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.

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