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Free surfing deal shakes up Singapore ISPs

December 13, 1999
Web posted at: 10:26 a.m. EST (1526 GMT)

by David Legard, Computerworld Hong Kong

(IDG) -- The first free Internet access package in Singapore, announced by ISP (Internet service provider) StarHub Internet, has made a rapid impact on customers and rival ISPs in the city-state. Almost 30,000 customers signed up for StarHub’s deal in the first two days, a significant number compared to the total subscriber base of 489,000, local media reported.

Rival ISP Pacific Internet Ltd. (PI) initially reacted by posting a Web page titled "Free Internet Access -- What’s The Catch?".

But Nasdaq-listed PI has now said it will lower its own prices for Internet access, shift its business focus from access to e-commerce and rely on its overseas business to offset competitive pressures in the Singapore market.

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In a statement issued last week, the company said its dependence on subscription revenue will drop as revenue from online advertisements and transactions "pour in" for its recently announced e-commerce portal.

PI also said its rapid expansion into Australia and India, together with planned moves into other new markets, is expected to reduce the company's dependence on revenue from the Singapore market, to date its largest single revenue source.

StarHub Internet is owned by the StarHub consortium, which will become Singapore’s second basic telecommunications services provider in April next year. StarHub's international members include British Telecommunications and Nippon Telegraph & Telephone (NTT).

StarHub Internet, previously known as Cyberway, was easily the smallest of Singapore's three ISPs at the time of its takeover by the consortium, with around a 10 percent share of subscribers.

The free-surfing deal puts pressure on the country's largest ISP, SingNet, a subsidiary of national carrier Singapore Telecommunications Ltd., which recently announced lower interim profits due to price pressure in its main business sectors. SingNet will announce a response to StarHub's offer soon, according to local media reports.

The offer also makes the market more competitive for the three ISPs which have been granted licenses but have yet to open for business -- local company DataOne Asia Pte. Ltd.; the joint venture between multimedia systems manufacturer Creative Technology and Cable & Wireless Asia; and MCI WorldCom's UUNet division, the country's first fully foreign-owned ISP.

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