OCTOBER 11, 1999 VOL. 154 NO. 14

T H E  C O M M U N I C A T I O N S  R E V O L U T I O N
Singapore Online
This small island nation is wiring itself up to a digital infrastructure built for high-speed electronic commerce
By RAVI VELLOOR Singapore

Michael Yap, Singapore's information technology czar, confesses to two addictions: coffee and bandwidth. "I go crazy when I am at home," says the 38-year-old, U.S.-trained engineer who heads the Southeast Asian island state's National Computer Board (NCB). "My home bandwidth is too small, so I open up two machines. I need to plug in to get my fix." Now Yap need only subscribe to the system he himself helped create to get his high. At download speeds of up to 10 times the normal rate for the average home modem, the 70,000 users of SingaporeONE--as in "One Network for Everyone"--can download data at the blink of an eye. Through the government-funded and controlled S-ONE project, Singapore aims to become one of the most wired societies in the world.

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Launched in 1996, the S-ONE project is designed to create an advanced nationwide information infrastructure linking computers in every home, office, factory and school by 2007. "We see IT as a comparative advantage over other economies," says Yap, who believes that by wiring the entire island Singapore can secure its place as an e-commerce hub in Asia.

Thousands of Singaporeans sign on to the Net every month, despite worries over personal privacy in this efficiently policed state. Earlier this year, the government apologized after the Internal Security Department admitted it had been checking Internet accounts without notifying the account holders or asking their permission. Nevertheless, recent estimates put the number of personal computers at roughly 1.2 million and the country's three Internet service providers have a subscriber list totaling nearly 700,000 out of a population of 3.8 million. Even the government is going digital. Two years ago it began allowing income tax returns to be filed over the Net; it tracks the movements of prisoners inside jails by means of electronic bar codes; and it sends out vans equipped with computers to farms and factories around the country to help familiarize older people with the new technology. "By 2001, we aim to offer most public services over the Net," says Yeow Cheow Tong, Minister for Communications and IT. In its 1999 Information Society Index, technology consultancy International Data Corporation ranked Singapore as the fourth most information-driven society in the world, behind the U.S., Sweden and Finland.

Pete Hitchen, IDC's senior Internet analyst in Singapore, thinks the country's strategy will help it become a magnet for Asian and other types of businesses. Singapore is already turning into a kind of bellwether for the introduction of new technology, he says. Philips, for example, has been testing its new set-top boxes in the consumer market. "Singapore's footprint is way bigger than its population size in the global IT village," says Lionel Lim, Asia South managing director for Sun Microsystems. "For a country this size it has steamed ahead at an incredible rate," agrees Hitchen.

But building critical mass in e-commerce has been a challenge, especially among small businessmen who are often intimidated by the technology and cowed by start-up costs. The government hopes to open up new markets for the country's roughly 92,000 small and medium-sized enterprises--which employ about 53% of the workforce--by getting them on the Internet. There's still a long way to go, however. Singaporeans spent just $35 million on Web purchases in 1998, a figure that is expected to rise to about $84 million by year's end and $2.4 billion by 2003. Still, Singapore is well behind other parts of Asia, like Hong Kong, which spent $61 million last year, and South Korea, which spent $56 million. Sites such as AsiaOne and the Electronic Commerce Hotbed Programme's Shopping Village (www.shoppingvillage.com.sg), an e-commerce site hosted by the NCB, have been trying to push the envelope, though with mixed results. Bigger firms have been quicker studies. Hewlett-Packard and Compaq, for example, both run electronic commerce centers from Singapore and IBM set up an Emerging Technologies Center in Singapore last year to conduct research on future broadband applications. In April Citibank launched Citibank Commerce, its first e-commerce business. Now renamed CitiCommerce.com, it provides business-to-business supply chain management services.

Singapore's schools are also putting the S-ONE network to good use. The government's education initiative aims to have 30% of the national curriculum delivered online within three years, with one computer for every two students in every school. Last month, for example, the top-ranked school Raffles Girls' Secondary opened its classrooms to students throughout country via the Internet. When Raffles broadcasts its lessons over the Web, students from other secondary schools can log on to join the live classroom discussion.

But to ensure success it's crucial that investments are made in the right technology. "Unless the money is invested in compelling applications, the hype may remain just that--hype," says the head of one Singapore software firm. NCB boss Yap agrees. "I want Singapore to be the Parisian catwalk for multimedia," he says. A worthy goal, but it may take some time before consumers start buying off the rack.