ABSTRACT
Telecommunications and information technology are the two most dynamic economic sectors in India. The telecommunications sector has undergone tremendous improvement in technology and competition among the service providers for a share of the Indian market.1 How did Singapore become attracted to the telecoms sector in India? Singapore Telecommunications better known as SingTel has been facing increasing competition as Singapore liberalized its telecommunications market on 1 April 2000. Once a monopoly, SingTel now has to compete with dozens of companies such as Starhub, ST Telemdia, Flag Telecom, MCI Worldcom, Singapore Power, and Telstra. Given that the limited Singapore market has become increasingly saturated, SingTel’s growth strategy has been to regionalize and invest overseas, especially in Asian telecom companies. According to SingTel’s former chief executive Lee Hsien Yang, in 1994 close to 50 percent of the company’s revenue came from the international direct dialing business and they had negligible overseas investments. In the 1980s, before SingTel was corporatized, the then statutory board knew that it had to regionalize because the regulatory environment in Singapore would become tougher and in due course it would face full competition.2 With the deregulation of the telecommunications sector in Singapore and the entry of foreign players such as M1 and Starhub, SingTel has seen its traditional source of income declining. In particular, revenue from international calls in Singapore had declined for the latter half of 2000.3 SingTel considers the Indian telecommunications market to have huge potential and capacity for expanded growth.
