Monday, January 21, 2008

Singapore - ending regulation of resale of telephony

IDA Removes Price Regulations on the Resale of Public Switched Telecommunication Services

IDA will stop regulating the prices for resale of public switched telecommunication services ("PSTS") with effect from 1 March 2008. Licensees who currently provide resale of PSTS include hotels, service apartment providers, office rental companies, and companies providing payphone services for local and international calls within their premises. From 1 March 2008, these Licensees will have the flexibility to set their own prices for the resale of PSTS. Nevertheless, PSTS resellers must still comply with IDA’s requirement to disclose the prices, terms and conditions of any telecommunications service, prior to providing that service to end users. This will ensure that end users are able to make an informed choice before their purchase of any service.

The price regulation framework2 was first introduced in 19953 to address the concern that end users, especially those end users staying in hotels, had little alternatives to the PSTS provided by the PSTS resellers. The price regulation framework served to ensure that end users using the resold PSTS are able to enjoy competitive prices comparable with those provided outside the premises. This would in turn support Singapore's larger goal to be a business and tourism hub.

Arising from a recent request from the industry for this price regulation to be removed, IDA undertook a review of the policy to determine if it was still relevant in the current market environment. IDA recognised that the market environment has changed significantly since the last review of the policy in 2001. Mobile telephone subscription penetration is now very high, and there is a large variety of international telephone services available in the market at competitive prices, such that end users can now choose to use mobile phones, international calling cards or Voice over Internet Protocol services, if they find the PSTS provided by the resellers to be expensive. As such, IDA has determined that it is no longer necessary for IDA to continue to regulate the prices for the resale of PSTS. Instead, the appropriate price levels can now be left to market forces. In arriving at this decision, IDA had also consulted the relevant stakeholders.

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