A Case Analysis on Singapore Telecom: Strategic Challenges

Submitted By: Din, JoamaFebrille R. BS Accountancy 200712572

Assumptions VII. View Point Time Context Statement of the Problem IV. Statement of Objectives V. Alternative Courses of Actions VIII. Plan of Action . Analysis IX. Areas of Consideration (SWOT Analysis) VI. II. Conclusion X. III.TABLE OF CONTENTS Title Page Table of Contents Background of the Study I.

we see that many countries have increased their number of lines from year 1990 to 2000.the art technology in its home country since the demand may be too small. they could possibly capture the foreign market shares.BACKGROUND OF THE STUDY Singapore Telecom was founded in 1879. as Singapore telecommunication market is reaching saturation. it will find itself soon out of business. . The ever-changing telecommunication industry is shaped by many factors in which if any players of the market is slow to react to consumer wants and needs. they have lost a substantial market share to their new competitor within three weeks of entry. Moreover the revolution of companies doing business globally shows that there are ample opportunities for Singtel to move from a single domestic market producer to doing business in multiple countries. Furthermore. Singtel was previously able to earn large profits even if they were slow and inflexible to consumer demands. In addition. telecommunications provider could bundle a package of services that includes corporate lines as well as consumer lines as their marketing tactic. therefore Singtel faces the possibility of losing consumer business if they fail to capture the market for corporate lines. This will be an opportunity to secure corporate clients who will require an integrated telecommunication service across several geographical regions in the world. Singtel would find it less profitable to invest heavily in state-of. In 1971 this company became the monopoly government-owned postal and telecommunications services provider and in 1986 SingTel planned to be a privatization with government own about 80% of Singapore telecom. Being a monopoly of Singapore telecommunication market. However such a regulatory advantage was removed in 1997 and in fact. Thus if Singtel were to bring along its technological competencies and efficient production capabilities into such market. Looking at the telecommunications growth in other foreign countries. it could well indicate a high demand for basic telecommunication services in the coming years.For countries that have low growth rates.

SingTel operated difficult business environment and faced increasing competition both locally and abroad. The company had in 1997 lost its monopoly of the mobile sector with the entry of MobileOne. the corporate business unit dealing with corporate accounts. TIME CONTEXT . In 1998/1999 there is a regional economic crisis that effect to the Singapore Telecom. the company faced a number of serious challenges and threats to its position as the leader in the telecommunications industry in Singapore.For much of the 1990s. There was the threat of a new full service provider entering the Singapore market in early 2000. SingTel announced restructuring that involves of three new units : the consumer business unit. These trends not only heightened the pace of change in the telecommunications companies but also resulted in major changes in government policies towards the industry. Singapore Telecom was. and the establishment of a world class telecom infrastructure. There is also addition of Internet services as the value added. The challenge to Singapore Telecom was to sustain its performance record in the face of an increasingly turbulent and hostile environment. Global trends pointed towards the convergence of telecommunications.88 billion for financial year 98/99. the most profitable firm in Singapore. In March 1999. to pursuit of globally competitive service and efficiency standards. Notwithstanding this. with a profit of S$1. SingTel has strategy to focus on the achievement of short and medium term profitability. I. covering residential customers and small and medium-sized enterprises. a cellular phone operator. at the turn of the century. Singapore Telecom Chairman II. and the global business unit concerned with Singapore Telecom¶s overseas investments. which would remove Singapore Telecom's monopoly of the fixed line sector of the Singapore market. VIEW POINT Koh Boon Hwee. computer and television technologies. high investments in proven technologies. Internet telephony also posed a serious challenge to international call revenues and the Asian economic crisis had also intensified competition amongst operators with intense downward pricing pressures. in absolute terms.

to prepare it or the challenges of global competition and technological advancements and to stimulate the development of the Singapore stock market.Financial year 1998/1999 which has been a difficult and challenging year for the Singapore Telecom Group. Internal y Environment (SW) y New services such as maintenance of cable chips and ownership of Singapore Telecom¶s own satellite. Fear that public sympathy is not with Singapore Telecom .In addition. SingNet. STATEMENT OF OBJECTIVES y To find ways on how to sustain its success and to maintain its traditional record of high performance. international telephony. it had to deal with the Asian crisis as well as pressure on profit margins of its cash cow. V. SingTel group uniquely positioned to offer services throughout the ecommerce value chain y As the first ranked of the quality of the Singapore¶s telecommunications y y Weakness (W) SingTel¶s growth rate in recent years has become more relatively unstable. STATEMENT OF THE PROBLEM Singapore Telecom faced its major challenge of dealing with competition both locally and abroad. y To determine ways on how to increase Singapore Telecom¶s flexibility. AREAS OF CONSIDERATION (SWOT ANALYSIS) Strengths (S) y Having Singapore Telecom Mobile. III. IV. and Singapore post as their major partner in Asia Mobile Electronic Services.

ALTERNATIVE COURSES OF ACTION (ACA) VIII. y y y Merger and acquisitions The higher penetration rate in Singapore Refocused its overseas investment in Asia y Trend of deregulation and privatization y y y y y Threats (T) Customer demands and expectations Rapid growing of technological change New services such as Internet telephony or Virtual Private Networks The Asian economic crisis StarHub and Mobile1 as new competitor Faced competition from foreign callback services. y Government create competition VI.infrastructure External Environment (OT) y y Opportunities (O) Singapore has highest GDP per capita in y Asia Singapore is the most advance information technology hardware infrastructure in the world. ANALYSIS IX. ASSUMPTIONS VII. CONCLUSION PLAN OF ACTION . X.

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