Saturday, January 08, 2011

Main Issues Facing Singapore Telecom

After its privatization (from a government department to one of the largest listed firm in Singapore), the main issues facing Singapore Telecom would be trying to maintain its exceptional record of profitability and retain as much market share after the introduction of competition (e.g. M1 and StarHub). Singapore Telecom would have to achieve this in the midst of fast paced advancements in technology, maturing customer tastes and a turbulent business environment.

The Asian financial crisis created a difficult business environment for Singapore Telecom; it became a challenge to maintain its exceptional record of profitability. This can be seen from the financial performance, with the net profit growth declining by 8.1% (from 1998 to 1999) from 11.8% (1998) to 3.7% (1999).

In addition, competition in the domestic market (Singapore) was intense with the introduction of M1 (MobileOne) in 1997. This is evidenced by a drastic drop in turnover growth of 6% in 1997 from 13.7% the year before (1996). The introduction of M1 (competition) coupled with the onset of the Asian financial crisis during 1997, affected Singapore Telecom’s market share and profitability. Singapore Telecom’s market share was eroded by M1’s introduction; M1 gained 32% of the market hare within 2 years of its introduction...Read more>>

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