Singapore's Infocomm Technology (ICT) Industry
The ICT industry in Singapore has been growing steadily, with total revenue growth being 8.9% in 2005. The key sectors that the Singapore ICT Industry is known for are e-government, financial technology, intelligent transport systems and telecommunications.
companies have an impressive track record serving key sectors such as Defence, Education, Health, Law, Trade and Transport.
Singapore also boasts a range of electronic systems that manage the flow of regulatory and commercial information for trade. These include PortNet and Jurong Port Online for sea logistics, Cargo Community Network for air logistics and Marinet for dangerous goods declarations. Most extensively used is TradeNet, the world's first nationwide electronic trade documentation system, which allows the trading community to submit permit applications electronically to the relevant government bodies for processing.
Singapore is a recognised global leader in e-government, and has numerous accolades to our name. We ranked among the top three in the e-Government Leadership survey by Accenture from 2001 to 2005. We were ranked the top e-government country by Brown University (2003), the top country in Networked Readiness Index by the World Economic Forum (2004?005), and second and seventh on e-government participation and readiness respectively by the United Nations (2005).
Our homegrown ICT companies deploy a wide spectrum of unique technologies and solutions to provide a comprehensive suite of services in the areas of Infrastructure, Technology Solutioning, Managed Services, Master-planning and Consultancy. These
Singapore is a leading financial centre, plugged into the international financial system. Over the years, our sound economic and financial fundamentals, strategic location, highly skilled workforce and excellent telecommunications and infrastructure, have attracted more than 700 reputable international financial institutions to set up operations in Singapore. As of 2005, we are the world's fourth largest foreign exchange trading centre, the fifth largest trader in derivatives, and the ninth largest offshore lending centre.
Given the established base of world-class banking clientele in Singapore, our financial technology companies have developed well-rounded exposure and substantial experience in understanding the needs of financial institutions, providing end-to-end services and financial software solutions ranging from IT infrastructure outsourcing, IT applications outsourcing, business process outsourcing (BPO) to business transformation outsourcing. The companies have impressive track records with numerous world-class financial institutions based in Singapore and around the world. Singapore and our companies have also won accolades for the successful implementation of several cutting-edge financial systems. These include the world's first nationwide end-to-end Cheque Truncation System (CTS) as well as one of the most successful nation-wide online debit systems.
Intelligent Transport Systems
In a highly urbanised and land-scarce city like Singapore, it is important to have in place an efficient traffic management system. Our deployment of revolutionary intelligent transport systems in traffic management such as the gantry-less Electronic Road Pricing System and Junction Electronic Eyes (J-Eyes) System is well-known, and serves as a model of traffic management for developed countries.
Our local intelligent transport system providers have commanding edge in the development and application of advanced technologies such as Artificial Intelligence, Mobile Communications, Global Positioning System, Smart Card, and Internet technologies to meet the needs of airports, sea ports, transport hubs, transport infrastructure operators, and other end users.
Singapore and our ICT companies welcome global players that wish to find out more about our tested and proven solutions for e-government, financial technology and intelligent transport systems. We look forward to serving the needs of customers from around the world through the deployment of our cutting-edge innovation and technology.
Singapore's sound telecom infrastructure, wide range of prolific communication services as well as the regulations and policies shaping the industry are renowned worldwide. The telecommunications market was liberalized in April 2000 and it has resulted in numerous benefits such as Increased Competition; Improved Access; Competitive Prices; More choices for consumers; Greater Innovation; Increased Jobs and Continued Investments.
The country enjoys a 110% penetration of fixed telephone services and 95% penetration of mobile services, which is growing at about 9% annually. Broadband usage has experienced a significant growth and the penetration stands at 56% as of date. The key drivers behind the strong growth of the telecom sector include the policies set by the regulatory authority (IDA), competitive pricing as well as the plethora of bundled innovative content, applications and value-added services being offered to customers, be it corporate and consumers.
Mobile communication services have played a significant role in industry's growth. The offering of value-added services such as mobile gaming, personalized mobile entertainment, dynamic advertising, mobile retail services, location based services, m-commerce, mobile content sharing, mobile contact tracing, mobile security as well as other enterprise solutions (push email, messaging, synchronization) has revolutionized the mobile experience of customers and at the same time helped operators increase their ARPU and reduce churn.
The wireless & mobile sector is poised to grow further and reach greater heights in the years to come given the recent launch of the government's iN2015 strategy, which aims to propel the growth of its wireless industry through innovation, intelligence & internationalization.
Information Technology Forecast - Q2 2006
Source: Business Monitor International
The Government has revealed that it will spend SGD2bn over the next 5 years to upgrade its IT systems under the new iGov2010 masterplan. According to a statement by the Ministry of Finance, the SGD2bn will be invested under the iGov2010 plan to transform back end processing to achieve front end efficiency. 2005 figures reveal that the Singapore government is becoming an increasingly important support to local IT spending, with IT contracts worth SGD1bn awarded during the financial year ending March 2006. As discussed last quarter, in 2006 the Infocomms Development Authority (IDA)'s new 10 year Infocomms Master plan, dubbed 'Intelligent Nation 2015,' comes into effect. The program, first unveiled in March last year, has the objective of establishing an intelligent nation powered by Infocomms by 2015, and is IDA's most comprehensive road-map to date.
Meanwhile, another boost to the Singapore IT industry comes from evidence that the banking sector is succeeding in attracting a new wave of investment by multinationals in outsourced operations. In May, Credit Suisse became the latest financial organisation to announce the creation of 900 outsourced jobs, including IT functions, in Singapore, as part of an exercise to cut costs in back office operations. The bank's decision is a boost to the Singapore government, which has been concentrating on higher bend businesses and offering financial incentives to multinationals to create a hub for international banks and funds.
With the 'Intelligent Nation 2015' plan placing Information Technology at the heart of the Government's strategy to improve economic competitiveness in the next decade, Singapore's IT Sector has plenty of grounds for optimism going forward. In the last couple of years, Singapore's IT sector finally seems to have left behind the slow growth period of 2001-2003, benefiting from improved economic conditions by most measures. While growth will still be relatively modest by regional standards, at around 3%, it remains one of the most affluent countries or regions in Asia, with around 90% of households earning more than US$15,000 per year.
Amid a strengthening global economy and an improved outlook for domestic consumption, growth appears to be on a firmer footing ahead. The total size of the domestic IT market is forecast by BMI to increase from US$3.6bn in 2005 to around US$4.4bn in 2009, with telecoms services still accounting for around one third of total ICT sector spending.
According to IDA's latest report, around 74% of Singapore households now have a PC and, following PC demand growth of close to 20% between 2001-2015, this level of saturation will act as a constraint going forward. However, strong demand for notebooks and falling prices have been emerging as new market supports in recent quarters. Since 2001, the price of PCs has fallen rapidly, while notebooks have been a major market driver across Asia. In addition, the IDA's Intelligent Nation 2015 plan, and in particular its Broadband Network plan in addition to its Connected Homes and IT Literacy programmes, should support continued development. Overall hardware spending rose around 6% in 2005, and accounted for about 47% of the domestic IT market.
Software accounted for about 15% of the domestic IT market in 2005 and 24% of the export market. As the market focus moves from hardware to services and solutions, the share of software should rise to 19% by 2010, with enterprises looking to get more leverage from their investments. ERP and other e-business will find increasing popularity with the SME market, as enterprises look to enhance productivity through automating essential functions.
IT services accounted for about 38% of the domestic IT market in 2005, with spending of US$1.46bn, up from US$1.38bn in 2004. The talk of the moment is the BPO market, which is currently growing at a double digit rate, and is expected to continue to do so throughout the forecast period. Finance and accounting will remain the most important BPO categories, although others will also provide growth. The government is to tender a major outsourcing contract this year, following large deals in the private sector in recent years, from companies such as Singapore Airlines. IDA has said that it will devote US$12mn over the next two years to developing Singapore's BPO industry, and to use some of the funds to support the training of 1,000 IT professionals in BPO services by 2006. Singapore's outsourcing providers should target niche high-end services such as basic business continuity.
According to IDA figures, broadband penetration was very close to 50% (49.9% as of end-October 2005), up from 48.8% in July. Dial up penetration is now 37.6%, down from 38.3% over the same period. Broadband customers were recorded at 670,000 in 2005, up from 502,000 the previous year, with the vast majority being xDSL subscriptions.
The Singapore infocomm Technology Federation (SiTF) is Singapore's premier infocomm industry association and was formed as a result of the merger of the Singapore Federation of the Computing Industry (SFCI) and the Microcomputer Trade Association of Singapore (MTAS) in 1999. The SiTF brings together around 400 corporate members from MNCs and local companies. Collectively, its members account for over 80% of the industry revenues. The SiTF assists its members in business development, market intelligence, overseas trade missions, networking and alliances.
SiTF has eight chapters under its wing – Best Sourcing Chapter, Digital Media Chapter, eGovernment Chapter, eLearning Chapter, Singapore Enterprise Chapter, Security Chapter, Web Services Chapter and Wireless Chapter.
The Singapore Manufacturers' Federation (SMa), formerly known as the Singapore Manufacturers' Association, was first established in 1932. Its main aim is to champion manufacturing and the Singapore manufacturing sector.
With a membership of over 2,800 corporate members ranging from MNCs to SMEs, SMa carries out a myriad of activities to enhance the competitive edge of its members. Its mission is to be a world-recognised manufacturing federation making a difference to its members.