- Singapore’s Smart Nation Program is progressing steadily and the two key ministers to look out for are Yaacob Ibrahim and Vivian Balakrishnan for new developments in the news
- Latest stage would involve logistics and health care as new frontiers are being pushed for the private sector. For the public sector, there are plans are for sensors and AG Boxes for city management.
- M1 and ST Engineering are likely winners. M1 participated in the trials last year at Jurong District. ST Engineering has already produced a customized product and have past experience.
- Only time will tell if M1 and ST Engineering will go the way of Hyflux’s success story or flop like OpenNet
Singapore is making steady progress for its Smart Nation Program ever since Prime Minister Lee Hsien Loong announced it last November as noted in my previous article. The exciting development just two months back was how Singapore was testing driverless vehicles on Sentosa and developing the next generation of faster and more reliable data coverage called HetNet to facilitate the Smart Nation Program. Now I will not only fill you in about the hottest developments on the horizon, but also show you how you could potentially profit from it.
Singapore is embracing technology to enhance its competitiveness and to remain relevant in today’s rapidly changing world. This is the advantage of being small and nimble. The entire Singapore government is behind this initiative and chances of success are high even if we take into consideration speed bumps and obstacles along the way.
For example, when OpenNet was unable to install fibre optics in an efficient and satisfactory manner last year, it was fined by the IDA and a new player NetLink emerged. Now we do not have widespread issues of fibre optic installation in the news. Still this highlights the risks involved when seeking exposure to the technology sector especially when you are putting your money on unproven companies.
Introducing the Key Players
There are two key ministers to look out for with regards to the Smart Nation Program and they are Vivian Balakrishnan and Yaacob Ibrahim.
Balakrishnan is the minister in charge of the newly created Smart Nation Program Office under the Prime Minister’s Office. The office will coordinate programs from other agencies such as the Infocomm Development Authority (IDA), defense research agency A*Star, Land Transport Agency (LTA), Urban Development Authority (UDA), etc.
Ibrahim is the Minister for Communications and Information which is at the heart of the Smart Nation Program initiative as this is essentially a technology driven and data dependent project. Yaacob will also head the Cyber Security Agency to ensure that we are protected digitally against theft and hackers as we get increasingly dependent on technology in our lives.
In short, Ibrahim will the frontman for Singapore when announcing new initiatives for the Smart Nation Program while Balakrishnan will coordinate the many different agencies to ensure that initiatives do not conflict with each other and to find synergies between agencies.
Latest Development for the Smart Nation Program
Ibrahim announced the latest big development for the Smart Nation Program recently on June 2 at the opening address for the Infocomm Media Business Exchange (imbX) at Marina Bay Sands. He announced three new initiatives — Smart Logistics, Smart Healthcare and Smart Tech Challenge. Let me briefly describe each initiative:
For Smart Logistics, the government is providing a platform for small logistics players who cannot afford the tracking technology for their goods. This is especially important for Singapore in its ambition as the shipping and aviation hub of the world. There are many small logistics players involved when physical goods arrive in Singapore and the current situation is that only big players have the means to track them. These small players cover 99% of the market and the government is playing landlord in this case. It will spend the money to build the infrastructure and allow small players to access it at an affordable price.
For Smart Healthcare, this is a pilot program where sensors and other devices will be deployed to monitor the elderly in Singapore. This will reduce their visits to the doctors and be healthier. As for the Smart Tech Challenge, it will be about pushing the envelope to address real world problems and to commercialize it with government support.
Besides these initiatives for the private sector which are in their infancy stages, we have public sector initiatives such as the deployment of sensors and intelligent Aggregation Gateway (iAG) boxes for city management. This will be used by the government to monitor air quality levels, traffic conditions and water levels in order to make better and faster decisions.
Trial Participation – M1
So all these big ideas have been conceptualized by the government but they require skilled suppliers to implement them in reality. M1 is one such supplier. When M1 is not busy selling telco services to the masses, M1 was busy building up infrastructure for the government.
This relationship started in June 2014 during the Smart Nation program trials at Jurong Lake District for smaller tasks such as time and motion sensors for automatic lights activation and cameras to detect illegal parking. M1 participated in the tender in March 2015 and it has an advantage over other competitors such as Singtel and StarHub for new projects in Jurong, Orchard, Singapore River and Little India.
This will provide the next frontier of growth for M1 if it can participate in this ambitious government project which will stretch island-wide. This will assist them in their earnings especially with the impending entry of MyRepublic into the oversaturated broadband business. This smart nation project is their best hope but Singtel and StarHub also want a piece of the action. But if M1 succeeds, then there’s a chance they can scale out by selling their implementation expertise to the wider market in Asia and even the world.
Of course we are at the initial stages of the Smart Nation boost for M1 and much of M1’s value would depend on the implementation if they win the tender. Hence it’s something that’s on your radar at the moment.
ST Engineering – Ready With New Product
The other company to keep a lookout for would be ST Engineering. ST Engineering won a $513 million contract from the government in the third quarter of 2014 to build various projects. Of note is the $295 million ICT programs awarded to ST Electronics which is a part of ST Engineering.
“Singapore’s Smart Nation initiatives offer opportunities for the company to develop our capabilities and offer our solutions to improve the quality of life for our citizens.”
This is the quote from ST Electronics President Lee Fock Sun extracted from their press release. More recently, Channel NewsAsia announced this month that ST Electronics produced a new product built specifically for Smart Nation known as the Intelligent Aggregation Gateway (iAG). It is a key piece of infrastructure for the collection and analysis of data.
Given their long experience working with the government, ST Electronics is also likely to stand a greater chance to win the tender for provision of equipment to the government. This is also assuming that they have a competitive and reliable product in the iAG.
Singapore is pushing the frontier with Smart Nation Program and other countries will soon emulate our success in this area. I know that we are in the initial stages of the program but I am confident of future success which Singaporeans will take for granted. For those who invest, they will have the means to enjoy these facilities and more.
Think of Hyflux which started out at $0.24 in January 2001. 2003 was a key year for Hyflux when it won the PUB tender for the Seletar NEWater plant and Singapore’s first seawater reverse osmosis plant. This credentials allowed it to enter the China market in 2004 and the rest is history. Its price went on to $0.86 in 2003 and then went on to peak at $3.25 at July 2005. Hyflux is a Singapore success story and it owes its success to the first big break it got from PUB. It made its founder Olivia Lum one of the richest women in Singapore.
Likewise for similar reasons, both M1 and ST Engineering are on my watch list. The potential growth in M1 and ST Engineering are made under the assumption that they win their respective government tenders. At this point of writing, the results are not out yet but these two companies are the frontrunners for now. If both companies can execute their Smart Nation projects successfully over the next 6-12 months, they can keep pole position. If not, there are plenty of competitors to take their slice of the pie.
Will M1 and ST Engineering succeed in Hyflux’s footstep or will it flounder into notoriety like OpenNet? That is something that only time will tell and for the management to prove their worth. In the meantime, I’m keeping a watch.