Published June 15, 2009

SingTel offers 'music buffet' to customers

Subscribers can download to heart's content from array of 500,000 songs

By WINSTON CHAI

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(SINGAPORE) Singapore Telecommunications is going all out to strike the right chord with customers.

Treat for music lovers: SingTel's repertoire includes songs from major Universal artistes including the Black Eyed Peas, Lady Gaga and the Pussycat Dolls

The operator launched a new buffet-style music store yesterday with the Universal Music Group in an effort to swing subscriber votes and boost its flagging voice revenues.

'In the past, it (the telco) used to be about carriage services - carrying voice and data from one point to another. SingTel decided two years ago that the telco of the future needs to be more than just bits and bytes,' said SingTel chief executive Allen Lew.

Unlike previous offerings from Nokia and Sony Ericsson which are tied to specific phones, SingTel's new Amped music service works across multiple handsets and is bundled free with three of its 3G subscription plans.

Beyond the usual talktime and mobile Internet bundles, these plans - which costs between $39 to $95 - offer subscribers the added benefit of being able to download to their hearts' content from the firm's new music portal.

Existing SingTel customers can opt for a separate $9.90 monthly mobile data add-on to receive the same perk. All other charges usually levied on over-the-air downloads are waived for this service.

The operator's music repertoire is currently made up of nearly half-a-million songs from major Universal artistes such as the Black Eyed Peas, Lady Gaga and the Pussycat Dolls, as well as Asian stars Jacky Cheung and Eason Chen.

Consumers can feast on this musical buffet on both their computers and mobile phones but the majority of the downloaded tracks will expire at the end of their two-year SingTel contracts.

However, customers will be allowed to keep 15 'DRM (digital rights management)-free' songs every month and these can be transferred to other phones or music players, according to SingTel's consumer chief Yuen Kuan Moon.

SingTel Amped currently works with 12 handset models from Nokia, Samsung, LG Electronics and Sony Ericsson but the compatibility list will be expanded to include the likes of HTC in the coming months, he added.

The operator may also get more labels to back the service in the near future, a move which market watchers feel is needed to guarantee its longer-term success.

'Consumers today look for variety and choice. SingTel will need to get other music distributors and labels on board,' said Foong King Yew, research director for carrier operations and strategies at technology analyst firm Gartner.

'SingTel's clearly trying to avoid the fate of a fat dumb pipe,' added IDC Asia-Pacific research manager Aloysius Choong.

SingTel Amped is the third legitimate music service to make its Singapore debut this year, coming after Nokia Comes With Music in February and Sony Ericsson's PlayNow Plus launch in April.

The Sony Ericsson service is also exclusive to SingTel and it is only offered alongside the purchase of the W705 Walkman handset. The Nokia offering, on the other hand, is extended to all three telcos and is bundled with seven phones.

A fourth local online music portal opened nearly a decade ago by Motorola unit Soundbuzz will be shut down next month, while Apple's popular iTunes Music Store continues to be off-limits to Singaporeans.

Published June 15, 2009

Gentler debt rap slows bankruptcy petitions

All eyes on scheme that offers unchanged prospects to creditors, is easier on debtors

By SIOW LI SEN

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(SINGAPORE) Ever since a new scheme to deal with debtors kicked in on May 18, banks are believed to be filing fewer bankruptcy petitions.

That is because they are assessing how the debt repayment scheme (DRS) works - and what it can do for them - instead of taking the extreme legal route.

Before this, anyone who owed a debt of more than $10,000 faced the shadow of bankruptcy and the stigma that it carries. Now, another door has opened as anyone with a debt of up to $100,000 can be dealt with under DRS - in which he can be given a repayment plan of 3-5 years, without the bankrupt label.

This has immediately made banks step back and take stock. It has also resulted in a drop in bankruptcy petitions.

'From 18 May to 7 June 2009, the High Court received 90 bankruptcy applications, of which 43 (48 per cent) involved debts less than $100,000,' said an Insolvency & Public Trustee's Office (IPTO) spokeswoman.

This is a significant drop from the period before DRS kicked in. Between January and April this year, bankruptcy petitions have ranged between 243 to 296 a month.

Observers say that since DRS applies to debts of up to $100,000, it may effectively have raised the ceiling for bankruptcy applications from $10,000 to 10 times that amount.

For those who owe up to $100,000, the High Court may adjourn a bankruptcy petition for up to six months and refer the case to the Official Assignee (OA) for the OA to assess the debtor's eligibility for DRS, the spokeswoman said.

As at June 7, some 14 cases have been referred to the OA for assessment.

'(Since May 18), I have noticed a distinct and noticeable drop for (bankruptcy) cases between $10,000 and $100,000,' said Tan Keh Whoo, director, Advent Law Corp.

Said Nanan Waluja, Citibank Singapore credit operations director: 'It is too early to assess or form conclusions on the impact of the debt repayment scheme, as it has been just three weeks since its implementation on 18 May.

'However, in principle, we fully support this move by the Ministry of Law, and will make any assessment on a case-by-case basis.'

All banks contacted by BT said that taking legal action was a last resort and that they support the DRS scheme. Others felt that banks would wait to see how DRS turned out.

'I think there may be some misunderstanding or misconception on the part of both creditors and debtors on the DRS,' said Leong Sze Hian, president of the Society of Financial Service Professionals.

'Creditors may be holding back because they want to wait and see what exactly happens to the first cases that come up.'

Under DRS, the debtor is given a repayment plan of between three and five years. The repayment plan is administered by the Official Assignee, similar to the existing bankruptcy regime.

The key difference is that under DRS, a debtor avoids the bankrupt label which has dire consequences. Many employers, for example, have a policy of sacking employees who have been made bankrupt. Bankrupts also need to seek permission before going abroad. A debtor who is dealt with under DRS does not suffer such inconvenience.

For creditors, on the other hand, there are not many changes under DRS - except for holding out the threat of bankrupting the debtor.

'Under the DRS, creditors would receive no less than what they would have otherwise received had the debtor been made a bankrupt,' said the IPTO spokeswoman.

Debts proved and included under DRS are paid in the same priority as debts under the Bankruptcy Act, she said.

For example, income tax and CPF monies are repaid first. Commercial entities rank lower in payment priority.

This means that some banks may be reconciled to getting back as little as 5-30 per cent of what they are owed.

Still, one lawyer said that one reason for banks suing recalcitrant debtors was that many paid up at the onset of legal action, simply to avoid being bankrupted.

That is why there are more bankruptcy petitions than bankruptcy orders. In 2008, the number of bankruptcy orders was 2,327, about 21 per cent lower than the petitions.

Some observers wonder if DRS, with its higher ceiling, will increase irresponsible financial behaviour.

At a radio talkshow on the issue last month, Mr Leong said that some of the feedback was that 'debtors may spend with less worry of being made bankrupt'.

He pointed out though that debtors can still be made bankrupt if they fail to pay their dues within the 3-5-year repayment period that DRS offers. So, creditors had little to lose.

'For debtors, for many, it may just be a delay in being made bankrupt eventually,' he said.

The government had said earlier that about 42 per cent of bankrupts had debts of less than $100,000 when they were made bankrupt. The average number of bankrupts per year has been about 3,200 over the past five years. Based on these numbers, the government expects up to 1,300 debtors to be considered for DRS every year.

Published June 13, 2009

Low Keng Huat posts Q1 net of $11.2m

First-quarter earnings more than double as revenue more than trebles to $84m

By JAMIE LEE

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LOW Keng Huat's financial first quarter net earnings more than doubled, thanks to its construction segment and higher development profit contributions from related companies.

Net profit for the three months to April 30 jumped 129 per cent to $11.2 million from $4.88 million a year ago.

This translates to earnings per share of 1.51 cents, against 0.66 cents for the year-ago Q1.

Revenue for the construction, property development and hotel group more than trebled to $84 million from $26.8 million a year ago.

This was mainly due to its construction business, which registered a more than six-fold jump in revenue to $71.6 million from $11.3 million a year ago.

'The increase was due to the higher percentage of completion for ongoing projects one-north Residences and South Bank and the commencement of new projects Hard Rock Hotel at Sentosa, Meritus Mandarin Hotel and Serangoon Central Mall,' the group said in its financial statement. But revenue from its hotel and F&B businesses dropped 20.1 per cent to $12.3 million from $15.4 million a year ago.

'The decrease in hotel revenue of $3.1 million was attributable to lower revenue from Duxton Hotel Perth, Duxton Hotel Saigon and Starworth group of companies,' the company said.

'The group's two hotels in Perth and Ho Chi Minh City are expected to perform satisfactorily despite uncertainties in the global economic environment,' it added.

As for its development segment, contributions from associated and joint-venture companies jumped 91 per cent to $8.2 million from $4.3 million.

The company also registered a $21,000 loss in concessionary income - which is derived from the gaming centre operations in Duxton Hotel Saigon that opened for business in November 2006 - compared with a $487,000 gain a year ago.

'Our licence for operating the gaming centre was suspended by the Vietnamese government in November 2008,' the company said.

'We have submitted our appeal to the authorities to reinstate the licence but its outcome remains unknown as of April 30, 2009. The hotel remains open and is running as per normal business operations.'

The group's total order book stands at about $900 million. As at end-April, it has $26.2 million in its cash hoard, 50.6 per cent higher than the $17.4 million it had a year ago.

No dividend was declared. Shares of Low Keng Huat ended down half a cent yesterday to 26.5 cents.