Junior Lee must save Singapore Telecom<\/p>\n
By P. Parameswaran<\/p>\n
SINGAPORE (AFP): Soldier-turned-executive Lee Hsien Yang, son
\nof statesman Lee Kuan Yew, faces the daunting task of maintaining
\nSingapore Telecom's competitive edge as the local giant faces an
\nerosion of its monopoly, analysts say.<\/p>\n
The junior Lee, who left his 18-year-career in the army to
\njoin Singapore Telecom as executive vice-president a year ago,
\nwas promoted to president and chief executive officer of
\nSingapore's largest public listed company on May 1.<\/p>\n
Lee is only too well aware of his task as the government
\nslashes Singapore Telecom's monopoly via a strategy of
\nliberalization, deregulation and competition for better services
\nat highly competitive prices.<\/p>\n
\"I think there are two challenges facing us, one of them is on
\nthe domestic front which is to deal with the challenge that
\ncompetition will bring with it,\" Lee said on Television
\nCorporation of Singapore's \"Money Mind\" program last week.<\/p>\n
\"I think the second challenge is on the international arena.
\nWe have made steps to invest a sizable amount of our surplus
\nfunds and those we hope will one day generate earnings as well as
\ncapital gains for the company,\" he said.<\/p>\n
Lee, who turns 38 in September, however was confident that
\nSingapore Telecom, which has committed about one billion U.S.
\ndollars on some 30 overseas projects, would be battle ready in
\ntime for the arrival of the competition.<\/p>\n
\"...Sometimes, principles of war are borrowed for business
\npractices as is quite popular at the moment,\" said Lee who became
\none of the youngest generals in the Singapore Armed Forces when
\nhe received his star at the age of 36.<\/p>\n
Analysts said Lee's stint at Singapore Telecom will be closely
\nwatched by Singaporeans, most of whom bought the shares at
\nreduced rates of up to two Singapore dollars (1.42 US) under a
\ngovernment scheme to give every citizen a stake in the company.<\/p>\n
When Singapore Telecom was first traded on the local bourse on
\nNov. 1, 1993, the stock closed at $4.14. It closed last Friday on
\n$2.96, having fallen gradually due to apparent public concern
\nover the company's future growth and profit.<\/p>\n
\"He (Lee) not only has to ensure that Singapore Telecom
\nmaintains local market share amid liberalization but also carries
\nthe burden of the entire country as Singapore wants to be a
\nregional telecoms hub,\" said Vincent Ng, an analyst with
\nJ.M.Sassoon and Co. here.<\/p>\n
The Telecommunication Authority of Singapore (TAS), the
\nnational telecoms regulator, has already opened up the mobile
\ndata service market and said that it will bring in competition at
\nthe retail level \"where appropriate.\"<\/p>\n
TAS has also said it was adopting a \"narrow definition of the
\nscope of Singapore Telecom's exclusivity in certain sectors\" to
\npave the way for more competition. Satellite uplink services for
\ninstance are being opened up.<\/p>\n
But the biggest threat to Singapore Telecom will come when its
\nexclusive rights expire in March 1997 for the lucrative cellular
\nportable phone and paging services, a market worth US$320 million
\nexpanding at double digit rates annually.<\/p>\n
The deadline is less than two years away and only seven days
\nafter Lee took over the helm, TAS announced that a Hong Kong-
\nSingapore consortium has been given the much-sought-after license
\nto operate the second cellular network.<\/p>\n
MobileOne Asia Pte. Ltd. was also among consortia that won a
\nbid for three public radio paging licenses.<\/p>\n
MobileOne is a partnership between local companies Keppel
\nTelecoms and SPH Multimedia and Great Eastern Telecommunications,
\na joint venture between HongKong Telecom and its parent, Cable
\nand Wireless.<\/p>\n
Singapore Telecom has given portable phone subscribers lower
\nrates during off-peak periods and slashed portable phone and
\npaging subscriber rates.<\/p>\n
\"It is going to be very interesting. MobileOne has to do
\nsomething special to compete with Singapore Telecom which is
\naggressively positioning itself to meet the challenge,\" Ng said.<\/p>",
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