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- ' ,__..... ,1 CASE STUDY: SINGAPORE TO LIBERALISE POSTAL SECTOR FROM APRIL 1, 2007 Singapore will open up its postal sector to new players from April, ending SingPost's monopoly of the basic mail services market after some 15 years. The government says the price discrimination competition will sustain the monopoly power, will createjobs, generate costs savings and improve service quality. SingPost's 15- years exclusive license to offer Basic Mail Services will end on March 31. And the government will allow new players in both domestic and international mail services. As of 2004, Basic Mail Services contributed on fth or S$200 million, to the S$1 billion revenue in the postal sector. The government says the move to liberalize is etcpected to generate cost savings of S$8 million to S$25 million a year over the next two or three yea rs.Dr.Lee Boon Yang, Information Communications and the Arts Minister. said, ' We are well aware of the slow growth in the sector but nevertheless, we are optimistic that (wit h) further liberalization, we can introduce more competition which will eventually benet the consumer's\". "And our best estimate is that there is a small but still not insignicant cost savings to consumers for mail services between S$8 to S$25 million a year. I don'tagree that with competition, it could become wasteful in this sense, that it might lead to more cost burden for the consumers; the whole thrust of this further liberalization IS to help busmssa to reduce cost". The decision to fully liberalise Singapore's postal market follows a survey done in August last year, where eight industry respondents said the move could boost economic growth and e-commerce activities. Source : Wong Siew Ying and Jeana Wong (2007), Singapore To Liberalise Postal Sector from April 1, 2007, ChannelNewAsia.com, 5'" February 2007 Answer the following questions based on case study entitled "Singapore To Liberalise Postal Sector From April 1, 2007\" 1. Explain FIVE (5) sources that a business company can be a monopolists. (10 marks) 2. Elaborate why monopolist (Singapore Postal Service) choose of price discrimination to sustain the monopoly power on their business strategies. (15 marks) ,a Frlit Enrmat Takla