SingTel Reveals Ambition to be the Asia-Pacific Leader in Offering Managed ICT Services

| Sep 24, 2008 | Telecom Services - Asia | Competitive Intelligence Report

| Analyst: Siow Meng Soh

Current Perspective: Positive
Vendor Importance: High
Market Impact: Moderate

Event Summary

September 22, 2008 – SingTel has announced its ambition to be the leading one-stop provider of managed Information and Communication Technology (ICT) solutions among telcos in Asia-Pacific in five years. The company will offer customers a range of ICT solutions by working with various software and hardware partners. SingTel will adopt flexible pricing models such as pay-per-use and utility-based cost models. The carrier’s proposition is to help customers reduce complexities, lower upfront investments and avoid technology obsolescence.

Analytical Summary

• Current Perspective: Positive on SingTel making a stronger push for delivering managed information and communications technology (ICT) solutions, because it is able move further up the value chain and offer a wider range of solutions to meet different business needs. SingTel will be offering software-as-a-service (SaaS) and adopting more flexible pricing models (e.g., pay-per-use and utility based models) to allow customers to adopt new business applications and services more cost-effectively. Apart from creating new revenue streams, this move enables SingTel to enhance customer stickiness by cross-selling IT services to existing customers.

• Vendor Importance: High to SingTel as the company has been offering a range of network-related managed services as well as system integration and IT services through NCS, its wholly-owned IT subsidiary. The carrier is leveraging existing capabilities and expertise to offer a wider range of integrated IT and network services to enterprise customers of various sizes. While the convergence of technologies has enabled new business applications and services, customers are looking for fewer partners to outsource their IT and networking functions. SingTel is further strengthening its position as a one-stop provider for enterprise customers.

• Market Impact: Moderate on the pan-Asian enterprise services market, because SingTel is still at the early stage of growing the number of partners and developing applications for enterprise customers in various industry sectors. SingTel needs a pool of ICT applications and ongoing marketing efforts to gain customer buy-in.

Recommended Competitor Actions

• Competitors can cast doubt on SingTel’s ability to ensure high reliability of IT applications and services and its ability to provide rapid response to customer complaints, particularly if customers are using best-effort last-mile access (e.g., DSL and WiFi) or when SingTel does not own the last-mile infrastructure. Competitors can consider partnering with IT services companies such as IBM and HP/EDS if a customer requires its network provider to host its business applications or to provide IT-related professional services.

• AT&T can point out that it is well-placed to offer managed applications with its extensive network infrastructure and data center resources. The acquisition of USinternetworking (USi) has further strengthened AT&T’s ability to provide a number of enterprise-driven applications. AT&T can gain the confidence of prospects by providing them a list of global enterprise customers that have entrusted the carrier to manage their business applications.

• BT should highlight that it has been pursuing its ICT strategy long before SingTel made its announcement. The carrier can point out that it has also developed a strong network in Asia-Pacific and has acquired companies such as Frontline Technologies and i2i Enterprise to strengthen its ability to deliver customized ICT solutions. The carrier can also highlight that it is able to manage enterprise applications from vendors such as Microsoft, IBM and Oracle.

Recommended End User / Customer Actions

• Enterprise customers, particularly SMEs in Singapore, should investigate the range of business applications that SingTel is offering using the SaaS model. Customers do not need to purchase expensive software and they can scale quickly as they expand their business operations. Moreover, SingTel is offering a 60-day free trial period from October 1 – November 30, 2008.

• Enterprise customers can expect SingTel to expand the range of applications and services it can support. Customers that have specific requirements can also engage SingTel/NCS to design an end-to-end solution that will fit the bill.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Vendor Actions

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