,004.6 3,528.7 3,827.6 3,947.3 4,073.9 4,348.2

a Actual. b Economist Intelligence Unit estimates. c Economist Intelligence Unit forecasts.

Sources: ITU; OECD; Economist Intelligence Unit.

Mobile
The mobile subscription rate reached an estimated 145% in 2010, up from
138% in 2009, with new demand being driven by handset upgrades to take
advantage of third-generation (3G) services, which allow phones to connect to
the Internet, send and receive video clips, and download and send e-mail.
The number of 3G subscribers as a proportion of total subscribers will
continue to rise, and demand for a new generation of phones will be
supported by new applications.
It is likely that a growing number of people will opt to own two or more
phones (possibly reserving one for voice services), and by 2015 the penetration rate for mobile phones is forecast to rise to more than 163%. This will
be higher than that in Malaysia and Thailand of 125%.
Singapore has matured rapidly, with the three main mobile operators in
SingaporeM1, SingTel and StarHubsuccessfully meeting the IDAs licensing
requirement for the nationwide roll-out of 3G systems and services by the
end of 2004. All three firms began trials in the first half of 2010 of Long Term
Evolution (LTE) technology, which is considered to be the next step after 3G,
and is aimed at providing faster connection speeds, greater capacity and
lower costs for operators.
In mid-2010 SingTels domestic consumer base comprised around 3.1m
mobile-phone subscribers. Propped up by the Singaporean state, which owns
55% of the company, SingTel is cash-rich, and the strength of its balance sheet
gives it the means to advance in difficult times, building market share at cost
without jeopardising its existence.
The same luxury is not enjoyed by many of its rivals. In mid-2010 StarHub
had nearly 2m mobile-phone subscribers, and 77% of its revenue was earned
on a "post-paid" basis. M1, which became a public company in 2002, had
around 1.8m mobile subscribers in mid-2010.

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Singapore

Telecommunications revenue

Total revenue from mobile telecoms services

(US$ m); right scale
Total revenue from fixed-line telecoms services
(US$ m); right scale

Telecoms revenue
(% change, year on year); left scale
35.0

7,000

30.0

6,000

25.0

5,000

20.0

4,000

15.0

3,000

10.0

2,000

5.0

1,000

0.0

2008

09

10

11

12

13

14

15

Source: International Telecommunication Union.

Telecommunications revenue: regional comparison, 2010

(% of GDP)
6.0
5.0
4.0
3.0
2.0
1.0

ta
n
Ze
al
an
d
Si
ng
ap
or
e
Au
st
ra
lia
In
do
ne
sia

Ne
w

kis

in

Pa

Ch

di
In

Ta
iw
a

Ko
re
a

pa
Ja

So
ut
h

ai
la
nd
Ph
ili
pp
in
es
Ho
ng
Ko
ng

Th

Ma

la
ys

ia

0.0

Source: International Telecommunication Union.

Internet

Singapore has one of the highest rates of Internet access in the world.
According to the IDA, 80% of all households had access to the Internet in
2009, and almost all used a broadband connection.
Growth in Internet subscription numbers, and especially in subscriptions to
broadband services, has been driven by the entry of new market participants,
which have lowered access fees, and by the fact that intense rivalry has
spurred service providers to put greater efforts into winning new customers.

Internet penetration
Internet users ('000)
Internet penetration (per 100 people)
Broadband subscriptions ('000)
Broadband subscriptions (per 100 people)

2006 a
2,739
62.2
788
17.9

2007 a
2,894
63.1
896
19.5

2008 a
3,063
63.3
1,024
21.2

2009 b
3,235
64.9
1,171
23.5

2010 b
3,446
67.9
1,302
25.7

2011 c
3,693
71.0
1,403
27.0

2012 c
3,991
74.2
1,516
28.2

2013 c
4,282
77.5
1,637
29.6

2014 c
4,590
81.0
1,764
31.1

2015 c
4,906
84.6
1,894
32.7

a Actual. b Economist Intelligence Unit estimates. c Economist Intelligence Unit forecasts.

Sources: ITU; Economist Intelligence Unit.

There has been rapid growth in the number of broadband Internet

subscribers in recent years, and growth in Internet usage will continue to be
driven by access to broadband services. The latest data from the IDA show
that in December 2010 the number of broadband subscriptions had reached

Industry Report: Telecoms and technology September 2011

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Singapore

7.8m, equivalent to 191% of all households. However, this figure includes

6.5m wireless broadband subscriptions, representing all retail broadband
subscriptions provided via wireless platforms, such as 3G mobile services and
wireless-fidelity (Wi-Fi) hot spots.
Excluding wireless broadband subscriptions, broadband penetration is estimated to have stood at nearly 26% of the population in 2010, up from 18% in
2006. By 2015 the penetration rate is forecast to reach nearly 33%.
The number of subscriptions to cable modem broadband services remains
slightly above the number of subscriptions to digital subscriber line (DSL)
services. However, demand for Internet access via wireless and fibre-optic
platforms will grow sharply in the forecast period.
The ongoing Next Generation National Infocomm Infrastructure (NII)
initiative, which is set to be completed in 2012, comprises the ultra-high-speed
Next Generation National Broadband Network (NBN) and a wireless broadband network. The domestic firm selected by the IDA to design, build and
operate the fibre-optic infrastructure for the NBN, OpenNet, expects to have
95% of households connected by mid-2012
The increasing range of products and services available via the Internet will
continue to spur demand for broadband access. The majority of those
accessing the Internet do so for communication purposes, although downloading music, playing video games and e-commerce are all gaining in
popularity.
Singapore has 95 Internet service providers (ISPs), according to the IDA, but
the main four are SingTel's Singnet, StarHub, M1 and Pacnet. Singnet remains
the dominant ISP, having a share of more than 50% of the broadband market.
According to the EDB, the countrys broadband network reaches 99% of the
population, and adoption will continue to rise in 2011-15, as competition
between service providers has lowered access prices.
Digital economya
Economist Intelligence Unit digital economy
rating (10=high)

2006 b

2007 b

2008 b

2009 b

2010 b

8.24

8.60

8.74

8.35

8.22

a Previously known as the e-readiness rankings. b Index score.

Source: Economist Intelligence Unit.

Hardware

The governments aggressive promotion of IT in workplaces, schools and

homes, as well as increasing use of personal computers (PCs) and the
Internet, have been leading factors in driving sustained growth in demand for
computer hardware. The government frequently subsidises the cost of
hardware, and, according to the IDA, 83% of households had at least one PC
in 2009.
Total hardware spending is forecast to reach US$6.3bn in 2015. Although the
stock of PCs will continue to rise, with the penetration rate increasing to
nearly 84% in 2015, conventional IT hardware will be increasingly challenged
by devices with cross-media functionality, reflecting the convergence of

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Singapore

television, Internet and phone services. Portable devices, such as netbooks

(small laptops) and e-readers, will prove popular.
Singapores IT export market is dominated by hardware, but the trend of
moving from IT hardware production to IT services is expected to continue
and will boost both supply and demand for such services in Singapore.
IT hardware production in Singapore began with the manufacture of disk
drives and peripherals in the 1970s. However, as the increased costs of
production drove IT manufacturing to Thailand, Malaysia and China, the
electronics industry has shifted to smaller, niche areas. Reflecting such trends,
Singapore's exports of disk drives have fallen in the past decade. Despite
these changes, Singapore remains an important global supplier of electronics,
including integrated circuits, consumer electronics and telecoms equipment.
Hardware penetration
Stock of personal computers ('000)
Stock of PCs (per 100 people)
Stock of PCs (% growth)

2006 a
2,979
67.7
6.8

2007 a
3,200
69.7
7.4

2008 a
3,421
70.7
6.9

2009 b
3,617
72.6
5.7

2010 b
3,807
75.0
5.2

2011 c
3,989
76.7
4.8

2012 c
4,195
78.0
5.2

2013 c
4,394
79.5
4.7

2014 c
4,623
81.6
5.2

2015 c
4,865
83.9
5.2

2011 c
5,744
7,089
17.6
2.1

2012 c
5,946
7,147
0.8
2.1

2013 c
6,089
7,349
2.8
2.0

2014 c
6,239
7,590
3.3
1.9

2015 c
6,337
7,692
1.3
1.8

a Actual. b Economist Intelligence Unit estimates. c Economist Intelligence Unit forecasts.

Sources: Pyramid Research; ITU; Economist Intelligence Unit.

Hardware expenditure
IT hardware spend (US$ m)
IT hardware spend (S$ m)
IT hardware spend (S$; % growth)
IT hardware spend (% of GDP)

2006 a
2,499
3,971
18.4
1.7

2007 a
2,905
4,378
10.3
1.6

2008 a
3,290
4,655
6.3
1.7

2009 b
3,056
4,445
-4.5
1.7

2010 b
4,421
6,028
35.6
2.0

a Actual. b Economist Intelligence Unit estimates. c Economist Intelligence Unit forecasts.

Sources: IDC; Economist Intelligence Unit.

IT spending
Total IT spending on packaged
software, hardware and IT services
(% change, year on year); left scale

IT spending on services (US$ m); right scale

IT spending on packaged software (US$ m); right scale
IT spending on hardware (US$ m); right scale

35.0

16,000

30.0

14,000

25.0

12,000

20.0

10,000

15.0

8,000

10.0

6,000

5.0

4,000

0.0

2,000

-5.0

2006

07

08

09

10

11

12

13

14

15

Source: IDC.

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Singapore

IT spending: regional comparison, 2010

(% of GDP)
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5

ne
sia

ia
In

do

In
d

Ta
iw
a

Ch
in
a
Ph
ili
pp
in
es

Th
ai
la
nd

na

So
ut
h

et
Vi

Ko
re
a

n
Ja
pa

Ze
al
an
d
Au
st
ra
lia
Ma
la
ys
ia

Ne
w

ng
Ho

Si

ng
ap

or
e

Ko
ng

Source: International Telecommunication Union.

Software

As is the case with hardware demand, the governments aggressive

promotion of IT in workplaces, schools and homes, and the increasing use of
computers and the Internet, have been factors in driving sustained growth in
demand for computer software and services. The government also frequently
subsidises the cost of software purchases.
The pace of growth in spending on IT services in Singapore is forecast to
moderate in 2011-15 compared with the rate that was recorded during much of
the 2000s, but growth in spending on packaged software will accelerate
compared to that in recent years.
Although there are more than 200 indigenous firms that develop software
products, foreign firms supply most of Singapores software needs. US
suppliers dominate the market, as domestic rivals pose little competition and
the presence of third-country suppliers is limited, according to the Singapore
IT Federation.
Many US software firms have regional offices in Singapore, including
Microsoft, Oracle, BMC, Autodesk, Sybase, Sun, Borland, Network Associates,
Computer Associates, IBM and Compaq. Sybase and Borland carry out
substantial research and development in Singapore, while Microsoft and Sun
have centres of competence located in the country.

Software and services expenditure

IT services spend (US$ m)
IT services spend (S$ m)
IT services spend (S$; % growth)
IT services spend (% of GDP)
Packaged software sales (US$ m)
Packaged software sales (S$ m)
Packaged software sales (S$; % growth)
Packaged software sales (% of GDP)

2006 a
1,706
2,711
6.4
1.2
738
1,173
5.3
0.5

2007 a
1,898
2,861
5.5
1.1
894
1,348
15.0
0.5

2008 a
2,166
3,065
7.1
1.1
956
1,353
0.4
0.5

2009 b
2,213
3,218
5.0
1.2
969
1,410
4.2
0.5

2010 b
2,551
3,478
8.1
1.1
1,110
1,513
7.3
0.5

2011 c
2,998
3,700
6.4
1.1
1,331
1,643
8.6
0.5

2012 c
3,191
3,835
3.6
1.1
1,492
1,794
9.2
0.5

2013 c
3,292
3,973
3.6
1.1
1,635
1,974
10.0
0.5

2014 c
3,366
4,094
3.1
1.0
1,783
2,169
9.9
0.6

2015 c
3,468
4,209
2.8
1.0
1,975
2,398
10.6
0.6

a Actual. b Economist Intelligence Unit estimates. c Economist Intelligence Unit forecasts.

Sources: IDC; Economist Intelligence Unit.

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