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Singapore Telephone Board

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In 1879 Singapore became one of the first cities in the East to have telephone service. Singapore Telephone Board (STB) was incorporated as a statutory board with exclusive rights to operate telephone service within Singapore. STB and Telecommunications Authority of Singapore (TAS) merged in 1974. In 1988, a subsidiary, Singapore Telecom International, was formed. This marked the beginning of SingTel’s expansion into overseas markets. The corporatisation of SingTel in 1992 was followed by its Initial Public Offering a year later. It remains Singapore’s largest ever IPO. The SingTel Group is Asia’s leading communications group with more than 130 years of operating experience and has played a pivotal role in the country’s development as a major communications hub which provide a wide spectrum of multimedia and Info-Communications Technology (ICT) solutions, including voice, data and video services over fixed and wireless platforms.

Business and Development
Today, SingTel continue to lead and shape the local digital consumer market and the enterprise ICT market. They are a major communications player in Asia and Africa through their strategic investments in six regional mobile operators, namely Telkomsel (Indonesia), Globe Telecom (the Philippines), Advanced Info Service (Thailand), Warid Telecom (Pakistan) and PBTL (Bangladesh). The Group also has investments in Bharti Airtel (India), which has significant presence in Bangladesh, Sri Lanka and Africa. They are a long term strategic investor and work closely with the associates to grow the business, by leveraging their scale in networks, customer reach and extensive operational experience. The Group serves 468 million mobile customers around the world. In May 2009, SingTel signed A$500 million, five-year contract with ANZ to provide telecommunications and managed network services to ANZ in Australia and 30 countries across Asia and the Pacific to support ANZ’s super regional strategy. Optus Mobile delivered a strong 13% growth in service revenue and outperformed the market, led by robust customer acquisitions and increased penetration of smartphone. In June 2009, SingTel launched AMPed in partnership with Universal Music Group and has won the coveted “Best Mobile Music Service” Award.

Associates and Partners
International Group
Bridge Alliance
Advanced Info Service (AIS) is the largest mobile communications operator in Thailand and the third largest listed company on the Stock Exchange of Thailand in terms of market capitalisation. As at 31 March 2011, AIS had 32.0 million mobile subscribers.

Bharti Airtel Limited (Bharti Airtel) is India’s leading private sector provider of telecommunications services. It offers mobile, fixed-line, long distance, broadband, enterprise services and digital TV through IPTV and DTH. It is listed on the National Stock Exchange and the Stock Exchange, Mumbai. Bharti Airtel is the only private telecom operator with an ‘all India’ presence offering mobile services in all 23 licensed circles. As at 31 March 2011, Bharti Airtel had 212 million mobile subscribers in Africa and South Asia.

Globe Telecom (Globe) is one of the largest mobile communications services providers in the Philippines. It is listed on the Philippine Stock Exchange. As at 31 March 2011, Globe had 27.3 million mobile subscribers.

Pacific Bangladesh Telecom Limited (PBTL) is the only CDMA operator in Bangladesh. As at 31 March 2011, PBTL had 1.8 million mobile subscribers. PT Telekomunikasi Selular (Telkomsel) is the leading operator of cellular telecommunications services in Indonesia, with over 29,000 radio base stations providing nationwide coverage. As at 31 March 2011, Telkomsel had 99.4 million mobile subscribers.

Warid Telecom (Warid) is one of the fastest-growing telecommunications companies in Pakistan. The company launched its services in Pakistan in May 2005, and has a 15-year licence to operate GSM-based mobile services in Pakistan, Azad Jammu and Kashmir, and the Northern areas. As at 31 March 2011, Warid had 17.8 million mobile subscribers.

Vision and Mission
To be Asia Pacific’s best multimedia solutions group
Breaking Barriers, Building Bonds.
We enable communication by breaking barriers and building bonds.
We help businesses and people communicate anytime, anywhere and in various ways.
We make communications easier, faster, more economical and reliable by:
Breaking the barriers of distance, price, time and technology, and
Building strong bonds among SingTel employees, and with our shareholders, customers and business partners.
We believe that creating and delivering value to our customers, employees and shareholders is fundamental to our business. CORE VALUES
SingTel’s Core Values underpin our desire to create a unity of purpose across the Group. They reflect our common aspiration to foster a performance-based culture that is open and innovative, and that promotes mutual trust and engagement. Customer Focus

Challenger Spirit
Personnel Excellence

SingTel is committed to being a responsible corporate citizen and strives to build a sustainable future for our stakeholders in four key areas:

home-singtel.com/about_singtel/network_n_infrastructure/default.asp ii) Evaluate its external and internal environments.
Political, legal and government forces
From the beginning until current year, Singtel have been experiencing political instability. Such instability could have a big impact on economic in the future. Therefore, Singtel have been trying to work closely with the management and their partners in the countries where the Group operates to leverage the local expertise, knowledge and ability. This could cause an opportunity to the company as they could ensure their staff follow the laws and are able to implement risk mitigation measures. Economic forces

Changes in economic conditions may cause a big effect on the demand for telecommunications, IT and related services, and hence, on the Singtel’s financial performance and operations. Singtel’s management planned and trying to monitor of budgets and expenses to minimise the risk of over-investment. As economic cannot be predicted, it’s a good practise to have a cost structure. This way, it will be an Opportunity for Singtel.

Social, culture, demographic and environment forces
Singtel seek to build a strong risk management and control culture by balancing risk and rewards. They consider it as their responsibility to make a difference to the well-being of the communities they operate in. Singtel committed to the safety and protection of their customers. Example is the protection of children. They offer mobile applications which allow parents to filter, block or allow access to specific sites as well as to set age appropriate default settings. It’s an opportunity to leverage their network and resources to serve the community in different ways. Technology

Technology change at a rapid rate which is common in the telecommunications industry, such changes significantly affects SingTel Group’s expenditures as well as the consumer demands for their products and services. Such rapid advancements in technology may cause the group investments to be technologically out of date before the end of their expected life span. These changes results in them having to replace and upgrade existing network infrastructure to remain competitive which in turn incur additional expenditures. It’s an opportunity for the Group if they continue to invest in upgrading, modernising and equipping their systems with new capabilities to ensure that they continue to deliver innovative and relevant services to their customers.

Competitive forces
Telecommunications industry faces competitive risks in all the markets they operate. However, a threat for Singtel as the competitive advantage may be imitated by competitors or create different advantages to more value to customers.

1. Rivalry among competing firms
As Singapore only has three major telecommunication service provider, all three holds almost equal amount of consumer loyalty. Therefore rivalry among competing firms is very high among the three as they compete for the largest market share. 2. Bargaining power of consumers

There is a big limitation to consumer bargaining power as the price rates for telecommunications is about the same for all competing companies. 3. Bargaining power of suppliers
Many suppliers to choose from therefore bargaining power of suppliers is low and easily replaceable. 4. Potential development of substitute product

The current possible substitute product can only be email or conventional letter writing which is too much of a hassle. 5. Potential entry of new competitors

Potential new entrant is of very low possibility as there is very high risk to start a new telecommunication service provider in Singapore. Few of the factors contributing to the high risk is high capital required, strong brand preferences among consumers in local markets and difficulty setting up due to many barriers in terms of government laws and tariffs. Physical – weaknessesBeing a network company ,their facilities (satellite ) are unable to maintain a strong communication network across the country. Singapore is a very small country and the network should be strong than network across the country. This could be the most weakness single has ever had to improve in. Human – weaknesses As a leading telecommunication company in Asia, the customer service in SingTel has rooms for improvement. Under the current extreme competitive environment, all the companies not only need to provide unique products but also good customer service. Thus, employee training program could be provided in order to handle customers’ problems effectively.Organizational – strengthThe company’s main business activities are focused in Singapore and Australia and partners located in India, Belgium, Hong Kong, Thailand, the Philippines, Taiwan and Indonesia. The spread of geographical operations will benefit the company, as it will become less depend on the local market to generate revenues. Most of their businesses are experiencing double-digit revenue growth over the past year. The Goals

Glowing profit and maintain regional challenge position by:
– Using existing services and operation to seek new business opportunities.
– Get ready for competition to outperform the competitors by taking advantage of the business – opportunities that come with convergence of the telecommunications, IT and media. – Pursue global and regional expansion through overseas investments – Using existing assets to generate new revenues through facility management and billing services The objectives established to remain competitive:

• To align the interests of Senior Management with those of shareholders;
• To attract, motivate and retain high-performing executives, which is necessary to sustain SingTel as a leading communications provider in Asia Pacific • To achieve Business and People targets and

• To be locally focused and competitive in each of the relevant employment markets.

Grooming Leaders
Customized to individuals to accelerate their development based on experience, education and relationships such as education sponsorships, job rotations and mentoring Education programs targeted at different levels of management, training managers to equip with effective leadership skills to foster empowerment, cross-functional collaboration and build high-performing teams.

Driving and Rewarding Performance
Driving a high performance ethic by ensuring that employees understands where the organisation is heading and how they can contribute to achieving corporate goals. Reward and recognise are given to individual and team performance who has achieving sales.

Remuneration Components
The cost and value of the remuneration components are considered as a whole and are designed to strike a balance between linking rewards to short-term and long-term objectives, and maintaining competitiveness with market practice.

• Fixed Component
The base salary should fall within the mid-range of what is paid by comparable companies in relevant employment markets for similar jobs, but may vary with responsibilities, performance, skills and the experience that the individual brings to the role.

• Variable Component
Variable bonus payouts are based on actual achievement against Group, company, business unit and individual performance objectives.

• Provident/Superannuation Fund
This component is made up of SingTel’s contributions towards the Singapore Central Provident Fund or the Optus Superannuation Fund or any other chosen fund, as applicable.

• Benefits
SingTel provides benefits consistent with local market practice, such as in-company medical scheme, club membership, employee discounts and other benefits.

• Long-Term Incentives
Long-term incentives are provisionally allocated or granted to Senior Management for performance for the year ended 31 March 2010.

Given the competitive market in Singapore, Singtel should concentrate on maintaining not only their current customers but also retain them. They will have to increase their technology and diversifications of their products and services. Current Strategies

Horizontal Integration Strategies
In the 1970’s, Singapore Telecom has taken the Horizontal Integration Strategies by amalgamating the many faltering private and government services to minimize competitors. As the company strive to become the strongest and biggest sole organization providing telephone and postal services in a competitive growing industry in Singapore, they are also hoping to increase the market share, consumer’s pool and at the same time to increase the consumer’s confidence in their products and services. Being a monopolized telecommunication service provider in Singapore, it will open up overseas investment opportunities. Justification: The world wide service of Singtel is a opportunity for firm to invest & expansion in core overseas market of Indonesia, India and new market such as Pakistan and Vietnam and Asia Pacific. Overseas investments are essential part of Singtel strategy especially in domestic market of Singapore. Related Diversification Strategies

Recently in 1990’s, Singapore Telecom has taken a step further by investing in foreign countries to gain strategic alliances for their technology and value-added services. Reason is to uphold and maintain the development of growth and level of profits. Additionally, to be an all-rounder by taking advantage of the synergies and capabilities on top of the cable chips maintenance and Singapore’s own satellite. Besides increasing the reputation and market share of the company, it will also bring in more revenues with the diversity of products and services. Justification: Their corporate business unit used large cash-reserves to invest in diversification via alliances with business communication applications service providers to provide corporate customers with affordable integrated communications solutions that can customized, catering to their communication needs. Cost Leadership: Low Cost type 1

Within 5 years from 1993 – 1998, Singapore Telecom constantly revised their International Direct Dialing charges to combat foreign competitors. By offering the cheapest of the cheap package, introducing special and unique services that are cost effective and stands out amongst the competitors to target the price-sensitive consumers, the company is able to provide new streams of income to meet the demands of maturing customers so as to gain loyalty from them, thus avoiding price wars with competitors. Justification: There is possibility the company can use its acquired technology and knowledge with other business units. Singtel able to offer lower prices to enterprises, they are able to defend against substitutes and deter competitors. Market Development

Singapore Telecom has invested billions of dollars in at least 55 overseas business opportunities and had operations in 19 countries by June 1999. The focus of the market development was initially in Asian countries but was quickly turn to Europe as most involved investments in England and western Europe. Refocused investments from Singapore Telecom occurred in mid 1999 with countries like Australia, Indonesia, Philippines, Thailand and lastly with Japan in Nov 1999. The investments include data communication, mobile phone communication, paging services and integration of services. Expanding businesses in new market areas had bring in more revenues for the company and significantly improve the employment rate. Justification: Singtel has refocused their overseas investments in Asia. Significant investments have included S$55.6 million in AAPT of Australia, which provided switched and leased-line communications services, S$47.1 million in PT Bukaka Singapore Telecom in Indonesia which operated fixed public switch telephone services; S$155.7 million in Globe Telecom in Philippines, which provided mobile phone, international, and fixed-line services; S$36.9 million in Shinawatra Datacom and Shinawatra Paging, which provide data communication and paging services and S$551 million in Advanced Info Services of Thailand, a cellular phone operator.


http://business-strategy-competition.knoji.com/Singapore Telecom-businesslevel-strategy/ From case study 1 – Singapore Telecom: Strategic Challenges

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