RealTime IT News

SingTel To Exploit Net, PacNet Under Pressure

National telephone company Singapore Telecommunications Ltd. expects revenue contributions through its Internet arm to soar over the next three to four years.

The company, which made the comments Wednesday, said profits from retail sales via its Internet arm could, by then, comprise a significant chunk of its retail income, now standing at S$150 million a year.

The news comes on the back of a loss registered ISP competitor Pacific Internet Ltd., which also warned about stiff competition depressing its sales on a per user basis in the near future.

SingTel said that it expects on-line internet retail sales to reach 20 percent of the company's retail sales in three to four years, up from the zero contribution now.

The company said that it is now planning to consolidate all its retail revenue generation channels under one Web site, exploiting its own infrastructure which sells handphones to pagers to office equipment.

The plan is to use the Internet arm, SingNet, to be the key channel to book sales while its delivery arm, Singapore Post, will be used to ensure the physical delivery.

The company has said recently it plans to tap e-commerce and the internet to generate new revenue streams. The company will lose its basic, fixed-line monopoly from April 1, 2000.

Meanwhile, PacNet said it has registered a net loss of US$564,000 for the second quarter, reversing a previous net profit of US$2.7 million for the same period a year earlier.

In releasing the results, the Singapore-incorporated company said that its expansion into the region in India and Australia, among other countries, dragged down its performance.

The company said that competition continues to be stiff and it expects revenue per user in Singapore to fall. It said that the average monthly sales from users in Singapore fell to between US$14 and US$15 in the latest quarter, from between US$15 to US$18 in the first three months of the year.

PacNet representatives said that the entry of new ISPs into the market and new bundling deals with PC makers to exert further downward pressure. The ISP will start offering high-speed internet access through monopoly provider Singapore CableVision later this year to generate new revenue streams.

Looking ahead, the company said it is still pursuing its regional expansion strategy. On the cards are plans to link up with content providers and ISPs in Korea, Japan, China, Taiwan and Thailand.